One of the many things that is a bit of a change of pace for people new to China is the concept of bargaining. In the West we are used to relatively simple and painless transactions, someone asks for a price, we pay, both parties leave satisfied. However, in much of the rest of the world that is simply not the case.

Shopping in China is a more, shall we say, “organic” experience. Where prices are constantly negotiated, and two people can very easily pay a very different price for the same thing, bought from the same place, on the same day. Some Westerners have mastered this art, many have not, many more claim to have mastered this art, but really have not.

In general laowais fall into one of three categories of bargainers…

Souvenir Shopping by Luke Hoagland
Souvenir Shopping by Luke Hoagland

The Innocent: Full of many people new to China, or who have rarely left their Expat Bubble. These are the kind of people who say something like “600RMB for Nike Shoes? Why that’s cheaper then I get it back home. I’ll take it!” to someone on the street. They tend to either take the first price offered, and may occasionally be happy with a 10-20 RMB discount.

The Hardliners: On the complete opposite end of the spectrum. These are the people who think that the very clear “Foreign Pricing System” (i.e. when foreigners charged 5-10 times as much as a local for the same thing) is exceptionally unfair. They are very hard bargainers, who frequently walk away and have merchants chase them down streets to go for their offer, after initially claiming things to be unfair. They tend to be the most frustrated and frustrating bargainers to deal with.

The Generous: Somewhere in between the two. These are the kind of people who bargain a bit, but justify their overspending with statements like “People here are so poor, they could use the extra money.”

I would imagine that most of you reading this site are somewhere in between the second two options, probably depending on your mood, and how badly you want the item in question. I myself, have never been been much of a hardliner, I am far too often an open book, either indicating or flat out saying how much I like something before asking the price, never a wise move for the pocket book. Far too often, I fall into the third category, which I was happy to exist in until I came to a sudden realization.

It’s ethically wrong.

A very common bit of China swag by aslakr
A very common bit of China swag by aslakr

I came to the conclusion that being generous and a touch careless in your spending here is not in the best interest of anyone, and probably hurts the country in the long term. From Mao watches to massages, we are inflating the financial value of tourist goods and services. Simple economics show us that a lucrative venture will have more investors, and as a result of more and more souvenir sellers start to pop up.

Sounds good so far, I mean, it’s giving people jobs, right?

That’s what I thought, until I considered my trip to Cambodia, where I had two consecutive tuk-tuk drivers who had quit their jobs as English teachers since they would make more money in the tourist industry. This was followed up on my most recent trip to Xinjiang Province, where I met a tour guide who had a degree in computer engineering. I imagine that there are many more cases all over Asia, and the rest of the developed world than these ones.A Common object of bargainning by dango.malone

Here we have some clearly intelligent and capable individuals, who could be performing meaningful jobs that benefit their community and help along its development, but instead they are telling me where to buy the best souvenirs because it is more profitable. Surely that can’t be right.

In overpaying, and in a big way, we are creating a market for cheap fixes to problems facing the developed word, as opposed to having them find long term solutions. One must look no further than our neighbours in Asia, South Korea and Thailand as interesting case studies.

Post 1953, South Korea decimated from Japanese occupation and a Civil War decided to focus on its industry and agriculture, and it now stands as one of the great success stories of Asian development. While Thailand on the other hand, focused on building its tourist infrastructure, and not its own industries. It is easy to see which nation is further along in its development. These are far from isolated examples, as one can easily look at Taiwan, Malaysia, Brunei, Indonesia, and Cambodia and probably place them more or less in one of those two camps.

Also, we need to think of the effects that the inflation is causing on the locals. If we decide to go to a tourist cafe and pay 50RMB for fried rice, then what is to the stop the nearby local restaurant from upping their prices as well? This could have a pretty adverse effect on the locals, who may have a harder time affording dinner as a result of our actions (and therefore have to turn to the quick tourist buck, which in turn continues the cycle even more…).

Of course, I am not saying that a nation as large, diverse, and rapidly-developing as China is going to ignore its own needs in favour of a quick tourist buck. However, there are certainly regions of this country that are more dependent on tourism for cash than their own economies, especially when you veer away from the highly developed coast.

