Chinese economics

[Rhonald]

Shaun, both of our girls are living in Shenzhen right now. My wife says her monthly expensis are about 3,500 rmb. She does have her son living with her in a two bedroom place so it seems on par with Peggy's amount.

[Bee964]

This issue is interesting to say the least. Just  for the hell of it I converted my pension I get every month. Approximately $1650 CAD converts to 10,750 rmb per month. I am guessing that I could live like a king if I moved to China. Like an emperor if I live in a rural area. I have raised chickens before.

Different regions in any countrys' economy will have different levels of standards of living and you will have to earn different wage levels to maintain the standard of living for the respective area. I think Ted was just stating what the minimum wage was increased to in Guangzhou, not the whole of China. If people actually get paid this may be a different story. Sometimes there is a big difference between the official standard and what is the real standard.

David5o,

The last woman I was chatting with on QQ worked at an insurance firm in Huizhou.(I think that is how it is spelled) She was going to quit that job for a better paying job she could get. She told me she was making around 1100 RMB per month with the insurance firm. She said she only had the one job. This is just what she had told me. It did not look like she had an extravagant lifestyle either. We did have a couple web cam sessions and she did show me some of her apartment. This new woman I have started chatting with is an accountant for a company and she lives in Guangzhou. My curiousity is now raised.

On another note I did read an article on the changes going on in China. It said that Shenzhen was a quaint little fishing village only a couple decades ago. I will have to find it and quote it. I think it was National Geographic.

Dave C

[shaun]

Dave C,

Shenzhen back in the 1980 was a quaint little fishing town.  China began pumping millions of dollars into the area to make it the main shipping port for China.  Most all of the buildings are less than 30 years old.  When I was there in April the one Peggy lives in was in the beginning process of getting a facelift.  It need a complete re-doing.  It is less than 20 years old and with the least amount of effort I twisted off a valve from the main coming into her home.  Left the threads in the main.  Hard to hire a plumber to come in and fix it because I did not have the tools to do it.  It only cost 30RMB.

The story I told you about the quaint village came from the interpreter I used basically started this thread because she wanted 1200RMB for about 12 hours of work, plus meals.

Ron, thanks for the info.  I was beginning to wonder.

Shaun

[David5o]

Rhonald,

Your wife must be living in quite a new and smart apartment for her to need that amount to live for a month, or she is used to and so living a higher standard of living than, .....let's say the average worker.

I'm taking it that her son is working also, is she combining salaries here??

David....   

[maxx]

Shaun the Chinese call it a special economics zone.The Chinese government in 1976 started pumping money and resources.And opened up Guangdong province to foreign investments Zhuhai Shenzhen were both small fishing villages.Shenzhen now has a population of over 5 million and Zhuhai has a population of over 3 million.

There is other special economics zones in China.But I cant remember where there at right now.I think Beijing and Shanghai fall in to the same category

[shaun]

Maxx, Thanks.  When I was there in April Shenzhen had crossed the 13,000,000 mark.  I don't know how they derived that figure but their web site says 8.7 million.  needless today it is very large and is suffering from the growth rate when you look at a lot of the  buildings and their condition.

[maxx]

Wow it has grown allot.The last time I was in Shenzhen.It was five or six million.That was in May of 2006.Yes most of China the building are in bad shape.The farther you get into China.The worse it gets.I have ben to some towns and some of the villages.You would think a bomb went off in the center of town.And nobody bothered to clean the mess up.

GZ,Zhuhai,Beijing,All look good.Zhongshan the part I went to was really run down.And the parts of Jiangxi province.That I seen was run down.I  don't think it would be so bad.If China enforced it's building codes.The buildings would probably wear allot better.What really bothers me.Is the Chinese build great buildings.Monuments,And parks.But after they build it there done with it.It looks like to me that thiere is no ongoing up keep.

[Bee964]

Maxx, Shaun,

That is some city growth!! Almost tripple the population in less than 4 years!! Wow! I did not think it had grown that much that fast.

Dave C

[Rhonald]

David50 I got this from the following link:  http://www.startinchina.com/shenzhen/life/cost_of_living_in_shenzhen.html

Cost of living in Shenzhen 
Shenzhen is one of the most expensive cities to live in China, but still relatively cheap compared to most Western major cities.To give you an indication of how much things cost, I collected some prices. I'm sure prices will vary a bit depending on where you buy and which brand you buy, but this should give you a good indication. I rarely eat in Western restaurants and have adopted a Chinese eating pattern. If you enjoy Western restaurants, you obviously will spend more. Living costs are relatively most expensive, house prices came down in 2008, but have risen a lot again and buying a house in a good location in Shenzhen is expensive.


