Comments on: China Stories Roundup http://www.andrewlih.com/blog/2007/04/10/china-stories-roundup/ New Media researcher Mon, 01 Dec 2008 15:58:24 +0000 http://wordpress.org/?v=2.0.2 by: andrew http://www.andrewlih.com/blog/2007/04/10/china-stories-roundup/#comment-32274 Wed, 11 Apr 2007 05:23:06 +0000 http://www.andrewlih.com/blog/2007/04/10/china-stories-roundup/#comment-32274 If one looks at the price curve, it likely wouldn't make that much of a difference. Even if the RMB were valued down to what economists say is a fair price (say 5 RMB/dollar) it would not fundamentally change the imbalance. If someone went from $120/month salary to $200/month, how much would that effect disposable income on media consumption to the levels that would put money in the pocket of US movie and record companies? Not much. In general, PRC folks watch Chinese movies and listen to Chinese songs. It is only because the pirated DVDs of Western movies are less than 10 RMB that they are willing to buy. If it went from 10 RMB to 10 dollars a disc, you'll see purchase rates plummet, except for the occasional hit like Casino Royale or Harry Potter. Even right now, at the low prices, outside the third ring road in Beijing the DVD sellers are chock full of Chinese DVDs, and not that many Western DVDs. Likely, a bigger deal is the large number of expats, tourists and foreign students buying them at the sub-10 RMB rate, when they are in fact potential buyers of the real thing at the real price. If one looks at the price curve, it likely wouldn’t make that much of a difference.

Even if the RMB were valued down to what economists say is a fair price (say 5 RMB/dollar) it would not fundamentally change the imbalance. If someone went from $120/month salary to $200/month, how much would that effect disposable income on media consumption to the levels that would put money in the pocket of US movie and record companies? Not much.

In general, PRC folks watch Chinese movies and listen to Chinese songs. It is only because the pirated DVDs of Western movies are less than 10 RMB that they are willing to buy. If it went from 10 RMB to 10 dollars a disc, you’ll see purchase rates plummet, except for the occasional hit like Casino Royale or Harry Potter. Even right now, at the low prices, outside the third ring road in Beijing the DVD sellers are chock full of Chinese DVDs, and not that many Western DVDs.

Likely, a bigger deal is the large number of expats, tourists and foreign students buying them at the sub-10 RMB rate, when they are in fact potential buyers of the real thing at the real price.

]]> by: Dave http://www.andrewlih.com/blog/2007/04/10/china-stories-roundup/#comment-32268 Wed, 11 Apr 2007 04:17:58 +0000 http://www.andrewlih.com/blog/2007/04/10/china-stories-roundup/#comment-32268 Maybe if the RMB was allowed to float, the average Chinese citizen could afford to buy foreign products legitimately. Maybe if the RMB was allowed to float, the average Chinese citizen could afford to buy foreign products legitimately.

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