Philadelphia vs. Guangzhou

By Sheila Jin

Li Zhibing, 26, was busy working on the stage, wearing a fashionable suit and a pair of trendy sports shoes. He was contacting people backstage and in the control room to adjust the lights to make them fit the music.

Li, who lives in Guangzhou, is a stage director of SMG Fashion Design Company. His regular monthly salary is ¥22,000, or $3,365.

The amount of ¥22,000 can be regarded as the high salary for the middle class in Guangzhou and also many other developed cities in China.

The middle class is the largest income group in both China and America. Philadelphia is the fifth largest city in America. In 2013, Philadelphia’s gross domestic product ranked seventh in the U.S. As Guangzhou is one of the best-developed cities in China, how does it compare with Philadelphia?

According to Li, he has to pay insurance each month for his pension, unemployment and employment injury for about ¥400, or $60, and income taxes. His monthly expense includes about ¥300, or $45, for his car’s gasoline, ¥300 for telephone charges, ¥1600, or $245, for a one-bedroom apartment and ¥2,000, or $306, for savings. Li loves traveling. Whenever he finishes a show, he leaves the city to relax.

“I love to find interesting places to eat and have fun when I finish,” Li said. “My job is extremely stressful. Luckily, my salary allows me to take a few days off and take a breath.”

However, according to the data shown in Numbeo, to maintain the same standard of life as Li in Philadelphia, people need around $60,408 (¥397,415) a year (assuming people rent in both cities) more than $20,000 higher than in China.

Also, consumer prices in Guangzhou are 45.54% lower than in Philadelphia. Rent prices in Guangzhou are 55.23% lower than in Philadelphia. Consumer prices including rent in Guangzhou are 48.93% lower than in Philadelphia. Restaurant prices in Guangzhou are 64.83% lower than in Philadelphia. Groceries prices in Guangzhou are 43.79% lower than in Philadelphia.

However, despite lower prices, the local purchasing power in Guangzhou is 29.64% less than in Philadelphia.

Han Wenxiu, a columnist studying the economy from Tencent, said that even Chinese economy had been developing at a high speed, the distance between it and America was still apparent.

“People always wonder when would China catch up with America,” Han said. “But people should realize that even if one day our GDP was higher than America, we still have a long way to go because wealth accumulation is a long process.”

According to U.S. Census Bureau, families whose annual income are lower than $50,000 account for 50.4% of Americans. And the families whose annual earnings are between $50,000 and $100,000 account for 29.1% of Americans.

However, based on the data shown in the China Household Finance Survey conducted by the Southwestern University of Finance and Economics, only 4% of Chinese families’ annual salary can reach ¥240,000 ($36,470).

The Brookings Institution, a nonprofit public policy organization conducting in-depth research, reported in 2009, that most Chinese living standards were still at the subsistence level rather than middle class. However, Brookings indicates that as the economy’s development and the increase of the income gap, about 70 percent of Chinese will be categorized as middle class in 2030.

Having a similar living standard with Americans, Li represents only a small group of people living in China. Despite some economic advantages, China still has a long way to go tp catch up with the overall buying power of the middle class in the United States.

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