China’s weak renminbi drives exports and draws criticism

A night at the Waldorf Astoria hotel in the heart of Manhattan starts at about $2,000 (about 64,000 baht).

- KEITH BRADSHER

A night at the Waldorf Astoria in the heart of Beijing costs about $340.Hotel rooms are not all that is cheap right now in China. A Big Mac from McDonald's costs half as much in China as it does in the United States. Made-in-China goods are cheaper, too: A OnePlus 15 smartphone is $999 in the United States and $692 in China. A BYD Seal plugin hybrid car sells for $15,500 inside China, including computer-assisted driving, and about $50,000 elsewhere.

Large discrepancies between prices inside and outside China point to the biggest distortion in the global economy today: the low value of China's currency. A combination of low interest rates, slowing economic growth and government policies have kept the country’s currency so weak — undervalued by as much as a third, even some Chinese economists estimate — that prices in China look cheap by international standards.

The weakness of China's currency, the yuan or renminbi, is not the only reason prices are low in China. A persistent decline in housing has erased much of the savings of Chinese households, leaving them reluctant to spend. Chronic overcapacity at Chinese factories after years of debt-fuelled investment has left companies frantically cutting prices for the fewer customers they have left inside the country.