While tourism certainly has its place in the economy, it simply can not be the focus. There is simply no sustainability, both economically and environmentally, to relentless growth in this sector. Also, if for whatever reason the tourists decide to stop coming, the economic effects can be catastrophic. One needs to look no further than the economic loss being suffered by Mexico as a result of Swine Flu, or by Thailand during their recent protests to see examples of this.

It is be a shame to see anywhere have economic problems compound an already difficult situation. However, if we want to help prevent that extra problem, which can domino into many other things, because let’s face it, people do crazy things when they do not have enough money, then we need to be more responsible with our own money.

While overpaying for one little Mao watch is not exactly going to change the make-up the entire economy, the trend certainly could, and having that sort of an unforseen side effect on the local economy could just be what ends up happening. Even if it was not what you bargainned for.

Discussion

25
  1. Like all laowai, I feel like a sucker if I don’t bargain and like a tightwad if I do, so I leave any transaction feeling bad.

    I’m not sure how much I agree with the central thesis here. Even in London, Sydney or Rome the tourist areas are more expensive. The tourist dollars do flow into the wider economy. Clearly it’s hard to imbue the job of tacky knick-knack hawker with the same dignity as a schoolteacher or nurse. But I’m not sure I buy that the effects of a booming tourism industry are necessarily so corrosive. (Of course you couldn’t say the same about the sex industry and the two are often intertwined.)

  2. Profile photo of Glen

    But England, Australia, and Italy were all at much farther places in their development when tourism started to become a truly viable cornerstone of the economy. This is in contrast to a country like Thailand or Cambodia, which are using tourism as main industries without much else. Tourism can be a part of the economy, but it can not be the most lucrative venture.

  3. I’m a hardliner with the exception that I dont get frustrated. If you really want to see the pros at work wait until you get a Chinese mother-in-law…

  4. Profile photo of

    Fantastic post Glen, and very good point. I do completely agree that countries that depend on tourism (or any industry) as a sole benefactor are surely setting themselves up for tough times.

    I guess where I diverge from this is that I don’t feel it is the consumer’s responsibility to feel any sort of ethical obligation to the salesforce or their country. Obviously paying less for things makes good sense regardless, but forcing yourself to bargain harder because you have an ethical obligation to the poor people of this nation… I dunno. Sounds a bit… self-righteous. Sort of a “I know we’ve been bargaining for 3 hours for that tea flask, but I’m doing this for your own good!”

    I guess I just feel it is the responsibility of the nations that have this problem to solve it themselves. I feel rather strongly that “developed” nations tend to look at “developing” nations as children and if China’s shown me anything, when you treat a population like children, that’s exactly how they act. No matter what your intentions.

  5. Always pay a fair price, and a fair price is what both the buyer and seller agree are inline with the value of the product. Anything above is stupid, anything below is impossible (because the boss will not sell below cost, atleast if he/she is rational. Trying to tie in ethics on this sounds a bit preachy, it’s a friggin mao watch.

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  7. Profile photo of Glen

    While I understand that my central thesis may come across as preachy or self-righteous. But it really is just an extension of one of life’s most basic principals, action have consequences.

    As some of the wealthiest people in the world (make no mistake of it, a middle class Westerner is among the global financial elite) that our purchasing decisions can have some very long lasting consequences in a butterfly effect sort of a way, which we ignore far too often. As I said in my post, one Mao watch may not make a huge difference, but the actions of millions of tourists a year can have huge impacts. While our actions may only be a drop in the bucket in comparison, it is still making a difference to YOUR actions, and doing what you can to have the most sincere. So while my post may be self-righteous, it is certainly self-aware.

  8. I have noticed that more and more sellers aren’t in the business of cheating foreigners. They realized that by giving a good price will bring them more business through word of mouth. I always get their business cards and share it with my friends.

  9. for me it often comes down to convenience. if ive got nowhere to be i can be quite the pain in the ass. but in many cases i just don’t care enough and while my time may only be otherwise spent slurping down some malatang, the local crap market just isn’t a pleasant place to be.

    it’s ultimately the same reason i pay 2 bucks for ATM fees when stateside rather than drive the 15 minutes to my own bank, though with my (former) car in place of the crap market.

