Across the Divide

Across the Divide 2010-10

In August this year China overtook Japan to become the world’s second largest economy. It was welcome news to the world’s most populous nation, but it does not tell the whole story. The gap between China’s rich and poor is at its widest since the economic reforms of 1978. The richest 10 percent own 45 percent of China’s residential assets, while the poorest 10 percent own just 1.4 percent. Beyond the facts and figures, real lives are being played out.

These eight profiles can’t give a definitive picture of China’s wealth disparity. About 20 million people live in Shanghai. It would be inaccurate to group them by their wages and say they’re alike. But what these stories do provide is a snapshot – from meager existence to millions – of the day-to-day realities for those living along the local wealth spectrum.

 

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The Homeless Guy, Cai Guowei

Cai wakes up at 6am, usually somewhere near Suzhou Creek. He packs his things into two plastic bags that are splitting at the seams and piles them onto a pushcart. Then he starts toward Jing’an Temple, stopping at every bin along the way to look for bottles, worth RMB0.12 each. This has been his reality for two decades.

“Every day I think about my regrets”

His conversations gravitate around anger. His hands shake, his voice rises. He wears coke-bottle glasses he bought at a flea market. He’s 55, but boyishly thin. Cai has stomach problems from eating irregularly and relies on churches for handouts. In summer he makes about RMB600 per month. During winter he might make half that.

Cai has Shanghai residency, which is unusual. Most homeless people are from other provinces. Local social workers say Shanghainese homeless are typically older men – often with alcohol problems – estranged from their families.

Cai seldom drinks, but he doesn’t see his son or ex-wife anymore. In the late ’80s, he lost a railway job he’d held for 15 years. Then his mother fell ill. Caring for her depleted his savings. He lost his property and has been making his living from recycling bottles and paper ever since.

At Jing’an he breaks for lunch. Often it’s steamed bread and bottled water. For RMB5 he can buy a bowl of rice topped with vegetables. He prays before he eats. On Tues- days and Fridays there’s a church that offers lunch and a shower. Another church has showers on Thursdays, but no food. In the winter he scavenges from garbage bins and behind restaurants.

Cai makes RMB20 per day when it’s hot, because people drink more and discarded bottles are abundant. He saves half the money for winter when there aren’t as many bottles. A church gives him RMB200 at Christmas. That helps, but his savings are always gone before the next summer.

Every other month he replaces the tires on the pushcart – RMB14. He has a couple of changes of clothes and a 15 kuai radio that he uses for weather and news. At Chinese New Year he gathers with friends at People’s Square and everyone pitches in RMB20 for fried chicken and beer.

He knows people worse off – guys with health problems that can’t collect bottles anymore.

Cai hopes his situation will improve. He has relatives in New Zealand. If he had the means he’d like to move.

 

The Cook, Barry Xue

As a trainee chef at Malone’s Barry Xue makes RMB1,200 a month, which is just
above local minimum wage (RMB1,120). There’s also the occasional RMB100-200 in overtime.

He doesn’t have much, but Shanghai is a good place for a young chef. After graduating from high school in Jiangsu Province in 2007, Xue decided to move. His parents helped by lending him RMB500 a month in the first year.

At first he rented a room in Baoshan for RMB300, sharing a kitchen and bathroom with three others. He used to work in home-style Chinese restaurants. Then in March he saw an online ad for Malone’s. Working at a Western restaurant sounded like a good career move, so he applied.

Xue, who is 22, still lives in Baoshan, but now shares a place with just one other guy – another young chef. His rent is RMB700. It takes 45 minutes to bike to Tongren Lu for work.

Xue became interested in cooking in middle school when he started reading food and drink magazines. But his exposure to Western food before Malone’s was essentially limited to KFC. Now, on workdays, he eats in the kitchen. He’s developed a taste for steak.

After rent, Xue’s biggest expense is clothes. He doesn’t shop every month, but when he does he spends about RMB300. He tries to save about RMB300 a month too.

