Xinhua carried an article that was originally published by Sichuan Daily. The article reported that the foreign luxury goods in China’s market are priced 45 percent higher than those sold in Hong Kong, 51 percent higher than in the U.S. and 72 percent higher than in France. The higher price occurs mainly because of of the markup from various sales channels and because of the tariffs imposed on luxury goods.
Meanwhile, products that are “Made in China” are priced lower in overseas markets than in the domestic market. One of the reasons stated was that China sets the export price of the goods at the manufacturer’s cost. Manufacturer’s profits come mainly from tax rebates. Another factor that drives up the domestic cost is the higher transportation expense. According to the article, Chinese consumers tend to favor foreign imported items because of the better quality. They lack trust in domestic made products.
Source: Xinhua, November 4, 2012
http://news.xinhuanet.com/fortune/2012-11/04/c_113597301.htm