Price / Cost Calculations Chinese style

Most of us are accustomed to making airline reservations and finding out that the great price we found does not include all of those taxes ! The stripped down price is used to grab your attention and then nail you with the "total cost."

Pricing in China is calculated in much the same manner. The base price is nearly always a stripped down price which si then "rebuilt" with various extras to form the final price. The final price is not always a bargain.

I have a bank account at a HK bank operating in China. They gave be two accounts within the master account. When I make a deposit into one account (with no minimum balance) and then try to transfer funds into the other account I am charged a transfer fee of 1% for the privilege. I was told that this covers their internal costs.

This makes no sense to me what so ever as the transfer was within the same bank and within the same master account. Complaining is of no use !

Purchasing a flat in Shanghai was much the same. Every single transaction has a stamp tax no matter how small including copying. When you add all the costs up it is a shocking revelation that what you thought was a reasonable transaction cost is a hit to your savings account !

viewed another way it is certainly easier for firms to track their costs if every single cost is broken out as a single transaction cost and charged to the customer. It also allows markups to be done at each stage and be easily tracked.

No wonder China is becoming the capital center of the world !

Missing But Not Lost

Apologies to readers for my absence for teh past few weeks. The gap in this commentary is in no way an expression of a lack of commitment or a lack of topics to discuss but rather a reflection of constant work and little rest !

Here starts another sequence of topics !