The exchange rate cannot describe your life
Converting dollars to renminbi describes cross-border assets and globally priced goods. It says nothing about the difference in rent, space, commute or services between two places.
CROSS-CITY CAREER · DECISION COURSE
Earn X in the US.
What is that in China?
It is not a matter of picking an exchange rate.
It is deciding what you want to have left.
Pre-tax total compensation−Tax and mandatory deductions−Cost of living=Global assets, in dollars
THE COURSE MAP
This is not a course about exchange rates. It is about a career decision
You may have arrived at this question through an offer in the Bay Area or in China, or a passing thought about moving back. What the course tries to give you is a way of judging that is harder for a salary figure to mislead.
Its common yardstick is not whether you consume exactly the same things. It is this: after the life you choose again, how much can you still add each year to global assets you are free to allocate, measured in dollars?
THE ONE SENTENCE
Do not ask "how many times more is US money worth in China?"
Ask "after living the life I want, how much is left that I can take anywhere?"
Chapter 1 · Ask the right question
"Equivalent to" what, exactly?
Purchasing power parity (PPP), the exchange rate and pre-tax salary are all real numbers. Each describes only part of the question.PPP cannot describe your assets
Local services may be cheaper, but the money left over each year, the part you can put into global assets, still has to be measured on one dollar scale.
Salary is not the final answer
What actually enters a life decision is after-tax income. It first pays for the life you choose, and what remains becomes assets you can take anywhere.
Chapter 2 · Find a common yardstick
Replace "income" with "yearly growth in assets"
We do not try to put one price on every way of living. We look at what is left at the end of the year.After-tax income
Base salary, cash bonus and vested RSUs are combined into the income available that year, then tax and mandatory payroll deductions are taken out.
Local life
Space, convenience, services, everyday food and the commute are a budget you choose again in the new city. They are not the old city's bills copied over.
Global spending and assets
Travel, software, electronics and international brands track the exchange rate more closely. The global assets left at the end are measured strictly in dollars.
IncomeBase salary + bonus + vested RSUs
→After-tax incomeLess tax and mandatory payroll deductions
→Yearly allocationLocal life + global spending + global assets
Chapter 3 · See how choices change the answer
The same $500K in the Bay Area has two Shenzhen answers
People with the same income are not necessarily in the same financial position. The difference is how much they add to global assets by the end of the year.A: experience first
In the worked example, A puts more after-tax income into Bay Area local life and global spending, and adds about $110K a year to global assets.
B: assets first
B trades a lower local budget for more left over, and adds about $200K a year. Both choices are reasonable.
Moving is not a currency conversion
Even if the two choose the same local budget in Shenzhen, they need different after-tax incomes to meet their different dollar asset targets.
Worked example · only to show the mechanism
Both earn $500K pre-tax, and both are taken to have $296K after tax
If the two choose the same local budget in Shenzhen, B still needs about ¥650,000 more after-tax income than A to keep the same yearly growth in dollar assets. The difference is not the exchange rate. It is the asset target.
Chapter 4 · Use it for a real decision
Choose the future first, then work back to the offer
The tool does not tell you which city is "worth more". It turns the trade-offs into assumptions you can discuss.Assets first
Lower the local budget and keep more after-tax income as future options anywhere in the world.
Balanced
Leave room for both a comfortable life and steady saving. A reasonable starting point for most people.
Experience first
Spend more on space, convenience, services and the present. The tool shows honestly what that does to asset growth.
PUT THE MODEL TO WORK
Now make it your question
Start from where you really are, or set a dollar asset target for the future directly. Treat the numbers as assumptions to discuss, not as a firm quote.YOUR DECISION MODEL
Fix the goal first, then work back to the offer
This is not a dollar-to-renminbi converter. It splits after-tax income into local spending in the target city, global spending and global assets in dollars, then works back to the pre-tax total compensation required.CURRENT POSITION
What do you keep each year now?
Effective tax rate (tax / total compensation)41.0%
From the default tax model. Drag to override.Estimated yearly growth in dollar assets$109,832After-tax income − local spending − global spending
FUTURE CHOICE
What do you want to keep in Shenzhen?
Effective tax rate in Shenzhen (tax / total compensation)34.9%
From the default tax model. Drag to override.THE RESULT
In Shenzhen, you need about
¥2,355,733in pre-tax total compensation to make this set of yearly choices work.- After-tax income required
- ¥1,468,823
- Of which, dollar asset target
- $109,832
- Income equivalence ratio
- 4.71 ¥ / $
In this result, about 52% of the after-tax income needed in the target city goes to keeping global assets in dollars. The rest pays for the local and global spending you chose again.
So this number is not a "personal PPP". As the asset target grows, the result moves towards the exchange rate. The difference between cities matters more only when local spending is a larger share.
Where do these numbers come from?
01 · Current growth in dollar assets
$294,832 after-tax income − $150,000 local spending − $35,000 global spending= $109,832 / year02 · After-tax income required in the target city
¥450,000 local spending + ¥250,000 global spending + $109,832 × 7.00= ¥1,468,823 / year03 · Working back to pre-tax total compensation
¥2,355,733 total compensation − ¥65,000 social insurance and housing fund − ¥821,910 tax= ¥1,468,823 after-tax income04 · Effective tax rate
¥821,910 tax ÷ ¥2,355,733 Pre-tax total compensation= 34.9%SEE THE WHOLE CURVE
As income rises, how does "what each $1 is equivalent to" change?
Assets firstBalancedExperience first
The vertical axis is not the market exchange rate. It is the income equivalence ratio: at each income level in the source city, the pre-tax total compensation needed in the target city to keep the same growth in dollar assets while living in that line's spending style. Each line uses a spending share that falls as income rises: the absolute budget can still grow, but more of each extra dollar becomes dollar assets, so someone who puts assets first usually needs a higher target income. Where income is too low to leave any dollar assets, that style's line is not drawn, because the premise of keeping asset growth does not hold. The dashed orange line is the planning exchange rate. Curves approach it as the saving share rises, but because the vertical axis compares pre-tax total compensation on both sides and the two places keep different shares after tax, a curve need not reach exactly 7.0. If your assumptions push a curve above the exchange rate, the chart extends and does not cut it off. Under the "Balanced" assumption, your position is about 4.69 ¥ / $.
Model limits and tax assumptions
For a single employee with no children who rents. Not included: a partner, children, buying a home, employer health insurance, 401(k), special deductions, investment income, the risk of unvested equity, returns on property and friction in moving money across borders.
The default planning exchange rate is ¥7.00 = $1.00 and can be changed above. The effective tax rate knob defaults to the model; overriding it replaces the tax part, while employee social insurance and housing fund on the China side stay separate. Those are deducted pre-tax and also reduce taxable income; they are not deducted again after tax. The defaults of ¥65,000 for Shenzhen and ¥80,000 for Shanghai are only a starting point for a high earner: contribution base caps, the housing fund rate, and whether bonus and RSUs count towards the base all change the real figure, so override it with your payslip. The Bay Area side is a planning estimate of federal tax, California tax and FICA for a single W-2 employee in California. The China side is a planning estimate using the annual comprehensive income tax rates, the ¥60,000 basic deduction and an editable personal deduction. None of this replaces tax filing, compensation or cross-border legal advice.
TAKE THIS WITH YOU
What an offer is worth
is not all written on the offer.
First How do I want to live here?
Then A year from now, how much do I want to have added to global assets, in dollars?
Last Does this job provide enough after-tax income for that?
DISCUSSION
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