Dezan Shira Analysis Indicates India Becoming Better Economic Value with Potential Growing as China Matures; Introspective Review of UBS Data Shows Shanghai Close to New
Beijing, China, September 18, 2009 --(PR.com)-- Working and living in China is nearly twice as costly as India, according to analysis conducted by Dezan Shira & Associates, Inc., in its "China - India Purchasing, Power, Prices & Salaries 2009" report.
Dezan Shira professionals generated the report (download at http://www.2point6billion.com/2009/08/27/china-india-purchasing-power-prices-and-salaries-1992.html) by extrapolating data from the broader three-year, 73 city, multi-continent report recently produced by UBS.
In culling through the master report, Dezan Shira found that:
> China is now twice as expensive as India;
> China has matured beyond being the most financially attractive destination for production of labor intensive manufacturing, and that market now belongs to India;
> Indian clothing, food and services are now a “good” value;
> The apparently high costs of doing business in Shanghai puts it on a level with New York City; and
> China’s demographics are increasing local costs.
The Dezan Shira analysis compares employment and salary levels, wage comparisons, domestic expenditures, apartment rentals and entertainment and travel.
“The statistics presented in UBS’ 2009 Prices and Earnings, A Comparison of Purchasing Power Around the Globe, demonstrates the surprisingly large gap between China and India in terms of business expense. Salaries in China are consistently double those of India, while property prices also have crept ahead, albeit by not such a large degree.”
The Dezan Shira extrapolation also shows a “surprising” disparity between China and India in terms of basic commodities such as textiles and food. China, despite having the benefits of huge domestic agricultural and textiles industries, and a relatively low salary cap, has prices comparable to Europe. India is a now far better value in the provision of these commodities.
“Much of this has to do with the simple demographics of aging. As China’s
economic and development has lasted for 25 years, its one child policy, introduced at the same time as its reforms, has had the intended impact and China’s population is now aging. This increases the costs required for social welfare, and this added factor is now finding its place in the costs associated with the supply chain. India meanwhile has a young population, prepared to work for less and without yet the extra additional burdens to the state of national health care,” according to Dezan Shira.
Following are several selected results and commentaries from the report:
Salary Levels
New York 100.0
Shanghai 16.2
Beijing 13.8
Delhi 8.2
Mumbai 6.1
Salary levels were determined as a composite of 14 different professions, after deductions of taxes and social security. Taking New York as a benchmark of 100, the weighted ratios indicate that professionals in China earn an average of just 15% of their New York based counterparts, while in India the ratio is just above 7%. This indicates that Indian professionals earn 50% less than their Chinese counterparts and some 93% less than the average New York-based professional.
Purchasing and Expenditures: Domestic purchasing power
New York 100.0
Shanghai 24.7
Beijing 23.8
Delhi 23.2
Mumbai 21.8
To calculate this figure, UBS compared price and wage levels rankings. A basket of goods and services was identified, and the average annual salary divided into this figure. This allows comparison of the purchasing power of local wages. The aim is to identify how many goods and services a local worker can buy with their net wages. Consequently, cities with high tax rates score poorly. Setting New York at a weight of 100, Chinese and Indian consumers have a purchasing power of slightly less than one-quarter of New Yorkers.
Car Prices
Shanghai 32,200
Beijing 31,500
NewYork 21,000
Delhi 18,800
Mumbai 7,400
Due to different models being sold in different markets, the survey compared different, yet similar models of vehicles. These were identified as follows in terms of vehicle: Shanghai VW Passat 2.0; Beijing Honda Accord Sedan; New York Toyota Corolla; Delhi Toyota Corolla 1.8 JH; and Mumbai Hyundai Santro. All cars were five door, standard equipment models.
Dezan Shira & Associates http://www.dezshira.com/ is a multi-office provider of legal, accounting, compliance and other business services based in China. Founded in 1992, the firm provides a range of services for companies considering or already having made a in foreign direct investment (FDI) in China. These offerings include Chinese accounting, tax, payroll and due diligence services. These services are also provided in Dezan Shira has 16 offices strategically located in China, Hong Kong, Vietnam and India.
Dezan Shira also publishes a variety of magazines, books, newsletters and other publications through its Asia Briefing Media Ltd. including China Briefing, India Briefing, Vietnam Briefing and 2point6billion - the latter title derived from the combined population of China and India, and showcasing business developments in Emerging Asia.
