Two stories came out in the last week, highlighting income disparities in China's cities.

Carrefour Chongqing saw the tragic death of three people in a stampede for cheap cooking oil, more than 30 were injured. A Carrefour in Chongqing cut the price of vegetable oil from 51.4 yuan to 39.9 yuan as part of a sales promotion, a discount of 11.5 yuan. International media has reported the story, papers such as the FT linked it to China's recent inflation pickup, focused in meat and other agricultural products. How could 11.5 yuan cause such a stampede? Not necessarily inflation caused, not necessarily caused by any one factor:

According to reports, the shoppers lined up very early in the morning...

Two stories came out in the last week, highlighting income disparities in China's cities.

Carrefour Chongqing saw the tragic death of three people in a stampede for cheap cooking oil, more than 30 were injured. A Carrefour in Chongqing cut the price of vegetable oil from 51.4 yuan to 39.9 yuan as part of a sales promotion, a discount of 11.5 yuan. International media has reported the story, papers such as the FT linked it to China's recent inflation pickup, focused in meat and other agricultural products. How could 11.5 yuan cause such a stampede? Not necessarily inflation caused, not necessarily caused by any one factor:

According to reports, the shoppers lined up very early in the morning; some of them came out in full force, with all seven members of their family, old and young. It was a deal many did not want to miss: a 11.5 yuan discount. Incomes in China show wide disparity. While the middle class may enjoy an income of several thousand per month, probably own at least one property, maybe a car, have savings for medical emergencies and invest in their children's education, the poor cannot, and there are a lot more poor than rich. A migrant worker, if male working on a building site, if female working as a waitress in a restaurant, may expect an income of 300-500 yuan per month plus food and lodgings in a city like Chongqing or Dalian. A retired person may have an income of less than that, depending on family for support, perhaps even feeling they're a burden on their family. A family living in a city, but without an urban Hukou (a family document entitling those in it's possession to health care, and children's education) may have additional expenditure of 1000 or more yuan per month privately buying services the local Hukou entitles others.

Suddenly 11.5 yuan has changed from $1.50 to become equivalent to an entire day's work, and it has become much more understandable why three died in the stampede. While other factors cannot be ruled out as contributory, the common Chinese love for the hustle and bustle of a crowd, to poor management and preparation on Carrefour's part, the tragic Carrefour deaths seem more a manifestation of poverty than anything else.

Being Middle Class

If not poor, what makes one middle class? CASS, the Chinese Academy of Social Sciences, a branch of the Beijing government, recently told us. To quote Xinhua "A Hong Kong salaried man can be called a white-collar worker only if his monthly wage is no less than 18,500 yuan, or about 2,600 U.S. dollars. The corresponding figure in Macao is 8,900 yuan, or 1,200 dollars. Shanghai, Shenzhen, Wenzhou and Beijing are in the second level, with standard monthly wage rates of 5,350 yuan, 5,280 yuan, 5,020 yuan and 5,000 yuan respectively. The third level includes Hangzhou (4,980 yuan), Guangzhou (4,750 yuan), Suzhou (4,300 yuan), Xiamen (4,100 yuan) and Qingdao (4,000 yuan)." Lhasa came last in the list at 900 yuan per month, making it quite the attractive retirement option.

According to this Chinese language report the white collar salary in Dalian is 3000 yuan per month. According to this blog report, a family lacking a hukou can expect to pay 1800 more for essential services (probably 1800 in more expensive cities, less in cheaper cities), so someone with a Beijing hukou could be considered white collar if they earned 5000 yuan per month, but without a hukou they'd have to earn 6800 yuan per month to enjoy the same standard of living. Consider this when negotiating a contract.

Links to the Chinese reports sourced from Shanghaiist's coverage.