  10. I recently went to Guilin and Yangshuo with a Chinese friend. When I was getting off the bus in Guilin, the waiting taxi drivers said, ‘It’s a Hello!’. They were quite excited at the prospect of getting a higher fare. My Chinese friend put an end to that hope and bargained hard for a reasonable fare. As well, when we were in Yangshuo, a fruit seller took her for a foreigner and doubled the price. My friend was quit outraged at this and walked away in disgust. For me I’d rather make a donation to a reputable charity organization to help the folks in Sichuan who were devastated by the earthquake. Therefore, I bargain hard when necessary and choose vendors I know do not overcharge ‘hellos’.

  11. Yikes. A few issues with this post…

    1. I find this description of how South Korea and Thailand developed….curious, to say the least. There are many variables at play in analyzing why certain countries develop faster than others, and while ‘resource curse’ is one of them it is far from deterministic. By your logic, Korea’s tourism industry is smaller than Thailand’s because it chooses to focus on other industries. Do you not think that if Korea had Thailand’s climate and spectacular beaches it wouldn’t promote them as tourist attractions?

    2. The Cambodian example doesn’t really prove much, at all. Several teachers I know left the field to take higher-paid positions in the private sector, and this is in the United States, not Cambodia. Aside from producing garments for export to the US, tourism is the only industry in Cambodia. I do believe that the country has far more acute problems than a few English teachers driving foreigners around in tuk-tuks.

    3. I’m not an economist, but I’m pretty certain bargaining doesn’t cause inflation. Do you take this attitude at yard sales back home? The only thing that matters is that the seller and buyer reach a mutually beneficial agreement. I don’t see how ethics have anything to do with it at all.

    When buying a car, a savvy consumer can negotiate a far better price than the average person. Bargaining is simply a market practice in which knowledge of production costs comes in handy.

    I agree with Ryan- there’s an implicit degree of condescension in this post, a sort of ‘white man’s burden’ that we harbor some sort of responsibility to the oppressed people in developing nations.

    Bargaining is the norm around the world. I like it. I think it more accurately reflects reality- the same things can be worth different prices to different people- than our fixed price system back home.

    But maybe that’s just me. And in any case, I thought your description of the different kinds of bargainers was spot-on.

  12. @Matt: Excellent reply, it’s nice to have someone read my writing thoroughly enough to post such a long reply 🙂

    I’m well aware that there are differences between Thailand and South Korea, and that my comparison on a simple blog post certainly does not tell the entire story. But what if you look at a country like Malaysia, which has beaches that certainly can rival any of Thailand’s great ones. Yet Malaysia focused on other industries first and allowed tourism to follow afterward, putting them in a much better position. I originally intended to discuss Taiwan, but I didn’t want to create any backlash by labeling it as a “country”, so South Korea was the first one which came to my mind.

    My point is that on a nation’s path to development, they can either take the hard way or the easy way. Marketing so hard for tourist money is a very, very easy way to earn some cash, and it is one that many places are taking (including several in China). This gives them a huge amount of problems in several different ways (i.e. pollution, loss of culture).

    I don’t mind if you call this post preachy, perhaps it is. But is it preachy to buy fair-trade coffee? How about bringing a cloth bag to go shopping? Or driving a hybrid car?

    These purchasing decisions are tied very deeply to ethical decisions as people who make those purchasing choices are doing them because they realize that their actions have long term and far reaching consequences, just like all of ours do.

    The purpose of this post is to try to shine a small light onto the consequences of our everyday purchases. Which, like it or not, have a vast amount of ethical consequences in a butterfly effect sort of a way.

    And I never said that bargaining cause inflation, quite the opposite. Not bargaining hard enough is what causes it. Inflation is simply caused when the value of goods or services increases, in paying too much for anything (like say, a Mao Watch) you are increasing the monetary value for local goods and services. This seems all well in good if people are getting paid more (like those taking our money in the tourist sector) but for people who have other jobs, like teachers, this can be a huge problem, and make them turn to a different career path, like tourism. If you are a believer in the sanctity of the free market, then that’s all well in good, but you have to ask yourself. Who is going to be teaching the kids? Who is going to be training the workforce of the future generation? It’s clearly not going to be a tuk-tuk driver.

