Why Prices in China are higher than in U.S.

Due to a large portion of tax?

The Chinese public is discontent with inflation in China. It is even more surprising to the Chinese that many consumer goods are cheaper in the US. Scholars say that the Chinese Communist Party's (CCP) monetary policy, tax policy and high domestic inflation are the reasons for the higher prices.
 
A blog reveals that in China, to have a meal at KFC costs RMB 30, over RMB 100 for a meal in a restaurant, RMB 400 for a pair of Levi's jeans, and over RMB 30,000 for the cheapest car, a Xiali.
 
Meanwhile in the US, it costs 6 dollars for a KFC meal, 40 dollars for a meal in a restaurant, 20 dollars for a pair of Levi's jeans, and less than USD 35,000 for a BMW.
 
US based China-economist Jian Tianlun said the differences are caused by China's monetary and fiscal policies and that due to land sales, investments and a large monetary supply, the RMB depriciates, and China issues large volumes of currency. Each of these cause price increases.
 
Jian says that with lots of investments and the rapid growth of bank loans, the monetary supply dramatically increases. Combined with recent regional land finances, land sales account for a third of China's GDP. Regional government debts increased drastically and had reached RMB 10.7 trillion by the end of 2010. Also, the current policy of stimulating domestic demand by exports and of keeping the RMB exchange rate low, exports caused a large increase in foreign exchange reserves, which in turn increased China's monetary supply. Jian says China's money supply ranks the first globally.
 
Economic critic Caoan Jushi believes China’s continuing to print more and more bills makes inflation more serious, therefore China's economic development is not sustainable. He contends China's economic development appears to be good, but it is an illusion. The government robs the people's money. There is high domestic inflation. As more bills are printed, with diminishing goods, it forms a vicious circle. As a result, prices are higher in China than in the US.
 
Chinese financial critic Shi Hanbing traveled to the US to compare price differences. His conclusion was that except for services and intellectual property-related products, goods in the U.S. are 50% cheaper than in China, however US per capita income is 34 times the per capita income in China.
 
Shi blogged that China has a lower GDP than the US, however more money is needed in China to buy the same products than in the US. Jian attributes this to the high-tax fiscal policy in China.
 
Jian noted that China had a high GDP growth rate in the last 20 years, but a higher fiscal budget growth rate of at least 20%. As a result, the tax rate became high. The goods made in China may not be expensive, but the taxes imposed increase their prices drastically.
 
For domestic consumption, 50~70% of the price is related to taxes. This explains why Chinese-made products have higher prices in China than in the US.
 
Data from the IMF Government Finance Statistic show that, based on 2006 data, China prices are subject to a large portion of tax. The tax rate is 4.2 times the US figure, 3.7 times the Japanese figure and 2.3 times the 15 EU countries.
 
Source from: NTDTV.com