Purchasing power not improved
The frequent reports on salary growth and the promise of wage increases had given people more hope for higher incomes. Yet few have been satisfied.
"The growth of my salary did not exceed food price growth," said Ji Baoliang, a worker in Dongguan, Guangdong Province. "My basic payment was raised by 80 yuan to 1,280 per month this year, but the price of Lanzhou Noodles went up by 1 yuan to 6 yuan a bowl," Ji told the Outlook Weekly.
According to Ji's calculation, he was paid 2,300 yuan a month (plus performance pay) in the first half of 2010, and saved 1,500-1,600 yuan each month. Although his payment rose to 2,700 yuan in 2011, he now can only save 1,300 yuan a month. "My purchasing power has been reduced," he said.
China's consumer price index (CPI), a major gauge of inflation, jumped 6.5 percent year-on-year in July, according to the NBS Tuesday. It accelerated 1 percentage points from May's 5.5 percent and 0.1 percentage points from June's 6.45 and stood at a 37-month high, far exceeding the government's annual inflation control target.
Food prices, which account for nearly one third of the basket of goods in the nation's CPI calculation, continued to rise 14.8 percent in July from the same month last year, a pace faster than June's 14.4 percent.
Some urban residents have become unable to afford pork and fruit, as pork prices surged 56.7 percent in July from the previous year, according to official statistics.
Ji is not the only one who feels that the "money is not enough." Xiao Tian (alias) earns about 5,000 yuan a month and bought a house in Beijing last year. "My salary increased 20 percent this year, but I seldom go shopping because I feel like I don't have enough money," she said. "I have to pay more on my house because the central bank raised lending rates again. I am just a transfer station; the increased part of my salary is transferred directly to the bank from my hands," she sighed.
Mr. Xu, who works at a Website in Beijing, feels the NBS data is untrue. He was unaware of the salary increase of 7.6 percent, since his pay has changed little in the last two years. "I am BEI-increased," he smiled, using a popular Internet term which expresses disbelief in the government report showing that average wages have increased.
In addition to the surging CPI, various other factors have impacted people's impression of the salary increase, said Fan Zhiyong, an economics professor at Renmin University. Middle-aged consumers may feel more cost pressure because of rigid expenditures, including mortgage payments and the cost of their children's education, he said.
The NBS statistics only show the average salaries across the country and do not reflect all industries and regions, which has caused some residents like Xu to have unrealistic feelings about the data, Fan added.
No relief in sight
Although the July CPI reached a 37-month high, the surge may not end, according to some economists. Industrial Bank Chief Economist Lu Zhengwei said it would be difficult for the government to keep the whole year's CPI under 5.0 percent, and predicted that the central bank may raise interest rates again this month.
The People's Bank of China (PBOC), the nation's central bank, on July 7 raised its benchmark deposit and lending rates by 25 basis points, the third rate hike this year and its fifth rate increase in the latest round of tightening in order to control inflation. The one-year yuan lending rate was raised to 6.56 percent from 6.31 percent and the one-year yuan deposit rate to 3.50 percent from 3.25 percent, which has put more economic pressure on Chinese home mortgage slaves.