When they aren’t working, he and his friends like to go win- dow shopping at Tesco or Carrefour. They’ll read books there, occasionally buying them. He also spends time teaching himself English through books and computer games.

Xue wants to be a good chef. He doesn’t have money to go out, but he thinks he might like to open a bar.

“I don’t buy things I don’t need,” he says. “The most important thing for now is to learn. To have enough to get by is enough.”

 

wealthgap2The Toy Maker, Zha Peihua

Every day, from morning to night, Zha parks near a children’s hospital or outside a block of restaurants in the former French Concession to sell his craft. He’s 59 and suffers chronic pain in his hands and knees from injuries he sustained working in a leather factory for more than 30 years. Now he makes wire bicycle models to cover his growing medical costs and support his son at university. In a month Zha makes RMB2 ,600; RMB1,600 from the state pension and another RMB1,000 from his models.

Zha sells the models out of the back of his specialized tricycle. It has extra wide wheels and hand gears instead of pedals. Zha has trouble walking. In 2008 he rode to Beijing to see the Summer Paralympic Games. Seeing the athletes vie for gold gave him confidence. He keeps a picture of himself riding through Tiananmen Square taped to the trunk.

The toy models sell for RMB30, or RMB10 to hard bargainers. If people are nice and pay RMB30, he’ll also throw in a wire man. He carries boxes of materials in the trunk, along with his medicine. One bottle alone costs RMB80. Every year Zha spends more on his health. If he can’t cover it all one day, he’ll just die, he says. He lives alone, and already has had days in bed immobilized by pain.

“Every day I wake up, see the sun. OK, I live another day.”

He eats one meal a day, a box lunch with lots of rice. It takes about RMB250 a month to maintain the tricycle. Each month he gives RMB1,000 to his son in college. The rest goes toward medicine and incidentals. Clothes come second-hand. He’s resourceful: Once he bought three broken headphone sets for RMB1 each and turned them into one functioning pair.

“If I had more money I would give it to charity. Lots of people have helped me,” he says.

He lives in a room near People’s Square that’s part of the house he’s lived in his entire life. The bathroom and kitchen are shared with other tenants now.

He and his wife split years ago, which is good, Zha says. The energy he spent fighting now goes toward models.

The bikes take hours, each slower than the last due to the pain in his hands. He probably shouldn’t do it, he says. It isn’t economically sensible. But seeing kids enjoy them makes it worthwhile. He likes to tell them they’re going to get very tall one day.

Sometimes he overhears mothers lecture their children: “See that man? You must study hard not to be like him.” It makes him chuckle. “Life should be joyful,” he says. “These bikes are my legacy.”

 

The Marketing Assistant, Miki Zhou

Twenty-four-year-old marketing assistant Miki Zhou makes RMB4,500 a month, above average for recent college grads in Shanghai (RMB3,500). Still, it’s just enough to cover her obligations.

After graduating from Sichuan Normal University in 2008, Zhou came to Shanghai for training to be head waiter at a restaurant back in Chengdu.

“It was a very special feeling,” she says. To her, Shanghai was a big international city brimming with opportunity. It was a place she could learn about the world quickly.

“Are we middle class? It’s hard to say. In Shanghai the rich person is too rich and the poor person is too poor. I don’t know how to identify the middle class”

So she quit her job, borrowed RMB5,000 from her family and made the move to Shanghai permanent.

Two years later, Zhou does marketing for a chain of Sichuan restaurants. Sometimes she works six days a week. There’s no overtime, and things are tough.

 

The General Manager’s Assistant, Faye Lu

Recently married, Faye Lu and her husband, John Jiang, bring home RMB11,000 per month combined. Now she must figure out how to budget for a family.

In August, they moved into a two-bedroom, one-bathroom home in Jinqiao. They’ve been unpacking slowly. Lu has 50 pairs of shoes stacked in boxes in a closet.

She’s 28 and for three years has been the general manager’s assistant at a company that distributes American shoes to retailers across China. Discounted footwear is one of the perks.

