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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
Status: Offline
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 Posted:
Mar 15, 2007 - 12:52 PM |
 
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| Post subject: What is the cost of living in SH compared to USA? |
This does not stand up to Statistical data or if you apply different kind of lifestyle. I only picked couple everyday items.
My main point in this article is that the STUFF here is very expensive in relationship with local income.
I have been living in SH for the past year now after college and I want to make an comparison between the cost of living here and USA. These figures are not exact figures, just an near estimate from what I have seen.
I know 1 US = 7.7RMB but if we compare income its 1 to 1
Average middle class Shanghainese income 5,000 rmb
Average middle class American income US 5,000 us
so its 1 : 1
The upper Middle class shanghai people here makes 15K-30K. plus wife, 5k-10k = 20k-40K / month
The upper Middle class American Makes 5k -10k, plus wife, 5k-10k. = 10k -20k / month
As you can see upper middle class Americans make less 50% less than upper middle class Shanghainese. On top of that American pays much more tax, 8.25% on all items and higher income Tax.
BUT!! China cost of living is much higher
1 Bottle of Shampoo in Shanghai cost 30 rmb | 1 Bottle of Shampoo in US cost 3 US
1 LG Cell phone 2500rmb | 1LG cellphone 250US
2 people dining out 200rmb | 2 people dining out 30 us
1 Cup of Starbucks 30rmb | 1 Cup of Starbucks 3 us
1 Honda Civic 160,000rmb | 1 Honda Civic 16,000 us
1 Canon Digial Camera 2000rmb | 1 Canon Digial Camera 200us
As we can see china cost is 10x higher!!! But there are cheap places too. You can buy a take out for 10rmb a meal too. but its hard to go to the cheap places when there are soo many shopping malls and good restaurants.
On the contrast, Housing ratio compared to US is again 1:1
Comparing apples to apples
Rent 2 bedroom apt in shanghai = 2000
Rent 2 bedrom apt in New York = 2000
Buy apartment in New yourk 1.2 million 2 bed apt
Buy apartment in Shanghai 1.2 million 2 bed apt
So in conclusion, The income and housing ratio between US and China are 1:1, The upper middle class Chinese makes 50% more money than Americans, but the cost of living in China is 7-10x higher, which is also balanced out a little bit by the higher tax in America. Chinese people are better off if they choose to not by the imported stuff and buy only domestic brands. But thats almost near impossible. Local shanghainese make 2x more money than American, but overall they are worst off if they buy foreign brands, he/she will be paying 10x more than the average American.
Food for thought
James |
Last edited by saleenr6 on Mar 16, 2007 - 10:52 AM; edited 2 times in total |
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sinned69
SuperStar
Joined: Sep 01, 2004
Posts: 1511
Location: China, Middle East, Asia Pacific
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Mar 15, 2007 - 01:12 PM |
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sorry i disagree, your assumptions are quite off... a majority of chinese do not buy imported products, a majority of the time as you might suggest or think, in fact they shop buying good well known and recognised domestic brands way below the costs you associate in your argument. sure some chinese (in the minority) buy some products that are international brands or imported, though these are usually for the big ticket items, like major electronics or automotive purchases etc.
they dont usually as a rule go and buy the imported brand grocery products at the grocery store as you seem to allude to.
while they may at times splash out on the restaurant meals, there are plenty who make do for far far less, or simply eat at home. something you miss completely is all the hidden income that chinese make, thats not taxed... or forms part of their known salary/wages...
don;t know how close you have gotten to average chinese, but it don't sound like you have that much of a handle on what really goes on. shanghai is also not representative in the slightest of what is the real situation or real china. |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 01:13 PM |
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| Quote: |
Average middle class Shanghainese income 5,000 rmb
Average middle class American income US 5,000 us
so its 1 : 1
The Higher upper class shanghai people here makes 15K-30K. plus wife, 5k-10k = 20k-40K / month
The upper Middle class American Makes 5k -10k, plus wife, 5k-10k. = 10k -20k / month
As you can see upper middle class Americans make less 50% less than upper middle class Shanghainese. On top of that American pays much more tax, 8.25% on all items and higher income Tax.
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RMB5000 per month is roughly USD600
which places your calculations of the average US salary of USD5000 at RMB38000 per month
40000rmb per month is USD4800
USD20000 per month is RMB154000
(unless you were citing in USD throughout)
however the problem will then be that the "upper middle class american" estimates are extraordinarily low. i know of no one who would consider themselves upper middle class with a salary of USD120000.
unless you are indeed comparing the "higher upper class" and the "upper middle class" which are two different things. |
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mswp
Rocker
Joined: Mar 06, 2005
Posts: 725
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Mar 15, 2007 - 01:44 PM |
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Neat idea, but I agree with the others that your assumptions are way off. I just checked the last census figures available, and median (not average) american income was 43,000 anually. Which is not enough for one, let alone a family to live comfortably on in a major city.
