High retail prices of Chinese goods to another part of the reason is that most of the goods to levy 13% VAT, but more important reason is that the efficiency of China’s retail sector is lower than the United States. Wal-Mart in China is very successful, but its market share in China, far less than in the U.S. market share, but small, the profit is very high. Many Chinese supermarket stores are small family-run shop or supermarket, together with urban high rent prices and other factors all contribute to the store or the supermarket retail price high situation. This also greatly reduces the Wal-Mart’s low-cost competitors in China.
So, in China, manufacturing retail production easier than making money because of high retail margins, far from being squeezed by the market as the U.S. retail industry, the situation estimate that it will continue for many years. So for Chinese consumers, especially urban residents accounted for 40% of the population, they have to pay the same money with the consumption of U.S. residents, while U.S. residents earn far less. In other words: low-income, high consumption.