Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system.
It's also not just because they're underdeveloped. Some cities in developing countries, like Luanda, Angola, have some of the highest costs of living in the world.
Land actually isn't that much cheaper, but the others are true. It also isn't a Western System issue; Japan is actually one of the most expensive countries in the world.
A lot does come down to being underdeveloped. Or more specifically, living standards are lower, especially with the lower class (e.g. the poor in the US live far better than the poor in China). Take away all of developed nation's anti-poverty programs and minimum wage laws (that provide for floors on labor costs), combined with cost-inducing regulation that exists to protect human health and the environment, and yes, you would make products in the economy a lot cheaper.
Note that Luanda is only outrageously expensive for ex-pats, if you want to live how you are accustomed to in the West.
If you accept the lack of access to Western goods, then it is much more reasonable.
Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system.
Have you ever been to one of these places?
People are much poorer, and the standard of living is much lower. Things like utilities often don't exist, or or much less reliable than in richer countries.
Some things are cheaper: branded clothes and foods are generally priced beyond the means of most, so people don't buy them. Transport is cheaper, because people don't own cars - they walk, or bus, or share motor-scooters.
Accommodation is cheaper on a per-person basis, because 6 people in a single bedroom apartment is normal.
A few exceptions exist of course - the US health system costs a lot more than anywhere else in the world given the health outcomes. Places like Chile and Cuba pay a lot less for health care, but sit above and below the US on tables of life expectancy[1]. There are also things like extreme inequality in some countries which can cause other distortions.
But there generally really are no secrets - they live cheaper because they are poorer.
I am no economist (I am pretty sure this a well studied and documented field), but as some one who has lived in both developed and developing countries, I imagine it is because people from third-world country accept much a lower standard of living than a person in the first-world country. This is pretty much reflected in every aspect of life to the littlest detail. Everything from quality and size of accomodation, to the vehicle you drive, the quality of food, roads, toilets, water, etc. A shop or an office or home, might be more shabby in a poor country than in a rich country. Even if functionally they may be the same, a higher level of expectation is there in a rich country.
All this costs money, and it all adds up. Once the average Chinese citizen demands to have the same standard of living as his/her counterpart in the west, the price advantage will disappear.
> Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper?
Don't forget about currency manipulation. People in China are buying those things in yuan and then to do the comparison you're converting it to dollars at the manipulated exchange rate.
I find very hard to believe that it is just cost of living. I am more willing to believe that, instead of that, what happens is that people in China just expect to have less resources to live.
This opinion is based on my observation of how wages work in Argentina, in comparison with the US. Food (eating the same food) is cheaper in the US, rent (renting the same kind of appartment) is cheaper in the US, going to the cinema (same movie!) is cheaper in the US, buying a car (the same car) is cheaper in the US, buying clothes (the same clothes) is cheaper in the US.
Even thou, when I worked in a Boston based company they claimed that our salary should be lower because we had a lower cost of living. It is just that they can get away with paying us less. The chinese (or argentinian) cost of living being lower is a lie. It is just that we cannot do the things that USians expect and our salaries are reduced accordingly.
