People's Daily has caused an online kerfuffle after publishing an article that attempted to rebut the results of a survey showing that Beijingers have higher living costs than New Yorkers.
Research by the People's Daily concluded that costs were lower in Beijing than in New York City, citing lower public transportation costs or the price of a man's haircut. Web users have questioned the conclusions, as the report takes no account of the income disparity.
Mercer Investment Consulting released the original survey in July. Beijing ranked 20th out of 214 cities, in the comparison of costs of more than 200 items, including food, housing, transportation, and entertainment. The living costs in New York City are equal to 86 percent of those in Beijing, a decrease from 89 percent last year and 90 percent in 2009.
A popular Sina Weibo thread discussed how one person earning a hypothetical $5,000 per month could afford a better car, more Levi jeans, and more nights out at fancy restaurants than people in China, who may make 5,000 yuan ($773) per month.
The People's Daily report listed the prices of 12 products in the two cities, in three categories: products and services more expensive, equal to and cheaper than in New York.
After converting the prices of products in New York into yuan, prices of barbers, housekeeping services, and bus tickets are about 10 times as much as in Beijing. Pork is around the same price, while renting an apartment in Beijing's CBD costs less than half of downtown New York.
"It's absurd to compare without considering the average income of the two cities, just transferring the US prices into renminbi," said Li Hao, a local finance consultant who previously worked for Citibank in New York.
"Taking the salary into consideration, life in New York is much more affordable right now," he said.
Zheng Shuai, a Beijinger who currently works in New York, agrees with Li.
"For example, if you have a master's degree, average monthly salary here is about $5,000. Perhaps white-collar workers in Beijing earn 5,000 yuan, but buying fast food or a pair of gym shoes, while similarly priced, is less affordable, because of income disparities. Fuel and housing are much cheaper too," he said.
According to a report on website Business World Chinese on August 11, New York's annual per capita income was $70,000 in 2010, while that of urban Beijingers was $4,552. Beijing's rural residents made $2,076 annually.
"The report says a kilo of pork is 45 yuan in New York, and 40 yuan in Beijing," Li said. "The price is about 0.014 percent of the annual income in New York but 0.14 percent here, so it's ten times less affordable," he said.
Zheng Xinye, an economics professor at Renmin University of China, also thinks the comparison is not useful.
"The comparisons are would be meaningful only if they reflect the price levels that common people can afford in life, which requires including income levels as well as the Consumer Price Index [CPI]," said Zheng.
"CPI inflation tells us how much impact the price increase has on residents, and in August, China's CPI was 3.6 percent higher than the US," he noted.
