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

sex - The only thing we seem to talk about... 

"Sex has become one of the most popular topics for public discussion," writes the official exhibition site of the Adult Expo for the sex toy. Indeed, it is always on our minds. Thanks for the heads up, Danwei).  Just see the cute pic, that would even survive the People's war against pornography.
Very hard to deal with all the cliches the outside world still has about China and this seems a powerful tool to smash some. Next month in Shanghai.

economy - The real costs of living in Shanghai

Very funny to read in this AFP-report that the HR-company Mercer has found out that the costs of living of expats in Shanghai have now outranked even Tokyo and New York.
"Conducted by the US-based Mercer Human Resource Consulting firm, the survey says the cost of apartments and tuition for children in China's expat hubs was even more expensive than cities like New York and Tokyo," writes AFP. "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."
The report mainly proves that when you play you cards right you can spend a hell of a lot of money here in Shanghai. That is why the real expats have become part of a dying breed. For example I would be quite sure that both the AFP correspondents in Beijing and Shanghai do not have the budget that would allow them such a living style.
Yes, the people from Mercer would most likely have this kind of houses and can afford children that do not attend the local schools, but that is why their reports are so expensive.

internet - Please note that my RSS feed has changed
 
Those who have survived to my RSS-feed might have noticed that it stopped working a week ago. Feedster has made the feed a bit simpler, but it requires that you again subscribe to the feed (see the top-right corner).
Here is some info if you wonder what a RSS-feed actually is.

economy - No signs of overheating - Stiglitz

China's is showing no signs of overheating, economist and 2002 Nobel price winner Joseph Stiglitz said today in Shanghai. Trade deficit, inflation and tightness at the labor markets are three signs for overheating that have not a worrying level in China, Stiglitz said.
"Deflation has changed in the past year into a slight inflation, it should be monitored but is no reason for worry," Stiglitz said. The same goes for the labor supply and the trade deficit, that has changed from a trade surplus into a deficit, but is also not of a dangerous level.
Stiglitz: "China has the potential of rapid growth and needs to grow very fast to absorp its labor resources."
China is exploring new waters, the economist said, no other country had seen such a long period of economic growth on such a high level.
China has to develop a strategy for environmentally sustainable development, Stiglitz added, who appealed on the US to do more to make China more energy-efficient.

blogger - From the Fudan-Columbia journalism training
 
It started as a joke this morning, when I asked the staff of the Jinjiang Tower whether I could get online, but now I'm blogging from the opening session of the Fudan and Columbia media and finance training program where Joseph Stiglitz will speak in a minute.
Unfortunately, otherwise very little to blog about. The executive training program is a first, costing 28,000 Renminbi (3,500 USD) for an eight-day session with many of my colleagues. Many media organizations thought this was too expensive, expecially since mostly locals teach them here. Stiglitz should of course be an exception.
Very interesting people from the Shanghai media: the people who are in the middle of the transition process.

Internet - Number of internet users soars to 87 million
 
The number of internet users went up 25 percent over the past year to 87 million at the end of June, the CNNIC disclosed yesterday. The China Internet Network Information Center conducts this survey every six months.
The number of broadband users went even up more dramatically as now 31 million users surf the wave, a rise of 217 percent over the past year.
Entertainment is becoming a more important reasons for the internet users to go online, compared to the quest for information in the past, when the users were more male-dominated IT-nerd, compared to today.
Almost 45 percent of the internet users is now female, CNNIC found out. On top of the 60 percent is single, making match making a very powerful business opportunity. Of the users 55 percent is younger than 24 years, a drop in the age of internet users that has gone on for several years.

culture - One country, two systems...
 
But then neatly summerized for the United States. Have fun.
(indeed, very much unfocused).

landing - Growing, but how and how much?
 
Today the Financial Times tries to make sense out of a report of Goldman Sachs on the discussion of the growth rates in China. It only makes one thing clear: nobody is sure.

Internet – the People’s war against porn

 

When in China the government declares something a “People’s” war it is time to pay attention. So many other governmental priorities come and go, but a people’s war mean serious business.

Compared to other countries that try to censor the internet – like the Saudi’s – pornography has never been very high on China’s list of potential evils, also the Berkman Center for Internet and Society discovered last year. Governmental action in China concentrated on more political dissent, Falun Gong and social unrest. That is changing now, as the online porn industry proved to be a rather profitable one, more than any other online business. On top of that, the Chinese online population has pornography higher on its agenda than any other official concern.

A specially set up website by the government in June got in three days time almost 5,000 complaints, most of then complaining about pornography. That has caused a policy change and the Shanghai police announced on Monday they had in a ten-day campaign already confiscated 170 servers and arrested 42 people. Nationwide 500 websites have been closed.

 

Energy – Long Yongtu denies crisis

 

Former chief negotiator of China accession into the WTO Long Yongtu has brushed aside the idea of an upcoming energy crisis, triggered off by China fast economic growth and its inefficient way of dealing with energy. Economist Wu Jinglian warned only a few weeks ago that China’s economic growth would be unsustainable unless it would improve the way it is uses its energy now.

Long Yongtu noted that the energy resources are far from being sparse, let alone modern science and technology are promoting new types of energy resources, on Saturday in Teheran, according to state-news agency Xinhua.