If you want to compare apples and apples
1) compare Shanghai and NYC or other major US city which has a higher per capital income then some rural farm town in the midwest
2) factor in the following:
- American families have additional expense of multiple children
- day care cost - here there are grandparents and inexpensive ayis
- healthcare - insurance is huge cost in US, but saving for a disaster is more common - there's no trustworthy safetynet, or at least an American style delusion of a safety net
- transportation - here you could get back and forth to work on 200rmb, my sister spends more than $200 just in gas
- sales tax isn't on everything, and it isn't 8.25% everywhere
Instead of saying a dollar earned and a RMB earned have the equivalent value, why don't you look at costs as a percentage of total income. That is, x% spent on income tax, y% on mortage/rent, z% food, etc.
As for the undeclared income - I don't know how you measure that - but you have to adjust for it somehow to make an accurate representation. |
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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
Status: Offline
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Mar 15, 2007 - 02:46 PM |
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| Quote: |
- American families have additional expense of multiple children
- day care cost - here there are grandparents and inexpensive ayis
- healthcare - insurance is huge cost in US, but saving for a disaster is more common - there's no trustworthy safetynet, or at least an American style delusion of a safety net
- transportation - here you could get back and forth to work on 200rmb, my sister spends more than $200 just in gas
- sales tax isn't on everything, and it isn't 8.25% everywhere
Instead of saying a dollar earned and a RMB earned have the equivalent value, why don't you look at costs as a percentage of total income. That is, x% spent on income tax, y% on mortage/rent, z% food, etc.
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I know americans have a lot of expenses, I have lived there all my life. but thats a whole other argument when you calculate out every single expense. I just think that tax and mortage around about 1 to 1 ratio, and food depends on what you eat, could be a 10rmb meal, could be a 100rmb meal. both very reasonable.
| Quote: |
RMB5000 per month is roughly USD600
which places your calculations of the average US salary of USD5000 at RMB38000 per month
40000rmb per month is USD4800
USD20000 per month is RMB154000
(unless you were citing in USD throughout)
however the problem will then be that the "upper middle class american" estimates are extraordinarily low. i know of no one who would consider themselves upper middle class with a salary of USD120000.
unless you are indeed comparing the "higher upper class" and the "upper middle class" which are two different things. |
I read your response 3x, i can't understand why your why you keep muliplying things back and forth. All im trying to say is that the amount is the same, forget the exchange rate.
Also 120,000 USD/year is not Upper middle class? Comon, some one back up on on this. And where did you get that figure?
I agree with sinned69 that majority dont' buy the expensive stuff, but i was refering to the upper middle class. This is also just from my observations, people here are not cheap, they buy 500rmb shoes and jackets like nothing. if you look at an average department stores like Pacific mall, 2,000rmb for a jacket or suit is very normal. and people do shell out.
Im saying is that normal everyday stuff is really expensive for a local Income. Thats it. |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 02:58 PM |
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While I can understand your 1:1 ratio is the same, provided the numbers are correct; the actual amounts are far different when compared on equal ground. RMB5000/month is not the same as USD5000 per month. If converted to USD, the amounts are USD600 to USD5000. Or RMB5000 to RMB38000. You lost me with the upper middle class bit...
BTW... nice edit to remove the original difference between "higher upper class" and "upper middle class". Serves me right for not quoting.
USD120000 per year is upper middle class? No way. Between mortgage, savings, college funds, daily expenses, cars, insurance... that number is very far removed from upper middle class. Welcome to inflation. |
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lancesidecar
FooJay
Joined: Jan 07, 2005
Posts: 1631
Location: Hitsville, PRC
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Mar 15, 2007 - 03:12 PM |
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Mags does have a point. However, I think class levels in the US, Europe, and other parts of the world aren't necessarily based on what you earn. That's a different thread though. |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:20 PM |
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Class and socioeconomic class are indeed two different entities. |
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hammerforlife
Fire-eater
Joined: May 24, 2004
Posts: 2701
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Mar 15, 2007 - 03:24 PM |
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This thread started off unnecessarily complicated by trying to compare prices in China in RMB to prices in the US in USD. Saying that the cost of living in Shanghai can be the same as the US if the Shangha accomodation is 3,000 RMB compared with 3,000 USD for example in the US is meaningless. Exchange rates are arbitary. By that measure you would say it is 4 times the price for the average Thai local to live than the average Chinese local.
