Funny figures: the costs of living - the WTO column

(soon at Chinabiz)

Making fun about Chinese figures and statistics is a longstanding tradition. Cooked or uncooked, they have filled up many columns in Western media. But when you put figures of Western sources next to each other, equally amazing things can happen.

A friend was kind enough to forward me an article of the New York Times magazine on Shanghai I had missed earlier this month. It tries to explain the miracle of Shanghai, where a household with an annual average of US$ 5,000 can still live like an American middle class family. “Chinese urban incomes approach the buying power of Americans making $12,500 a year,” says one researcher. “For working couples, that's the equal of $25,000. Do the math, and you can understand why Shanghai looks as prosperous as it does and why it seems like everyone is out shopping all the time.” So, you have to multiply it by five to get an US salary.
One explanation can also be that the average Shanghaise has more income than the official bean counters know – as I suggested in a previous column. What really makes a difference is that Shanghainese are rather prudent spenders and are not yes forced by their society to use all kind of services that do not really add to the value of their lives.
Shanghainese are not yet forced to use a car, and when banks or other service providers dare to charge fees for their services, the government has to take action to prevent a social uproar. Public transportation, food and cheap non-unionized labor from the poorer provinces do make life pretty affordable.

How then to explain an article that came to us through the French newswire AFP that quotes research of the HR-firm Mercer, telling us that Shanghai is as expensive as Tokyo and New York? “A 200-square-meter (2,152-square-feet) furnished house at prime locations for expats in the eastern metropolis Shanghai, for example, rents at 9,400 US dollars a month,” writes AFP. “This is higher than 7,500 dollars in New York. Annual tuition [in Shanghai] comes to 17,000 dollars for kindergartens, 18,000 dollars at primary schools and 19,000 dollars at middle schools -- higher than the average 15,000 dollars in Hong Kong and 17,000 dollars in Tokyo for all levels.” They forget that this is the basic fee, and international school are very good in adding all kind of other expensive services, like transportation, to this already very steep bill.
The AFP-correspondent in charge was obvious not talking about him- or herself since foreign correspondents adhere to a strict non-children policy, unless they have a wealthy partner or send their children to local schools. Newswires have changed into sweatshops that make look teaching English in China also financially a much more interesting business. Housing allowances and other compensations are features mostly our retired colleagues still can tell about.

I was going through all these figures while I was surfing the internet during the opening session of a business journalism course by Columbia University from New York and Fudan University at the Jinjiang Tower in Shanghai. For an eight-day course – mostly taught by my local colleagues – the students had to pay an amazing US $ 3,500. A large chunk of them were then not really journalists, but PR-people from American companies in China who are used to those fees and see it as a good investment to meet China’s finest business journalists – at least those who could afford it.
Much more than a clash of cultures, we will see a clash of economies and operating style, when the two systems try to meet each other. It is going to be brutal. And China will win.

Fons Tuinstra