The areas near the border with HongKong (traditionally Futian and Luohu, but now also increasingly Nanshan) are a bit more expensive to live. Living in the center also has other benefits, for example closer to library, more shopping malls, more restaurants etc. Bao'an is currently fast expanding and when the subway finishes in 2011, Bao'an will be more convenient to live as well. Whenever you go to Bao'an (where the airport is) you definitely feel that it's further away from the center: less high buildings, broader roads, less people.


Compared to the Netherlands, Shenzhen is still much cheaper to live. Especially eating in restaurants in much cheaper. House prices had gone up a lot and were approaching Dutch levels, but have since dropped off quite a lot; since the start of 2009 they are rising again. Never trust prices you see advertised online, but come here and look around. Because house prices dropped so much, it's now easy to find a place to rent. Also realize that 100m2 is already quite big in China and it should cost below 5000Y/month. (I sometimes see advertisements targeted at foreigners asking ridiculous prices -be warned and just look around and bargain). 



According to Mercer's 2009 survey of living costs Shenzhen is now 22nd on the list of most expensive cities in the world for expats! Mercer's Cost of Living survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
 
 Just like salaries, the prices for renting an apartment vary hugely. You can go from 1500RMB/month for a cheap community, where normal Chinese people live to extremely luxurious which are twenty times as much ! Also be aware that the English-language classifieds are usually not the cheapest. Best option is just to look around while you are in the city and go to some Chinese real estate companies. Prices have dropped a lot in 2008, but have been rising since the start of 2009 again. Some examples of expensive apartments on offer at ShenzhenParty :

 Location  Size (m2)
  Description  price RMB /month
Futian CBD  109
  3 bedrooms (one master bedroom), 2 bathes, 1 large living room & 1 dining room  8.500
Futian Honey Lake   200  3 bedrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen, 1 balcony.   30.000
Futian, near to Co-co park 151  3 bedrooms ,and 2 bathrooom, fully furnished and equiped  12.000
Futian Che Gong Miao Metro Station  116
  2 bedrooms, 2 bathrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen  8.000
Luohu center,beside Diwang mansion  63  1 livingroom,1 big bedroom,1 kitchen,1 washroom  5.500
Luohu KingGlory plaza  42    2.000
Nanshan Coastal rose garden   127  3 bedrooms 2 bath  5.900
Nanshan/Shekou Sea Taste Garden   78  2 bdrooms, 1 bath , 1 nice kitchen , 2balcony , 1 living rooms  3.800

As you can see, 2000 is about the minimum you pay in reasonable locations. You can go lower by looking around in the city. It's easy to spend over 8000RMB/month for big apartments.

 
update december 2009:


Question (from a visitor to my website) :

"My company is considering opening an office in China.  I ran across your website while doing a search on living in Shenzhen.  I was surprised to read that the cost of living in Shenzhen was so high!  Based on your experience, do you think that Shenzhen is a good place for western technical companies to relocate?  How do you think westerners fare in Shenzhen?  Do they integrate into the culture?"

Answer:


There is a saying in Chinese:

"You think you're brave until you go to Manchuria, you think you're well read until you reach Beijing and you think you're rich until you set foot in Shenzhen". 

[Chong]

Because of the wide gap in China's income classes, I don't think 'average' figures are fair indicators of the country as a whole.

Here in Kaiping, my wife used to earn 2,000 RMB as an accountant. Her sister earns 3,000 RMB as a mid-level manager of a baby food company; her husband earns 7,000 RMB as a computer data maintenance person. That's 10,000 RMB in that household. Their monthly expenses runs about 3,500 RMB minimum ... sometimes more [ the have a 2 year old ].

On the other hand, a waiter makes 1,000 RMB.  A 5 star hotel restaurant manager makes 5,000 RMB. It wouldn't be fair to say that the average salary in a restaurant is 3,000 RMB.

[Alex_Lee]

I always think Rhonald is very knowledgeable and open-minded

[ttwjr32]

i would say his post are very informative at times and good posts

[David5o]

Rhonald,

I can see what your saying here, and see the point your making.

But the point that i've been trying to get over is that there are far more poorer, or  lower income Chinese families than there are, ...let's say lower middle class.  So it doesn't really matter what city we are talking about, there will always be a majority of those that do not earn the sort of money, that has been quoted in your post or any of the others on this thread....

