Someone posted this article over at HN. Best current summary I've read on the topic to date. And his comment really sticks out:
This article really struck a note with me. The atmosphere here in Beijing really has changed a lot over the past few years. The relative wealth of the 2 countries is directly evident in the different attitudes of Western expats and native Chinese towards money. The expats here are becoming noticeably poorer. I see it because I am a retailer of luxury goods.There was a time when being on an expat package in Beijing meant living the good life - you could splurge however you wanted because the cost of living was so cheap. Today, my products are really pushing the affordability of the expats here but are considered a great value by the new middle class here. Several times a week I get complaints from expats that our prices are too high. I've never heard that from a Chinese. Indeed, the opposite is true, several times a week Chinese people tell me what a good deal I'm offering.It's actually getting a bit problematic for me. Inflation's pushing my costs up and my competitors are raising their prices as well. I've been raising prices alongside everyone else, but I'm really about to price myself out of the expat market. Expats who receive their paychecks in dollars are seeing their purchasing power diminish and I think it's having a big psychological effect on them. They're really important to me, but I would be crazy to not be trying to reduce the percentage of sales that they constitute.This is directly impacting my spending decisions. A few years ago, it would have made sense for me to drop money to advertise in expat magazines. These days, that extra money's all going to marketing towards the Chinese.