One US dollar is worth approximately eight Chinese renminbi. The problem with the 8 to 1 conversion is that it doesn’t help us to make decisions about the value of the things we buy.

Some consumer items cost the same in China as they do in America. A pair of Nikes costs over 800 RMB ($100). A mixed drink at a bar costs over 40 RMB ($5). Neutrogena Moisturizer with sunscreen costs 64 RMB ($8). Those prices are perfectly reasonable to someone earning American dollars. But we aren’t making American dollars. We have a combined income of 8,500 RMB ($1,062.50) every month. On top of that, we get free housing in a posh neighborhood, complete with utilities. So, how do we make decisions about what to buy, and what is the relationship between things that are affordable in American dollars and things that are affordable in renminbi?

The solution is the Wedding Gift Index.

In the United States, people often give cash gifts for weddings. The standard size of the gift is $100. Giving cash at Chinese weddings is a tradition, too. They sell red envelopes (红包 - hóng bāo) just for that purpose in the stationary section of Chinese department stores. The standard amount to put into those little, red envelopes is 200 RMB.

We have thus set the Wedding Gift Index for the reasonableness of products and services at one US dollar to every two Chinese renminbi.

According to this index, some things are just as affordable in China as they are in America. Getting a DVD costs 7 RMB ($3.50). Dinner for two at a mid-level restaurant costs between 100 and 200 RMB (between $50 and $100). Every week we spend about 350 RMB on groceries ($87.50 per person).

Some things in China are incredibly cheap. A 640 milliliter-bottle of Lao Shan beer costs 2 RMB. That’s one-and-one-third pints for what feels to us like one dollar. A bottle of bai jiu, the local fire water, costs as little as 7 RMB ($3.50), but it can go up dramatically from there. Lunch at the school cafeteria costs about 4 RMB ($2) per person. Riding the bus costs only 1 RMB ($0.50).

There are some things that are totally unreasonable when we do this conversion. We would never buy basketball shoes for $400, so we won’t spend 800 RMB on them here. And we will never go back to the bar where we were charged 100 RMB for a pitcher of beer, because $50 is entirely too much to pay for beer, when we can drink it at home for $1. And I laughed at an art dealer who told me that the painting (acrylic on paper) I liked was worth over 6000 RMB, when he had it thumb-tacked to the dry-wall in his gallery. If I had a painting worth $3000, I would spend the money to put it in a frame.

And even though $32 (64 RMB) is too much to spend for a bottle of moisturizer, I buy the imported stuff anyway. The local brands all have whitening agents, which are scary and totally unnecessary for a pale face like me.

There are some costs that are not subject to the 2 to 1 index. All pregnancy expenses are calculated using the 8 to 1, standard conversion rate. That’s because having a baby is an experience that is significant for my life as a whole, not just for my life in China.