Foreigner Tax

In August of 2000, I arrived at my new job in Shanghai, China. I was hired to teach English, Business and Communication at Shanghai University. My Chinese language skills were extremely poor and the only thing I knew about their culture was what I had read in travel logs or watched on National Geographic.

Fortunately, when I went over, I wasn't alone. My friend Jake went with me and together we tackled the task of learning about our new home (in addition to writing lesson plans and conducting classes). What we soon discovered, in going about our daily lives, was the presence of what we called, "Foreigner Tax."

This was the premium that sellers would immediately add to the thing we were trying to obtain (food, transportation, etc.) as soon as they saw our blue eyes and our "non-Chinese-y-ness." Normally the tax ranged from 20% to 150% higher than what the locals would pay for the exact same thing. It didn't help that we could barely speak Chinese and most of our communication was either sign language or with long pauses as we looked up the correct words in the phrase book.

One particularly heinous use of the foreigner tax was during a trip to Qingdao (Americans could probably readily identify it by the British spelling of Tsingtao and the fact that the Chinese beer with the same name comes from there) in Shandong province. Jake and I went out to eat at a street stall, which had a variety of fresh seafood and vegetables that they were willing to cook into whatever dish you could imagine. Jake and I picked a few we recognized and said the Chinese words for the dishes we expected. Nothing too exotic.

The dishes arrived and they were pretty tasty. We each had a beer, too. Finally we said the Chinese words, "Mai dan," which means "Bring the bill." We were expecting maybe 40 to 60 yuan for the meal (based on what we had been paying elsewhere for similar dishes). The cook came over and said, "350 yuan."

As some of you may know, that is the yearly wage of some Chinese and the monthly wage of most. We were shocked. We looked at each other trying to figure out what to do. We didn't have that much money on us at the time, plus we knew the "Foreigner tax" was coming into play in a major way. By this time our Chinese had improved somewhat, so we turned to the people next to us and asked them how much they thought we should pay. They whispered, "40 yuan maybe a little more." The cook saw this and she started screaming at them in Chinese. They quickly turned back to their food and ignored us.

The cook kept pestering us and a small crowd was beginning to gather as we were arguing that 350 yuan was ridiculous. At least I think that's what we were saying. Finally, Jake pulled out a 100 yuan note, threw it on the table and said, "Run!" So we ran. And ran. I don't think they chased us that far, but we were determined to get away.

That was an extreme example, but typical of the "tax" I often had to endure. I was charged foreigner tax less and less as I learned more and more Chinese and more about the culture, especially the fair cost of things. If the vendor tried to raise the price, I would say that it was too high and I could go around the corner and get if for a better price. This type of bargaining usually brought the price down quickly to a more reasonable level.

As I learned to listen more, too, I heard that the Chinese often talk with each other about what a fair price is for something. It was not uncommon to hear two classmates chatting about what one of them paid for a shirt, or what the other paid for a new handbag. They were constantly sharing information about where to get the best deals and what a good deal was. If I ever told them I bought something, they would immediately ask me for the price and then when I told them, they informed me I paid too much and I should have gone to so and so.

We all pay foreigner tax no matter where we live. Having returned to the U.S. from China, I think I would now call the foreigner tax the "Ignorance Tax." The less we know about something, the more likely we are to get "ripped off" or pay too much for it. The purpose of this website is to learn more about money and the best ways to spend it (or save or invest it) without getting "ripped off." So let's all continue to share our experiences with each other here, just like the Chinese, so that we can stop paying "Foreigner Tax" and erase our ignorance about money.