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Shanghai report: income vs. spending

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Shanghai is an expensive city. I’m not talking about the red hot housing market, we all know the housing is getting very expensive here. I was talking about the relative income vs. spending.

Income
Yesterday evening an old friend of mine, who works for a investment research firm, told me a fresh graduate is paid CNY 3,000. This is actully fairly high pay for new college graduate, cosidering financial is a hot area, and the fresh graduate is from Tsinghua/Bei Da (think that as MIT, or Harvard of China), with very good spoken English.

Experienced people are paid more. I learned from anothetr friend who is a HR executive, about 10% of people makes more than CNY 10,000 per month. Note this is also the threshold of income tax.

In the IT arena, I know some senior developer positions at MSFT pays more than 20,000 Yuan per month. I believe other multinational companies should have equivalent pay.

Spending
Many young professionals can not afford a house without getting their parents’ help. So they rent. The rent is not very high if converted to USD. But if the apartment is close to a metro station, such as Zhongshan park, it becomes more expensive. A one bedroom (studio) 10 minutes’ walking distance of Zhongshan park cost around CNY 1,300 to 2,000. The high rise near Zhongshan park is another story, it cost CNY 4,000 or above.

Food: a typical lunch, noodle, rice meal around Cloud 9 cost CNY 20 to 30. A dinner of 4 people cost around 200 to 300 in many restaurants inside Cloud 9. There are certainly more expensive options, such as the California seafood buffet, which cost CNY 208 per person. Don’t know the rate for kids. The price for McDonald, KFC, and Starbucks are about same as the US (just convert the money from USD to CNY).

The inflation is also here. Both the nearby Sheng Jian Bao place and the Barbi Bun place raised price a bit to absorb the rising pork cost. So as the Caijing Magzine, arguably the best financial magzine in China, raised price from 10 Yuan to 15. Well, that’s the price of a regular coffee at Starbucks, since I no longer drink coffee on daily basis, I can buy more magzines.

Caijing Magazine cover pic

2 replies on “Shanghai report: income vs. spending”

Two comments:

1. The threshold of income tax is not 10,000 YUAN, but 1,600 YUAN. This amount is after deducting the employee’s share of monthly social benefits contribution.

2. The supply of new grads is huge, therefore holding the salary down; but on the other hand, the supply of experienced technical or management staff is short, therefore pushing the salary up. If a new grad is smart and working hard, he can get 10,000-20,000 YUAN in 6-8 years by way of promotion or a few good job changes.

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