Lu earns more than Jiang, but his company provides their home. They only pay RMB500 per month. They save about 30 percent of their paychecks and hope to buy their own place soon.

Legally married in March, they will hold their wedding banquet at the Crowne Plaza this month. It will cost about RMB70,000. Following tradition, the groom and his family will pay. Jiang has saved for it a long time, Lu says.

With good jobs and a place to live, they aren’t stretched.

On weeknights Jiang cooks, but on weekends they go to restaurants. They see movies a couple of times a month. Where else does their money go? On that they can’t agree:

“Buying clothes, buying shoes,” Jiang laughs. “It’s more than 1,000 each time.”

“I don’t go shopping every month!” Lu retorts. And then, as an aside, “Ni bu yong jiang hua.” (You don’t need to talk).

“I’m happy but I don’t think it’s enough,” she says. “Not enough for a car, not enough for children.”

Their family wants her to have a baby soon. Then they’ll need a car. Right now, Lu buses to work. During rush hour it’s crowded and she stands for the whole hour-long ride. Jiang doesn’t want her to do that when she’s pregnant.

They don’t know how they’ll afford everything kids seem to need, but they don’t worry too much. Family will help.

Lu wants to be a merchandiser, maybe open her own shop one day. She’d like
to make enough to move her parents from Anhui to Shanghai.

“I don’t earn much, but I think it’s okay,” she says. “The life in Shanghai is not that tough like others.”

 

The Product Manager, Liu Siyuan

Fifteen years ago Liu Siyuan was a frustrated physician in an impoverished region. He moved out and switched to business. Now he’s implementing solutions to problems that troubled him as a young doctor.

The son of clothing fac- tory workers in Shanxi, Liu studied medicine and start- ed his career at a hospital for railway workers. His salary was RMB1,000 a month – not bad for the time – plus free train tickets.

But he didn’t like the job. In the developing healthcare system, there weren’t good standards. Too many decisions were left up to the doctor.

When he got married, he and his wife honeymooned in Shanghai. Walking along the Bund, they decided to look for opportunities outside Shanxi. He landed a sales job at a medical company in Xiamen. The first month he made less than his physician job, but in the second he made more.

Working in sales took him from Xiamen to Guangzhou to Hangzhou before landing in Shanghai about a decade ago. He’s 40 now and has been with his current com- pany nine years. Liu says he earns “within range” of the US national average, which is around RMB23,000 per month.

As a product manager, Liu travels around China doing two jobs. One is marketing a new catheter. The other is promoting safety for healthcare workers, specifically how to avoid needle injuries and prevent the spread of HIV. It’s fulfilling work, something to be proud of.

“We have social responsibility to healthcare workers,” Liu says. “We’re so busy. We always say we keep working even if we’re dreaming.”

He’s always on planes and away from home half the time. Sometimes working in one city then sleeping in another.

He and his wife own an apartment near Tianzi- fang where their mortgage payment is RMB3,000 a month. On weekends they shop on Taikang Lu. They vacationed in New York recently. Their biggest non-necessity expense is gadgets, Liu says. This summer he bought an iPad.

His wife is in charge of savings, following Chinese tradition.

“I don’t care about it. We have a good financial situation.”

Liu knows it was the right decision to leave Shanxi. His sister still lives there making about RMB1,000 a month as an accountant.

“There’s no international company, no exposure, no opportunities. It’s so different,” Liu says.

In Shanghai, the future is promising. Liu hopes eventually to be promoted to marketing manager, then retire sometime after his 8-year-old daughter gets through university.

Sometimes, after she’s asleep, he and his wife will go for a drink near their home, or just take a walk and enjoy the nighttime quiet of the former French Concession.

“I have a good life. I have a lucky life,” he says.

 

wealthgap3The Marketing Executive, James Duan

Brought up in communal housing in Chengdu, Duan was the eldest son and it was his place to go out and create something. His brother stayed in Sichuan, looking after their parents.

Duan spent eight years in Australia, became a citizen, met his wife, and now lives on an expat package provided by Ogilvy & Mather, a leading international communication agency. He’s 43 and one of China’s top marketing executives.