    I do not feel that we have the “white man’s burden” to civilize the hordes. However, I think that as people who were born with a great deal of fortune, we can NEVER take it for granted, and it is our responsibility to do what we can, however minuscule as it may be, to not make the lives of others worse. If that is preachy, I will gladly find a pulpit.

  13. There are so many situations when a starry-eyed traveler will look at a certain item at the market, not really wanting it, but still ploughs ahead with a ‘duo shao qian?’. The seller usually names a price, the buyer doesn’t like what he/she hears and it will be a back and fro of uncomfortable negotiation. In the end the buyer storms off, or feels cheated, on something he/she didn’t even really want in the first place!
    My rule in negotiating is that I look at an item, decide how much I want/need it, what it is worth to me in RMB and then ask the price. If the seller gives a higher price, I’ll negotiate. If the price is what I had in mind (or lower), I’ll still negotiate, but not as aggressively.
    Don’t feel bad about negotiating: no seller will sell you something at a price below cost, and you shouldn’t ever feel obliged to pay more than what you feel any item is worth to you.
    Btw, Matt, your feedback is top drawer.

  14. @Glen. I’d guess your not a history, religion, geography, Asian studies or economics major! I also guess you’re (in fact) not well aware that there are major differences between Thailand and South Korea, and you comparison on a simple blog post certainly does tell the entire story. The entire story about your biases and beliefs.

    Matt said it best – an implicit degree of condescension in this post.

    You’ve been here less than a year so come back when you have something to say that’s informative, accurate and not just observational or preachy.

    That’s the problem here with some of the blog writers – They are good at writing but just don’t have anything to say about China or Asia. Anything that is accurate and informative, that is. (I enjoy reading blogs about China from newbies. It often shows me something I may have overlooked with my sometimes jaded eyes. The Peking Duck’s story about the pregnant women population and the newbie midwife in China is a case in point)That blog is about a newbie. It’s not written by a newbie.

    Also – Let’s be honest Glen . You had no idea that Chinese grow their fruit and vegetables in human fecal matter (other blog post). Otherwise you would simply have mentioned it before posting. Like that post and now this one, when corrected you simply add the “I’m well aware of the shenme,shenme. shenme.

  15. @Nedzer

    For starters, thank you for reading and commenting on those two posts, it’s nice to have such an avid reader. Secondly, I hope you appreciate the hypocrisy and irony in you saying that I am be condescending in my post, while you then go on to ramble about how I am not qualified to comment on such things in such a negative way. I hope that the irony was intentional, if it was, well played.

    I will never, ever claim that any post is not a reflection of my own beliefs, and biases, that is the very nature of a blog. A place to post an opinion, of course I try to back it up with facts, but I am not going to be so thorough as to footnote every single thing that I say, because quite frankly, I left that behind when I finished my degree in history (actually, as a double major in history and math).

    I am well aware that as someone who has not been here for even a year my knowledge of China is limited. I make no attempt to hide how long I’ve been here, it is for everyone to see if you look at the top right of the screen. I fully expect any readers to take that into account when judging the opinion of my writing, I never claim for it to be gospel truth, merely my opinion on the topic, as every other blog post is. If you want things to be more academic and fact related then you should read The Economist or JStor articles more than blog posts.

    And in relation to my other post, I am impressed at your ability to hold a grudge. I had heard stories of “Night Soil” but did very little research into them, and just followed simple travel precautions and never once got sick. This meant that in my opinion it was not an issue, as such I left it out of my original post, and instead focused on the obstacles that a vegetarian would face in order to avoid being given meat (which are numerous) and offer some advice on the basics. This of course, was by no means inclusive, and was meant to be an introduction (thus the name of the post). When comments began coming about it (started by you) I did a bit of research, and asked my friend Carrie (who is studying her masters in sanitation) and asked her if it was an issue, and she made the response on the topic, essentially calling it a non-issue.