Its the same as my colleague saying that UK people are rich as the exchange rate is 1:14. Exchange rates are irrelevent to the cost of living. |
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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
Status: Offline
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Mar 15, 2007 - 03:29 PM |
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magnolia, your still not understanding me. If you understand my ratio of 1:1 then you would know that the currency does not matter. a number 5000 is just a number 5000. no need to apply currency. I know the numbers will be different when you apply the exchange rate, Thats why I stated "I know 1 US = 7.7RMB" But my point is to show the ratio, and ignore the currency, just look at the number 5000 as the average income for both US and Shanghainese middle class
5000:5000 = 1 : 1 Ratio
You really hate me don't you?  |
Last edited by saleenr6 on Mar 15, 2007 - 03:35 PM; edited 1 time in total |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:33 PM |
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| Magnolia wrote: |
Serves me right for not quoting.
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oops! i did quote.
hammerforlife simplified and verbalized what i was trying to say.
similar to the old "twice as hot" discussion; what is really twice as hot (weather-wise), 10C to 20C or 10F to 20F? both. |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:35 PM |
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| saleenr6 wrote: |
magnolia, your still not understanding me. If you understand my ratio of 1:1 then you would know that the currency does not matter. a number 5000 is just a number 5000. no need to apply currency. I know the numbers will be different when you apply the exchange rate, Thats why I stated "I know 1 US = 7.7RMB" But my point is to show the ratio, and ignore the currency, just look at the number 5000 as the average income for both US and Shanghainese middle class
5000:5000 = 1 : 1 Ratio
You really hate me don't you? |
nah!!!! of course i don't hate you!
i can see what you are saying, but it just doesn't work the same way... there are too many other variables which skew the outcome. |
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Michael
Moderator
Joined: Mar 22, 2002
Posts: 5288
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Mar 15, 2007 - 03:37 PM |
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I understand the premise of a one to one USD- RMb comparision.. in terms of buying power, but I also think it some of the other assumptions are faulty. Even then I don't think its a direct 1 to 1 corelation. It was not too long ago that I read something that indicated that .. citywide, the average income was around 2000 RMB a month.
In the price comparison, there really is not enough real data behind the suppositions. It was pointed out that most locals do not buy expensive food or cosmetics. Most do not go to Starbucks. Most do not have a computer or a digital camera. Most definitely do not have car or even use a taxi.
But one of the big problems for me with this logic was that it does not take into consideration the possibilities for living cheaply and living well here. In the US, I did not have an option NOT to pay less than 700-900 rent for a decent apartment ( most are a lot more) , NOT to have car ( absolutely had to have it ) and taxi are out of the question. In Shanghai, there are amazing options for living space, transportation, and good eating at amazingly cheap prices. Overall, it is quite possible and not that difficult to live well for much cheaper than the US. Of course, there are always those who will pay more and in a city this size, there is room for that. |
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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
Status: Offline
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Mar 15, 2007 - 03:38 PM |
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If you take away the C and F , 10 is just 10. I could be hot as hell or cold as ice. Everything is Relative
I love you too
every post i've ever made on here i think you flammed it. hahaha.
should meet sometime in person. |
Last edited by saleenr6 on Mar 15, 2007 - 03:41 PM; edited 1 time in total |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:40 PM |
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ahhh... that would be the assumption... but when actually comparing the temps (converted to C and F) there is a vast difference. but that is soooooo not on this topic... |
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hammerforlife
Fire-eater
Joined: May 24, 2004
Posts: 2701
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Mar 15, 2007 - 03:50 PM |
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| Magnolia wrote: |
| similar to the old "twice as hot" discussion; what is really twice as hot (weather-wise), 10C to 20C or 10F to 20F? both. |
10C to 20C = 3.5% increase in absolute temperature
10F to 20F = 2.1% increase
Sorry, way way of topic  |
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:53 PM |
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my apologies for flaming... it isn't intentional!
next time i am in shangers we can flame in public!
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Magnolia
Board Biatch
Joined: June 01, 2004
Posts: 31081
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Mar 15, 2007 - 03:55 PM |
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| hammerforlife wrote: |
| Magnolia wrote: |
| similar to the old "twice as hot" discussion; what is really twice as hot (weather-wise), 10C to 20C or 10F to 20F? both. |
10C to 20C = 3.5% increase in absolute temperature
10F to 20F = 2.1% increase
Sorry, way way of topic |
kelvin was the answer we came up with also!
... but we were too dumb to figure out the differences!
yay!!!!
am now going to have to find a way to work this new-found knowledge into the next dinner... |
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guel27
Board Royalty
Joined: Oct 10, 2005
Posts: 7470
Location: iwahig
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Mar 15, 2007 - 04:47 PM |
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i havent been to US but i disagree with you saleenr6 |
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Stark
Barker
Joined: Mar 19, 2006
Posts: 169
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Mar 15, 2007 - 05:59 PM |
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Wow what a strange little comparison. Everything here is based on the premise that a dollar in America is worth the same as an rmb in China. So a person making 5,000 rmb a month has the same buying power as a person in America making 5,000 dollars a month. Obviously this is ridiculous. Both can survive, yes . . . . can afford rent (though the Chinese person probably can't afford a very nice apartment, let's say they spend 1,000 rmb on rent . . . . guaranteed that that apartment pales in comparison to the American that spends 1,000 dollars.
