With price hikes, Chinese begin number crunching: What can you buy with 100 yuan?

November 10, 2010Jing Gao4 Comments, , , , ,

Original posts in Chinese: 1 2 3 4
China’s National Development and Reform Committee released the result of October’s consumer price monitoring in 36 cities nationwide. 80% of commodities are more expensive than in September. Talks about making ends meet come at a time when Chinese suddenly find their meals cost more, while their salaries remain frozen.

What can you buy with 100 yuan (US$15) this November?

50 kilos (110 lbs) of flour

15.5 liters of #93 gas (equivalent of 4.1 gallons of U.S. #87)

3 liters (0.8 gallon) of premium milk

Two and a half movie tickets

5.5 kilos (12 lbs) of pork ribs

Half a month of cellphone charge for an average person

One hair treatment

Internet service for one month

A meal for three at McDonald's or KFC

5 liters (1.32 gallons) of cooking oil

one hour for a mid-sized private room at a karaoke bar

Two to three authorized CDs

A T-shirt in a supermarket

15 kilos (27 lbs) of premium rice

Half a hairy crab

A jar of domestic baby formula

One month of property management fee on average (enforced)

A pair of canvas shoes on sale

Engel coefficient

It’s a concept taught in college textbooks. China’s grassroots have familiarized themselves with it after they grow more budget-conscious than ever. The majority of users on one online forum said that compared to last year, the Engel coefficients of their families become higher this year.
How to do the math? Engel coefficient = Expenditure on food products ÷ Total household expenditure × 100% (Jing Gao’s note: It actually should be Expenditure on food products ÷ Total household income × 100%). The statistic is used as a reflection of living standard. The lower a family’s income, the greater is the proportion of it spent on food. Engel coefficient being above 59% is a sign of poverty, according to the standard used by Food and Agriculture Organization of  the United Nations. More than half of the net users who participated in the discussion said they are under the poverty line.
Egg or no egg, it is a huge decision.
Chen Ji, a retire mechanic living in Beijing, is crunching numbers all the time. He became blind at the age of 54 because of viral keratitis, so he has to hire a caretaker. Last year, his pension was raised to 1300 yuan (US$200)  per month. He also gets subsidies from his community. He pays the caretaker 500 yuan per month. He suffers constantly from low blood pressure and vertigo, which adds to his medical expenses. His utility bills and telephone fee average out to 200 yuan every month. That is to say, including expenses on food, he only has 600 yuan at disposal, lower than the 800 yuan bottom line set by Beijing.
He tries his very best to slash his cost. “I usually have noodles for meals. A splash of oil and a pinch of salt will do. Or instant noodles and quick-frozen dumplings with pickles and preserved tofu. That can tide me over,” Chen said.
However, the escalating consumer prices in Beijing since this August have forced Chen to cut his meals to two per day. “One less meal. No biggie.”
When price of egg climbed to eight yuan per kilo (US$0.54/pound), he once decided to quit his habit of two eggs a day. Finally, he picked it up, “After I did some rough calculation, it turns out that eggs are actually the cheapest.”
Secrets of grocery shopping
Netizens have come up with countermeasures to deal with food price increase and generously shared online with fellow shoppers.
User “mimi”: Prices of vegetables vary with time. For example, in most farmers’ markets vegetables are cheaper in the afternoon than in the morning. You can save a lot dough by avoiding the peak hour. On sunny and agreeable days, they are cheaper than on rainy or snowy days when transportation is difficult. So check the weather report before go grocery shopping.
User “daniu”: Prices of many vegetables more than double when the winter comes, for example, Chinese cabbage. I would see vegetables as equities, and stock up those that are going up.
An electronic booklet titled A Guide for Food Slaves to Cost-saving has been widely circulated on the Web and become extremely popular for resonating with the public. Young people said that after becoming “house slaves” and “credit card slaves,” they have once again fallen victims to the economy.
Egg cakes thinner, and soy milk more watery.
Breakfast costs more. Egg cake has risen from 1.5 yuan to 2, and has shrunk to one dough with one egg and less ham. Soy milk, now so adulterated that you can taste water, has risen from 1 yuan per bag to 1.5. I used to buy five veggie steamed buns for 2 yuan. Now I can only get four for the same amount.
“This year’s cost has increased by 30% from last year. We have no choice but to increase prices and offer smaller portions,” said one restaurateur in Beijing, “But customers are not happy with it. Fewer people come. In the past few years we saw full house at dinner time in this season. Now, we would feel lucky if only 70% of seats are taken.”
Shopaholic housewives from Shenzhen to Hong Kong
Hong Kong is known as a shopping paradise. But its allure for mainland Chinese was only limited to foreign merchandises on which mainland China slaps a heavy tariff. Upon arrival in China, visitors from Hong Kong and developed countries usually couldn’t help but yell, “Everything here is so Cheap.” This is no longer the case. More people find that cost of living in China’s first- and second-tier cities is comparable to that in other parts of the world, or even higher, if you count buying a piece of real estate.
Housewives have found out that the list of things that are cheaper in Hong Kong than in the neighboring city Shenzhen runs the gamut from salt and apple to toilet paper and band-aid. It’s worth the gas price if you shop a lot at a time.

Netizens speculate on the cause for inflation
On the internet, people have different takes on the issue. Some say that reduction in farmland on the outskirts of Beijing is one factor. Produce has to be transported from afar, which increases the cost.

Jiang Yuan’s view has been seconded by most people. He believes the depreciation of the U.S. dollar has triggered the rise of raw materials, crude oil, agricultural products and other staple goods on the global market, which leads to the rise of food commodity prices.

“There must be profiteers at large making waves. Prices of some vegetables whizzed up, while the demand and supply haven’t changed much. It’s even crazier than the stock market. It is absolutely fishy,” many internet users call for government intervention to crack down on profiteering and stabilize the commodity prices.

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4 comments to “With price hikes, Chinese begin number crunching: What can you buy with 100 yuan?”

  1. Nick | November 11, 2010 | Permalink Reply

    Great article with universally relatable real world examples!

    • Jing Gao | November 15, 2010 | Permalink Reply

      Thank you for your comment. Hope this helps!

  2. Bill Rich | November 12, 2010 | Permalink Reply

    So flour, rice, gas, property management and pork are cheaper over there, and the rest are cheaper in N. America. Especially milk. I pay $4.00 for 4 liters. Made in China T shirts are $9.00 each here.

    • Jing Gao | November 15, 2010 | Permalink Reply

      Hi, thank you for your comment. Yes, there are still things cheaper in China. But considering China is known to the world for its cheap labor, sweatshop, and low per capita income, the fact that prices of some services and commodities in China are comparable to or even higher than in the U.S. is astounding…

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