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The Rot at the Center, Middle Kingdom-Style   (September 23, 2006)


The rot at the center is not limited to the U.S., as this Shanghai-based blog reveals.


We Filled Our Lives But Lost Our Souls:
First off, lemme just say it's damn hard to keep one's soul in contemporary China. Everytime I went back to Shanghai, it felt very different to me. In recent years, increasingly, I felt an overwhelming sense of materialism. Adding to that is tremendous peer pressure and the need to 'keep up with the Jonese.' What others have I have to have it, too. What others do I have to do it better. That's painful. By going with the flow we essentially give up our own choices, ideals, and individuality. Or, in other words, our souls.

But how can you not go with the flow? If the entire society is crazed about making money and buying houses, how do you dare to be different? What about parental expectations? They've had a hard life raising us. What about our children? We can't have them lose out from the start. Life is a race and you simply cannot afford to stop.

Partly that's why I hide in San Francisco. In Shanghai reality is presented in a much harsher, right-in-your-face kind of way than in SF. Here people could care less about what you do with your life. Sometimes I try to picture what I would be doing today if I stayed in China. And all I could think of is a stifling cube in an office building somewhere in Beijing or Shanghai. I don't think I would've had the courage to do anything different. I have a lot of respect for the independent spirits in China today, simply because it's just so much harder there to stay true to oneself.


This is not to say that life isn't exciting and rewarding in China. But the financial pressures sound eerily like those in the U.S. cities like New York and San Francisco. Here is an excellent entry on wages and condominium costs in Shanghai: Going Back to China?. The entry is a response to a Chinese-born person wondering if he/she should return to China from the U.S. Here are a few data points from the post:
In IT industry, undergraduate students have to work hard to earn 36,000 RMB per year.

You can buy some good apartment at 7000 RMB/sq. meter or some nice apartment at 10,000 RMB/sq. meter.
RMB denotes the Chinese currency, the renminbi, unofficially known as the yuan. It is currently pegged to the U.S. dollar at about 8 to 1, so one yuan is worth about 12 cents. Thus the average white-collar worker's annual salary of 36-38,000 RMB is about $4,000.

One square meter is roughly 10 square feet, so a 100 sq. meter apartment is about 1,000 square feet. Using the numbers given above, a 1,000 square foot flat in Shanghai is about 700,000 to 1,000,000 RMB, or roughly 20 times the average white-collar annual salary. Here in the Bay Area, that's roughly analogous to a wage of $40,000 a year and a flat which costs $800,000--in other words, San Francisco or Manhattan.

(Note: an IT professional in San Francisco might earn $80,000, of course, reducing the salary-to-house ratio to a mere 10 to 1. In the recent past, the average in the U.S. was 4 to 1.)

So an IT professional in Shanghai earns about $4,000 a year, and a decent condo costs $100,000 or more. (Non-professional workers earn a mere third of the professional's pay.) Note that these prices are from a few years ago, and with the property bubble very much in play, the current costs of a flat in Shanghai may well be 10%-20% higher than those stated here.

Is there any doubt that housing is unaffordable in China's biggest cities? When an flat costs 20 times a high-end IT professionals' salary, it seems obvious that China is also in the midst of a stunningly inflated property bubble.

To summarize: first you lose your soul trying to earn enough to buy a home, and then when the bubble bursts you lose the home, too. What happens to those who've mortgaged their souls along with their property? The home can be replaced at some point down the line, but the soul... perhaps not so easily.


For more on this subject and a wide array of other topics, please visit my weblog.

                                                           


copyright © 2006 Charles Hugh Smith. All rights reserved in all media.

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