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| The same in any language. Apple Store, Shanghai, China. |
Twenty years ago when I was studying high school geography I was introduced to the idea of the 'Big Mac Index'. I don't remember it ever being referred to in those terms but I clearly recall our teacher, Mrs Austin, telling us that the best way to compare how expensive countries were relative to each other was to look at the price of a Big Mac. It's one of the few human geography insights that has stayed with me (along with the fact that motorways cost £1million per mile to construct - or at least they did in 1993). Physical geography - glaciers, mountains and plate tectonics - was more my thing. I thought about the Big Mac Index a couple of weeks ago when Anita and I were visiting Istanbul for the weekend and again today as I wandered along Shanghai's main shopping street.
I'm in China this week for work, delivering training to lawyers in our Shanghai, Beijing and Hong Kong offices. I'm doing fifteen sessions across three cities in five days, so my schedule doesn't allow much time for sightseeing - half a day at each end of the week at most. So this afternoon, fuzzy with jetlag, I made it out of my hotel and into downtown Shanghai in search of something to eat. I last visitied Shanghai in 2003 - almost ten years ago to this day - on a drinking weekend from Hong Kong in the company of JC and The General. Within an hour of arriving we'd lost our guidebook, by the first afternoon I'd lost my glasses, and by the second morning we'd lost JC. I don't remember too much else about the trip other than walking along the main shopping drag and never being out of sight of a McDonalds. It was one of the clearest signs you could want of the creep of capitalist enterprise into communist China. Today, as you wander Shanghai's shopping streets you would be forgiven for thinking that you were in the west, if you could overlook the plethora of mandarin character neon street signs, the incredible mass of Chinese people, and the communist one-party political regime (this one's a big ask, admittedlty). Gap, Nike, Pizza Hut, Mango, Apple, Rolex, Burger King, McDonalds, Starbucks, Haagen Dazs, Costa Coffee - its all here. And everywhere you look people are buying clothes, carrying bulging shopping bags, trying on watches, eating ice cream, spending money.
Despite not having eaten for eight hours - and even that an insubstantial aeroplane breakfast - I was determined not to sumit to the lure of the golden arches, so I am afraid I can not report first hand on where China sits on the Big Mac Index. Instead, I ate with a load of locals in a small side-street noodle bar. I ate stir fried pork noodles, whilst the well dressed lady next to me opted for deep fried chicken feet. But a quick bit of google research reveals that according to The Economist's 2013 Big Mac Index China is seriously undervalued against the US dollar (and sterling) - in other words, it is a cheap place to live.
On the one hand, I can see for myself that this is so. I enjoyed a massive bowl of noodles and a coke for around £3 this afternoon, and I write this at a mahogany desk in a king-sized suite in Shanghai's Waldorf Astoria - complete with marble walk-in shower and automatic toilet seat - which is costing significantly less a night than our Istanbul hotel room. On the other hand, it is clear that the Big Mac Index tells only half the story. An iMac in the Shanghai Apple Store costs more than in Covent Garden, which I find strange considering that it was probably put together by an army of cheap Chinese labourers a few hundred kilometres down the road. Similarly Nike trainers, Gap clothes and Levis jeans also cost more here than in the UK. So a quick shopping trip reveals a truer picture - whilst Big Macs might be cheap, there is undoubtedly an appetite (and the spending power to support) a healthy market in luxury goods. Conspicuous consumption is alive and well - in this part of China at least.
One of my resolutions for 2013 is to learn more about global economics. I guess lesson one is that if you want to really know what's going on, stay out of McDonalds. Its probably better for your health too.
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