Both can eat, that is true, with quite a lot of tasty Chinese costing 10 rmb or less. Possibly this is the only valid comparison - food is cheap and delicious, though you are forced to just eat Chinese, while the American could choose their cuisine.
But where the comparison truly falls apart is when we factor in any 'extra' purchases like cars, cameras, computers, airplane tickets - someone on 5,000 rmb a month couldn't come close to affording what someone on America's 5,000 dollars a month could - Chinese brand or not. A Chinese-made automobile still costs at the very least a few thousands US dollars - well outside the reach of someone making 650$ US a month.
I think you could perhaps extend your initial reasoning of 1:1 to food . . . . but really nothing else. , and only under very strict conditions. |
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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
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Mar 15, 2007 - 06:02 PM |
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No problem, you don't need to agree. its nothing statistical, its all just my own observational opinion from what I've felt. Im just one little person in the millions. There soo many sides of shanghai, who knows. Income level is so different, Im at the stop light at theres people pushing bicycles on my right, and theres the 911 Turbo to my left. go figure |
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Michael
Moderator
Joined: Mar 22, 2002
Posts: 5288
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Mar 15, 2007 - 06:51 PM |
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Don't worry saleen. You are in good company. All the big studies on cost of living in Shanghai compared to other cities make comparison indicating Shanghai is a very expensive city. Certainly it is compared to other Chinese cities.
Check http://www.finfacts.ie/costofliving.htm
How ever they compare certain specific things that are apple to apple comparisons in each city. But they also do not take into account that there are options for good living cheap in Shanghai that may not be available in other large cities. Of course single family homes ( villas ) are very expensive here - but you can also find a decent apartment for USD $500 a month ( at least for the moment ) . Sure owning a car is very expensive here ( 40000RMB for tags ) but taxis and subways are incredibly cheap. |
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georgeshen
Raver
Joined: Apr 30, 2006
Posts: 451
Location: Boston, Shanghai
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Mar 15, 2007 - 07:01 PM |
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I would agree with Saleenr6's simplified and interesting 1:1 theory. In fact, that's actually what my father in China has been telling me. I am in Boston with my family, wife and 3 kids. We can live comfortably on my USD$170K annual income. It's more like making RMB$170K in China, I believe. Of course, I mean a moderate but comfortable life style as a local.
We would probably agree on one thing - it's more costly to maintain the same life style in China than in USA. I thought about working in Shanghai for $700K RMB at one point but only figured I won't be able to maintain the kind of life style I have here for my family. I have a friend who did move back and work in Shanghai on a 2 year contract. He keeps his USA salary (about the same as mine) and on top of it, his company gives him housing and transportation allowance. So in reality, with the perks and expat tax break, he is doing pretty good. My advice to my friends is never take a big pay-cut to work in Shanghai. |
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yu888
Board Deity
Joined: Jan 25, 2003
Posts: 18037
Location: ZhongShanParkArea SH
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Mar 15, 2007 - 07:31 PM |
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Andf my advice would be to consider your current career and lifestyle bfore deciding not to take a paycut to come to Shanghai. Each person is looking forsomething different and for som, taking a pay cut will garner much better possibilities for one's career, either in terms of growth in responsibility ad expreience or purely in personal satisfaction of doing things that are enjoyable...not to mention for certain people, a very different glass ceiling situation.
As for the 1:1 ratio, its definitely a very simple model based on very simple observations, but after reading the initial post and seeing this:
| Quote: |
| I have been living in SH for the past year now after college |
it kind of makes sense where Saleen's perspective is coming from.
For many who are already making more money, or have a set lifestyle,or are simple older and have more expereince than a year out of school (which i envy greatly to be in that position), it does not make any sense. For example, my mortgage of 10,530rmb for a 3b2bth apt here, does not equate to the level of housing i get for 10,530 USD a month (my house there is only 1600USD a month actually and it comes with a large yard) So no 1;1 there.
Marginal utilities are just way off in the varying catagories so unless one does an analysis of average lifestyle here versus one in say, the US, there is no way to get a proper cost of living figure, and no way does it come to 1:1. |
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ThomasCaron
Raver
Joined: Dec 11, 2006
Posts: 472
Location: Shanghai
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Mar 15, 2007 - 09:50 PM |
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I live in Concord, Massachusetts, which is as expensive to live in as New York City, where I resided for 30 years. In August I'm relocating to Shanghai, where I will work fewer hours, earn less - and live very comfortably. However the currency compares, that's a fact. |
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