Dezan Shira & Associates is a member of The Leading Edge Alliance based in Chicago.
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Dezan Shira professionals generated the report (download at http://www.2point6billion.com/2009/08/27/china-india-purchasing-power-prices-and-salaries-1992.html) by extrapolating data from the broader three-year, 73 city, multi-continent report recently produced by UBS.
In culling through the master report, Dezan Shira found that:
> China is now twice as expensive as India;
> China has matured beyond being the most financially attractive destination for production of labor intensive manufacturing, and that market now belongs to India;
> Indian clothing, food and services are now a “good” value;
> The apparently high costs of doing business in Shanghai puts it on a level with New York City; and
> China’s demographics are increasing local costs.
The Dezan Shira analysis compares employment and salary levels, wage comparisons, domestic expenditures, apartment rentals and entertainment and travel.
“The statistics presented in UBS’ 2009 Prices and Earnings, A Comparison of Purchasing Power Around the Globe, demonstrates the surprisingly large gap between China and India in terms of business expense. Salaries in China are consistently double those of India, while property prices also have crept ahead, albeit by not such a large degree.”
The Dezan Shira extrapolation also shows a “surprising” disparity between China and India in terms of basic commodities such as textiles and food. China, despite having the benefits of huge domestic agricultural and textiles industries, and a relatively low salary cap, has prices comparable to Europe. India is a now far better value in the provision of these commodities.
“Much of this has to do with the simple demographics of aging. As China’s
economic and development has lasted for 25 years, its one child policy, introduced at the same time as its reforms, has had the intended impact and China’s population is now aging. This increases the costs required for social welfare, and this added factor is now finding its place in the costs associated with the supply chain. India meanwhile has a young population, prepared to work for less and without yet the extra additional burdens to the state of national health care,” according to Dezan Shira.
Following are several selected results and commentaries from the report:
Salary Levels
New York 100.0
Shanghai 16.2
Beijing 13.8
Delhi 8.2
Mumbai 6.1
Salary levels were determined as a composite of 14 different professions, after deductions of taxes and social security. Taking New York as a benchmark of 100, the weighted ratios indicate that professionals in China earn an average of just 15% of their New York based counterparts, while in India the ratio is just above 7%. This indicates that Indian professionals earn 50% less than their Chinese counterparts and some 93% less than the average New York-based professional.
Purchasing and Expenditures: Domestic purchasing power
New York 100.0
Shanghai 24.7
Beijing 23.8
Delhi 23.2
Mumbai 21.8
To calculate this figure, UBS compared price and wage levels rankings. A basket of goods and services was identified, and the average annual salary divided into this figure. This allows comparison of the purchasing power of local wages. The aim is to identify how many goods and services a local worker can buy with their net wages. Consequently, cities with high tax rates score poorly. Setting New York at a weight of 100, Chinese and Indian consumers have a purchasing power of slightly less than one-quarter of New Yorkers.
Car Prices
Shanghai 32,200
Beijing 31,500
NewYork 21,000
Delhi 18,800
Mumbai 7,400
Due to different models being sold in different markets, the survey compared different, yet similar models of vehicles. These were identified as follows in terms of vehicle: Shanghai VW Passat 2.0; Beijing Honda Accord Sedan; New York Toyota Corolla; Delhi Toyota Corolla 1.8 JH; and Mumbai Hyundai Santro. All cars were five door, standard equipment models.
Dezan Shira & Associates http://www.dezshira.com/ is a multi-office provider of legal, accounting, compliance and other business services based in China. Founded in 1992, the firm provides a range of services for companies considering or already having made a in foreign direct investment (FDI) in China. These offerings include Chinese accounting, tax, payroll and due diligence services. These services are also provided in Dezan Shira has 16 offices strategically located in China, Hong Kong, Vietnam and India.
Dezan Shira also publishes a variety of magazines, books, newsletters and other publications through its Asia Briefing Media Ltd. including China Briefing, India Briefing, Vietnam Briefing and 2point6billion - the latter title derived from the combined population of China and India, and showcasing business developments in Emerging Asia.
Dezan Shira & Associates is a member of The Leading Edge Alliance based in Chicago.
###
Contact
Minkus & Pearlman
Raymond Minkus
224-533-1030
www.dezshira.com
Raymond Minkus
224-533-1030
www.dezshira.com
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