• aodhsishaj@lemmy.world
    link
    fedilink
    English
    arrow-up
    2
    arrow-down
    1
    ·
    10 months ago

    The exchange rate does not directly correlate to purchasing power. There are many factors that go into it.

    • Buelldozer@lemmy.today
      link
      fedilink
      English
      arrow-up
      8
      ·
      edit-2
      10 months ago

      The other poster didn’t say anything about the exchange rate, they said Purchasing Power. According to OECD (2024), Purchasing power parities (PPP) (indicator). doi: 10.1787/1290ee5a-en (Accessed on 09 January 2024) the PPP (Purchasing Power Parity) between USD and the Yuan was 3.989 for 2022. So a 25k vehicle in the PRC is basically a 100k vehicle in the USA. You can purchase some excellent EVs in the United States for $100,000.

      In fact the article is guilty of doing exactly what you’re talking about! Doing a direct conversion from RMB into USD without adjusting for PPP, basically throwing out all CoL differences, is what leads to stupidity like this article.