    I am well aware of implicit differences between Thailand and South Korea (i.e. I have been to Thailand’s great beaches), and to say that I don’t understand that basic fact is more than a touch insulting, and borderline childish. I do admit that I did not explain that enough, and if I were to re-write the article (I won’t edit it out my flaws, that’s not very responsible I think) I would have used Malaysia instead of South Korea. According to Wikipedia, Tourism makes 6% of Thailand’s GDP, which is the highest of any nation in Asia. This can not be healthy, or sustainable, especially with the frequency of political unrest in recent years.

    When posting a blog, the writer (i.e. me) needs to be aware of the desires of the reader. I felt, and I feel rightly, that a typical reader here at LLW would not be particularly interested in reading me drone on and on about economic theories behind inflation, and problems caused by the distortion of economies. I felt that any such discussions would arise in the comments, and I feel justified in that.

    Speaking of which…

    @everyone else:

    At this point, I feel that it is important to look at the causes of inflation. Most economic theorist believe that it comes as a result of an increase in money supply. This creates an increase in the cost of goods. To a certain percentage (usually around 3%, depending on who you ask) this is good, and a totally natural phenomena.

    Part of my initial thesis here is that in routinely paying too much money for goods creates too large of an influx of money, which can cause inflation to rise at a rate that is too fast for people who are not profiting from the tourist sector. If people are not able to afford essentials, they will obviously seek other employment in a sector that can they can earn enough in. For many places, this is most obviously the tourism sector. While this is economically beneficial, it certainly has social implications.

    How can it be good for a country to have teachers paid little while tour guides make so much money?

    Overpaying can lead to a distortion of the local economy, which has all sorts of far reaching consequences.

    In doing a bit of research for the more constructive comments, I can across an excellent article called “Is tourism helping to alleviate poverty in the poor southern hemisphere countries?” by Daniel Peak (available here [pdf]) he raised an interesting point by saying the following:

    “Tourism in LDCs also contributes to the informal sector in the form of “tourism services” such as taxis and personal guides and “street vendors” such as food and beverage and souvenirs. A study in the Gambia by the Overseas Development Institute found that 33% of discretionary spending was in the informal sector. Although a large source of urban employment, these small, mostly family owned businesses do not compensate as well as other sectors as they do not have access to capital in order to “grow” the business. For example: a souvenir street vendor in a LDC would probably not have the capital (or lending capabilities) to hold enough inventory to satisfy demand during the busy season, therefore the small enterprise would constantly run out of stock and therefore business would never have a chance to grow. Also, the owner may not make enough profit to pay another person to stay open late at night for the tourists. Therefore, it is often accepted that sons or daughters are to help out at a young age, which in turn makes going to school more difficult. Finally many participants in the informal sector are unregistered business which do not pay taxes (or cannot afford to pay taxes) hence they are not contributing money for infrastructure and long term development of the country.”

    I find this to put all of us in an ethical gray area. Do we support large businesses and chains, or do we help small family run businesses, especially ones that have their children help run the business? Which I think happens far more frequently in China than I think any of us would like to admit.

    Of course, many of you have already stated in the comments that you believe that ethics should not play any role in your purchasing, which I do not agree with but respectfully disagree with. However, should any of you be interested in some ethical tourist guidelines, I would recommend the ones posted by Haivenu at http://www.haivenu-vietnam.com/responsible-tourism-policy.htm.

    We won’t all be perfect, but it’s got to be better than nothing, right?

  16. Profile photo of

    Wow, some interesting discussion is arising here.

    @Matt: Well said.
    @Glen: Well replied.

    @Nedzer: Do you own a shirt with the number of years you’ve been in China? Anyone who’s lived here a while sees your point, but it really doesn’t stop you from coming off as a prick. That you’d bring up your argument about night soil as some proving point that Glen doesn’t know what he’s talking about seems a bit paradoxical. The comments in the OP and the few people I’ve asked since have all indicated it’s, as Glen said above, a non-issue.

    Add to this that your comment attacking Glen is full of bark, but no bite, I’m not sure what you’re even disagreeing with.

    As for the experience level of blog writers here at Lost Laowai – if you’d like to contribute more than flame-bait attacks, you’re more than welcome to.

