A customer holds Microsoft’s Xbox One game console limited edition in an electronic shop in Shanghai on September 29, 2014.

The Xbox One has just launched in China on September 29, 2014. People actually lined up for the box despite the price of 3,699 yuan, which is about $600. The Chinese are paying 50% more.

In China, the prices of the imported goods are always in a much higher price than in other countries. There are several reasons contribute to this issue.

• The first reason I think is because of the import tax. In China the value added tax is about 17% , which is much higher than another Asian country Japan, which only has 5% tax rates.
• Second, because of the gap between the rich and the poor, many Chinese people cannot afford the Xbox but many rich ones can buy it without any hesitation. Increasing demand will lead to a higher price.

Such a high price actually brings both pros and cons.

For pros:

• The most distinct point is protecting the sun-rising industry in China. Because high price makes some consumers less likely to purchase the Xbox, so domestic products may have more chances to attract potential consumers.

For cons:

• Chinese government has a low awareness to control the price over imported goods. It results in the supernormal profit of the dealer. Which makes consumers worse off.