Couple months ago, I read a piece of news on newspaper which shows that Beijing ranks 14th while Shanghai 20th in the world’s living cost ranking. To be honest, I was really shocked at this ranking cause I could not understand how it could turn out. In the list, there’s a familiar city caught my eye, which is Seoul, where I still was a few days ago, ranking 2nd. I could admit that the price there is high, but it’s still not higher than many western cities and some Japanese cities like Tokyo as well. And if Shanghai really ranks 20th, I have no idea that how many natives could survive in this city.

It doesn’t mean that Chinese people are all poor. On the contrary, I do think that we Chinese lead a good life these days. In my opinion, the standard judging whether people are rich or poor should stand on the life quality they own. In this term, I found Shanghai nothing different from Seoul since people in Shanghai could have the same quality of life compared to those in Seoul. To some extent, Chinese people nowadays are not poor at all.

But one problem is that when we are abroad, we will feel that we are “poor” cause the price level in foreign cities is usually higher than we could afford. We come to realize that when our money is exchanged to that foreign local money, the same value could not afford the same amount of stuffs as they are in China. In other words, our money becomes less after exchanged. According to the “Principle of Economics” written by Markiw, the exchange rate should satisfy that money remains its same value no matter how many times it is exchanged. The idea may be a little ideal, but it points out the key. I have to say that the exchange rate of RMB is too low which makes us “poor” when we are abroad. One strange issue is that some famous foreign products’ prices are almost the same at their countries as well as in China, which may conflict the idea I mentioned above. But I think this might because the price in China does depend on the exchange rate and the original price in its home countries. So if we change the exchange rate, the price in China will relatively change higher or lower to adapt, therefore the price is always the same around the world. I know that low exchange rate might stimulate the foreign investment so that it could benefit our economics a lot. But if this situation still doesn’t change, we Chinese people will always be “poor” if we go to foreign countries.