  17. @Ryan _you’re such a pompous twit. I doubt you have the self awareness to see it. Note – I said “I doubt” , perhaps you are aware of you own pomposity. Maybe you are aware of how pompous it is, to not give your mother a gift on mothers day and instead send her a card saying you donated to a charity of your choice. I’m sure your mother forgives you. How did you get so arrogant (regarding your thought processes, not mothers day)? That’s my question to you.
    Secondly, why would I want to write for your website? Birds of a feather flock together – you would not like nor agree with anything I would write. It goes against what you believe. Your website attracts like minded individuals who write what in essence you already believe to be true.
    If you want me to rise to your challenge (about blogging on this site) here is the title of my first article. “On why the Dalai Lama is evil”. You post it unedited.

    @ Glen – you just proved to be aware of what you blog about after the fact again. Either write something with the facts or don’t write at all.

  18. Profile photo of

    @Nedzer: Really? Birds of a feather? Dude you’ve left more comments than the majority of the people that visit this site (with views inline with mine or not). What the flock are you talking about?

    As for being pompous – I may be, but you make a strong case for kettles and pots. I understand that self-importance is a component of any blog — whether in comments or posts — as to sit down and clack any opinion out takes a certain level of assumption that your opinion is important enough to do so.

    And I’ve yet to see any restraint in this area on your part. You seem to have an (almost always negative) opinion on whatever the topic of the day is. In fact, you go so far to end your last comment with “write something with the facts or don’t write at all.” What the fuck? Pompous doesn’t cover it. You seem to think we’re all hear to entertain or educate you in some way.

    As for why you would want to write for this site – you seem to love to. Should I go to the effort of counting the number of comments you’ve left on a site you seem so at odds of being counted as a part of?

    My offer stands. If you want to submit a post, send me your post. I wont promise to run it, but I will promise that if I do, I won’t edit it.

  19. @Nedzer. So are you saying that I need to understand everything about a subject in order to write about it? Because if so, then I doubt anything will ever be written by anyone, ever. In both cases, I made what I considered to be an informed post, I have been a vegetarian for a long time, and have lived in China long enough to understand the difficulties, and I gave a considerable amount of thought to the ethics and the economy of our own actions. In both cases I was challenged in the comment section and I decided to do some further research to further justify, or challenge my own point.

    With the “Night Soil” point, I considered it to be a non-issue, you raised it, so I did some further research, including asking my friend, who is as close to an expert on the field as I know. She posted a reply, I thought it was a done deal. If she was incorrect, I was hoping to get further points from you, but since you did not, I assumed it was a done issue. Apparently it wasn’t for you, since you still hold a grudge.

    I wonder, if you think that sites like this are all full of the same type of people, then why did someone like Matt (who also writes for this site) post the most intelligent and challenging argument against what I said? Also, I wonder which on-line community you think best defines you, because I would love to go and read that one.

    People here do not all agree on everything. I first took a more active roll in this site after reading Ryan’s post on The Humanaught concerning his atheism, I generated a series of posts disagreeing with him on his central thesis, yet I respected him as an individual enough to not tell him to stop writing, because that would be, you know, rude.

    Also, if you think that I am not writing with the facts, then I gladly welcome any comments, I do have the ability to moderate the comments here, but I have not deleted any of them that challenge my point. If I do feel challenged, I will do some extra research. I think that makes me less pompous than other people in this strange ex-pat on-line world that we inhabit.

  20. Ah, I’m not going to argue. I take myself too seriously sometimes. My last post (written drunk at 4:30am) lets me know I need to lighten up, and not stay out till that hour. I’m sorry for those comments Ryan and Glen. I have no grudges. Yeah you’re right, Glen – I’ve been rude. So, sorry fot that.

  21. Profile photo of

    I have strict (and semi-followed) rules about no longer blogging or commenting when I’m drunk – combative or not, at least your words were coherent. I’ve not always been so lucky! 😉

    No grudges here either.

  22. No worries Nedzer, no harm, no foul. You made some great points though, especially when considered in a more rational light. But be like Ryan, don’t drink and blog. People get hurt 🙂

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