• aodhsishaj@lemmy.world
      link
      fedilink
      English
      arrow-up
      2
      arrow-down
      1
      ·
      11 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
        11 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.