You must know by now, that i have an inherent distrust for surveys and statistic reports, they can, and more often do, say anything the authour wants them to say!!!
I don't think that the information being given in your link was, or had anything to do with the local Chinese population and there needs, but rather for the local expat community, and wow!! what a difference there is between those two communities...

As Chong has just posted, ...because of the wide gap in income classes, it becomes very difficult to  make out a meaningful ''Average'' income, in any city in China. Which is why, when i have posted ''Average incomes'' on this and other threads, i've tried to point out these are among the lower levels of income earners. I'm not including any black market income, as that again is difficult to assess, though there are many gaining such incomes from such sources, and will raise the families monthly incomes...

As regards to the cost of housing, this totally depends on the families income as to what they can and cannot afford. One things for certain, there are very, very few that could afford 8.000RMB a month for renting an apartment. Even most well off middle class Chinese families would bulk at that figure!!

Most of the older buildings apartments and even a good number of the newer apartment blocks will consist of  apartments in the 40+ to 60 sqm range. There are of course older and newer blocks with apartments in the 70+ to 100+ and even larger sqm range. You will find that most Chinese families will be living in the that lower range of sq meterage

Perhaps Chong could give us some idea of how much his wife's sisters family, spends on their accommodation needs as a 10,000 RMB a month family. Though i suspect that they are paying off a mortgage rather than paying a rent. But it would still give some useful information on living costs from this standard of family and how that relates to the lower income families.

It's unfortunate that there are so many of these low wage earners in China, but while there are more workers than there are good jobs that pay a decent wage, the present status quo will continue for a good while yet i'm afraid!!!

David....

 
 

[Rhonald]

Well David50,

 I can not remember the exact break down my wife gave me when she told me her budget needs. I do remember her saying she spends between 3500 to 4000 rmb a month. If memory serves me right, she did say her place 80m2 cost her 2000 rmb a month but she also says that she owns. She only moved into it in November 2009 so a long way to go before it is payed off. Once she moves to Canada she does not want to sell right away because a new subway is being made near her place and she rather wait until then since she expects the market value to increase.

Her son will be 16 next month and provides to the family coffers by sitting all day in front of the electronic video/audio abacus. So it is just her earning the money. But I will say that food is cheap, but sometimes while she is picking me up in Hong Kong, she will go out to buy certain produce because she says it is cheaper in Hong Kong.

I have now been to China 5 times, although it does not make me an expert about all of China, I have always tried to pay attention to the economic situation of the cities I have visited. Every time I walk by a Rentail agency I stop and look at the prices offered. I look at the display at supper markets for produce. And so far as the link I posted, it seems to follow along with my eye witness account. The one thing that is not freely given to me when meeting her friends, or even when I ask her, is the income they make.

The little time I spent in Kaiping leads me to believe as you and Chong have stated is the wide range of income needed to live comfortably in different cities. If I had to give a rough and ready litmus test to city prices, maybe just the price set once a taxi is entered is a good gauge. The pricer the city, the higer the base fare rate is. Also the lower standard of the city, the more often you will see motorcycles and biycles being used in place of taxis.

[David5o]

Rhonald,

Well, 2,000 RMB is quite an amount of money out of a single persons salary, so she must have a good paying job. ....and Oh!! to being a teenager again, with not a care in the world, ...well maybe those Zits are a bit of a problem!!! ...hahaha!!!

Lucy has a sister, and her daughter graduated last year, and got herself a job in Beijing. Her sister found a small apartment for her in Beijing. The daughters salary, working for a big Japanese company was 1250 rmb per month and the apartment (shared with a friend) 850ish RMB a month, ...everyone's happy!!! lol!!!

But!!... the daughter is very much the Chinese Princess, and moved to an apartment costing 2000RMB a month within 6 weeks!!! ...Guess who's now paying the difference??   haha!!

Ron, the rental agencies that you have seen are not where the lower wage earning family will look to find an apartment to rent. That is one of the black market sources of income i talked about above, it's all done by word of mouth and who you know.

Yes to a certain degree you are right about taxi fares and the like, but it's not going to tell you much about the family income, just that it is probably going to be lower rather than higher!!

One thing that i found while living in China, was that if the person was proud of his job and/or had a decent income from that job, it was hard for them ''not'' to tell you what he was earning, ...actually boasting!! ...Now how true these boastings were ...is another matter!! ....haha!!!

David....