After going to college in Beijing, Duan briefly worked at China Resources, the mega- conglomerate that owns Snow Beer. Then he left for Australia on a scholarship.

“If I’d stuck with China Resources I would’ve been a high-ranking Chinese busi- ness man, driving a Ferrari with 10 concubines,” he says, laughing.

Instead he got an MBA and worked for a business school, but after several years didn’t feel challenged.

“In China when people get together they talk about work, in Australia people talk about the beach and barbecuing. I can’t just lie on the beach. I wasn’t born overseas.”

He came back a decade ago to work for Ogilvy.

Duan works 50-60 hours a week. He gets home after 9pm. Working weekends isn’t unusual. It all depends on clients. He’s a Vodafone addict, and has a secretary who knows his life better than he does.

It’s high-stress, but it affords an apartment in a new complex with a clubhouse and swimming pool. Monthly rent is above RMB13,000. His Australian-German wife shops at import stores, so they spend a minimum RMB6,500 per month on groceries for their family of four. Being tied to Australia is costly. He pays for two storage units back in Sydney. His kids have two of everything – toys, baby beds – one for Shanghai, one for “home.”

It’s comfortable, but all things are relative. For Duan they’re relative to a peer group of successful expat business people. Duan did not disclose his monthly earnings. But the Public Relations Institute of Australia listed average manager/director salary for 2009 as $10,600 Australian dollars per month – roughly RMB66,000.

“Some are on very good expat packages … there’s some pressure there,” Duan says. “I’ve talked with lots of people. No one is happy with what they have now.”

Duan saves about 30 percent. He plans to retire in 10 years or so and spend more time with his kids when they’re teens. It’s getting harder to be away, but it’s a life of his choosing. Plus, his job allows his wife to stay at home with their children.

“In a way we have a very traditional Asian life. I think it’s very rare.”

The Ex-Banker, Jane Zhang

Jane Zhang spent six years trading commodities on Wall Street then returned to Shanghai with US $50 million (RMB340 million). In her spare time she’s a gamer. She prefers to eat at home. She hasn’t lived on salary for a decade.

Jane’s 2-year-old Internet start-up, Circle Pleasure, is on the second floor of a small business park in Xujiahui. The 45-year-old entrepreneur doesn’t have a corner office or executive furniture, just a desk covered in papers where she sits in jeans and a T-shirt plotting the commercial future of a 3-D virtual world.

“Everyone is chasing commodities now. I go into selling thin air,” she says. “I’m very lazy, actually. I don’t want to do operations, deal with all these weird people. It’s very mafan, ne?”

Zhang received her Masters from Georgetown before moving to New York. When she was on Wall Street, she often saw returns of 1,000 percent, she says.

In 2000 she returned to Shanghai and invested RMB10 million in an intranet security company. They won a government contract and in two years she made eight times what she put in.

“Good timing,” she says, adding, “A country with 1.3 billion people has lots of secrets to keep. In this case it’s just impossible to use a foreign company.”

It’s the same combination of instinct and savvy that led her to invest in Shanghai Organics in 2005, a brand that’s now ubiqui- tous in local upscale grocers.

“I’m very patient, I can wait you out. When it’s not happening, I can stay home and play computer games.”

And she does. Zhang once spent three days playing Legend of Mir, breaking only to nap.

Zhang lives with her parents in a villa in Minhang. That too has quadrupled in value since she purchased it. She doesn’t know what her monthly expenses are because her mom pays the bills. They aren’t exorbitant: Her ayi cooks usually, and they get free vegetable deliveries from Shanghai Organics since she’s a shareholder.

Chinese modern art and rare stamps are her indulgence. She once spent RMB500,000 on a stamp printed during the Cultural Revolution.

Beyond that, life is simple. Too many things would tie her down. She isn’t married because having a family means you have to change for others, she says.

“The most important thing to me is freedom – if you have money, you have freedom,” she says.

That’s Shanghai, 2010
Photos by Nicky Alamasy

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