People from the Chinese mainland travel overseas looking for bargains – which have been made in China. Why do these goods cost more?
Export rebates on Chinese products help people in the developed world to maintain their high consumption level by lowering the price of Chinese products sold abroad. As well, logistics in developed countries are relatively well established, making it more convenient for international brands to be sold at low intermediate costs.
When the products are re-exported to China, Customs duty, VAT and consumption tax are imposed. Logistical costs of Chinese domestic products account for 20-40% of their prices. In the US it is under 10%, and was only 8.7% in 2002.
AsiaOne News reports that according to statistics, logistical costs account for about 21.3% of China’s GDP compared to 10% in the developed world.