China Diary, 1988: Cheap Rent, Expensive Food

In 1987–88, the Far Outliers, with their two-year-old daughter in tow, spent a year teaching English at a new community college in Zhongshan City, Guangdong Province, China. The following is one of a series of articles I wrote in 1988. I sent them to a Honolulu newspaper, but they were not interested. So now I offer them as a retrospective on coastal China twenty years before hosting its first Olympics. At the same time, I am scanning in a lot of our old China photos and uploading them to my Flickr account or to my WordPress blog to illustrate this series.

How would you like to spend only ten dollars a month for rent? The only catch is that you have to move to Zhongshan City, Guangdong Province, China, and work at a local company for local wages.

Rent in Zhongshan looks good no matter how you figure it, but comparing the cost of living there with the same in Honolulu is still a bit tricky.

If you convert a Honolulu income of $2,000 per month to Chinese currency at the official rate of 3.7 yuan to the dollar, you would have more money to spend in a month than most people there make in a year. At the blackmarket rate of exchange, you would have twice that much. A couple who wanted to retire in Honolulu and live on their Zhongshan pension of 500 yuan per month would find first that they could not legally convert their yuan to “hard” currency at the official rate. If they then exchanged it on the blackmarket, they would end up with little more than $60 a month to live on.

But of course most people in Zhongshan earn Zhongshan wages and most people in Honolulu earn Honolulu wages. We need to match prices and wages in each place. So let’s compare fairly average working couples with one preschool-age child. Both couples are full-time teachers. Each month, Mr. and Mrs. Zhang in Zhongshan receive 500 yuan between them, if you average in the periodic bonuses they receive. Mr. and Mrs. Hara in Honolulu bring home $2,000 after taxes, union dues, and so forth.

A typical monthly wage in other parts of China would be about 100 yuan. Prices are also lower, as are the choices of goods available.

Public housing, Xian, ChinaEach month the Haras turn over $600, nearly one-third of their take-home pay, to their landlord, Mr. Chong, Zhang’s uncle. The Zhangs’ work unit—their college—provides them housing, but charges them 10 yuan each month for rent, 2 percent of their income. Gas, water, and electricity cost the Zhangs about 30 yuan (6 percent of their income). The Haras pay $40 a month (2 percent) for utilities.

The Zhangs are very lucky to have a telephone. It costs them about 25 yuan per month (5 percent of their income). They pay by the minute even for local calls. One time Zhang called his uncle in Hawaii and talked 10 minutes, at 12 yuan per minute. He’ll wait for his uncle to call him next time. The Haras pay $25 a month for their phone (1.25 percent). They rarely call the mainland but do call the neighbor islands occasionally.

New home, Shiqi, Zhongshan City, GuangdongThe Zhangs pay about 40 yuan per month (8 percent of their income) for full-time daycare for their 3-year-old. That includes breakfast and lunch six days a week and occasional doses of medicine. The Haras pay $300 a month (15 percent), to a private daycare center. That includes lunch and snacks.

Since their work unit furnishes their house, the Zhangs live close to work and pay little for transportation. They own two bicycles. Mrs. Zhang bought hers for 170 yuan (34 percent of their monthly paycheck). The Haras owe one more year of car payments at $170 a month (8.5 percent of their combined net), on the car they bought three years ago. They alternate chauffeuring.

Both the Zhangs and the Haras keep in touch with their relatives by mail. It costs the Zhangs one yuan (0.20 percent of their monthly income) to send ten airmail letters within China. But it costs them 20 yuan (4.0 percent) to send ten airmail letters abroad.

The Haras, by contrast, pay $4.50 (0.225 percent of their monthly net) to send ten airmail letters to Japan. It costs them $2.50 (0.12 percent) to send ten letters to the mainland.

The Zhangs recently made photocopies of family documents to help a relative emigrate. They paid 2.50 yuan for ten pages (0.50 percent of their income that month).

The last time the Haras photocopied ten pages, they paid 50 cents (0.025 percent).
The Zhangs spend about 40 percent of their income on food, 200 yuan per month. The Haras spend about 20 percent of their net on food, $400 per month.

Both couples eat a lot of rice, the Zhangs 50 lbs. a month, the Haras 25 lbs. Each 25-lb. purchase costs the Zhangs 12.50 yuan (2.50 percent), and the Haras $5.00 (0.25 percent). The Zhangs could buy government-ration rice through the state store but the quality is much worse. So they cash in their ration and use the money to offset the cost of the better rice they buy on the private market.

Official fruiterer, Shiqi, Zhongshan City, GuangdongThe Zhangs eat much less meat than the Haras. They pay about 4.50 yuan per pound for pork (0.90 percent of their monthly income), 3.50 per pound for chicken (0.70 percent), and 3.00 yuan for a 12-ounce can of luncheon meat (0.60 percent). The Haras pay about $2.70 per pound for chop suey pork (0.14 percent), 99 cents per pound for chicken (0.05 percent), and $1.30 for a 12-ounce can of luncheon meat (0.07 percent).

Produce such as bananas, bean sprouts, cauliflower, celery and tomatoes cost between .40 and 60 yuan per pound in Zhongshan, 0.07 to 0.12 percent of the Zhangs’ monthly income. Similar produce in Honolulu ranges from 39 to 99 cents per pound, 0.02 to 0.05 percent of the Haras’ monthly net.

Sundries store, Shiqi, Zhongshan City, GuangdongIn proportion to typical local incomes, then, rice and meat cost ten times more in Zhongshan than in Honolulu. But fruits and vegetables only cost two to three times more. Of course, the Zhangs are able to spend much more of their money on food because they spend less than one-tenth as much on rent.

Imported food is outlandishly expensive in Zhongshan. A six-ounce jar of instant coffee costs the Zhangs 20 yuan, two months’ rent (4 percent of their earnings). It costs the Haras about $4.00 (0.20 percent).

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1 Comment

Filed under China, economics, Hawai'i

One response to “China Diary, 1988: Cheap Rent, Expensive Food

  1. It is so surprised that the RMB value was so high compared to the USD.

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