Wednesday, Aug 23, 2017, 6:39 AM CST – China


How do Chinese people live?

So, the bottom line is that Beijing is an expensive place. This brings me to the question, “How do Chinese people live?”

After a year of being back, I’m starting to come out of my honeymoon phase with Beijing.

I no longer rave about fantastic manicures for 30 yuan (US$4.50) to friends in New York who still pay US$20, because I realize it cost me another 40 yuan (US$6) in roundtrip cab fare to get to and from the nail salon. And how do I value the forty minutes I spent inhaling exhaust fumes in gridlock traffic?

The bargain deals at the local markets have also lost their appeal because I’ve had to toss out batches of trendy articles of clothing that fell apart after a few washes and shoes with heels that needed to be re-glued after one season. Luckily, my signature “Ray-Ban” glasses are still holding up, but when the arms on these 15 yuan ( US$2.25) babies give out, I’ll probably replace them with a real pair. As they say, “yi fen qian yi fen huo,” “you get what you pay for.”

As I start to apartment hunt for new digs closer to the heart of town, I’m shocked at how expensive condominiums are and how quickly prices have risen. Like in Manhattan, living alone with modern amenities (I’m not even asking for a place with an oven) is out of reach for the average Beijing white-collar worker, much more so for its freelancing creatives (including yours truly). Six months ago, a friend was living in a posh studio near a popular upscale mall for 4500 yuan (US$660). When I checked out the building recently, real estate agents scoffed at the idea that I was looking for anything under 6500 yuan (UD$980).

“But, but, but there’s a global economic recovery under way and there are plenty of empty apartments idling in Beijing. “

“Too bad, sweetheart, this is China and asset bubbles are still all the rage.”

So, the bottom line is that Beijing is an expensive place. This brings me to the question, “How do Chinese people live?”

Stressfully, perhaps. From a policy perspective, we know the government keeps a constant hand on the gears, shifting up or down to balance between keeping housing prices affordable and maintaining economic growth. In the media and on the streets, we hear young people fretting over their (in)ability to fulfill the Chinese dream – owning a home of their own. Last week, I was invited to host a talk show on Youmi, a popular Chinese online broadcaster. While viewers certainly tuned in for the topic I was addressing (study abroad), the audience numbers my show garnered were (naturally) but a fraction of the 150,000 viewers who tuned in to hear Ren Zhiqiang, a real estate tycoon, opine about housing prices the week before.

Aside from housing, which is a major life expenditure in markets outside of Beijing and outside of China, even food is unexpectedly expensive here. A meal for two average office workers on a week night date could easily cost $10 at a fast food restaurant. Compare that to the $20 it would cost in, say, New York. The ratios are out of whack. The CIA’s official estimate for per capita GDP in the US (in purchasing power parity terms) is about 7.5 times more than that of China’s, so how do Chinese people live when they make one-seventh of what an American makes, but their meal out costs one-half of what an American meal costs?

The question becomes even more muddled in my mind when I try to reconcile the low income figures – an average office worker with a “decent” job in Beijing probably makes somewhere between 5000 yuan to 8000 yuan (US$750 - 1200) a month – with the rampant consumption I see around me. (A friend who works as an anchorwoman for a well-known television station confirmed these numbers for me, adding that even celebrity presenters are in fact “very poor” based on their salary). From the high-end of bling-bling orange Lamborghini race cars zipping around town (maybe there’s only one, but I keep seeing it around) to white-collar Chinese spending 1 percent of their monthly income on a single cocktail at a yuppie watering hole, the consumption seems completely out of touch with the income.

Part of the puzzle lies in the “face value” of having the appropriate “paichang” (“set up”) to get people to take you seriously. To get business done in China, people believe you need to spring for the necessary expenses, like lavish dinners and the right hardware on wheels.

But the bigger part of the answer, I believe, lies in the “grey.” From school teachers moonlighting as private tutors to office workers earning other “waikuai” (“outside income”), everyone in China seems to have more than one paying gig. And some of it may not be dutifully accounted for. A new report by a National Bureau of Statistics (NBS) analyst estimated the real per capita GDP in China to be about twice the level officially estimated by the NBS in 2008.

Perhaps it’s that other fifty percent that is helping Chinese people live in pricey environment. If that is the case, someone tell me how I get a piece of that “waikuai”!


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