Beijing Out of Control? (1)

My first impression of Beijing the first time I visited it in 2006 was its incredibly cheap prices, especially the food. Back in Spain I told everyone how you could enjoy some delicious noodles for as little as 4 kuai (40 cents), or go to an all-you-can-drink bar for only 40 yuan (four euros).

Well, Beijing is changing. Things in this city are getting more and more expensive, but it seems that this is only the beginning. Last night I ordered the same dumplings I have been ordering for the past months. You could get 20 of these Chinese ravioli for only ten yuan (one euro). Well, not yesterday night. All of a sudden twenty of these dumplings cost 16 yuan. Well, still cheap, some of you might think. Well, cheap for us lucky Westerners, but it is a 60% increase in a city where most people earn around 300 euros a month.

Real state also shows the exponential growth of prices in Beijing. Renting an apartment in one of the fancy places (fancy because it is near downtown, not because the quality is up to European standards) is already more expensive than Córdoba, my home city. But, as it happens with food, what worries me most is not its current price, but the speed it is getting more and more expensive. Every year rent owners all around Beijing fear the moment where the one year contract ends and they have to face ruthless negotiations with the landlords…well, actually these negotiations are oftentimes not so ruthless, since the money landlords ask is so ridiculous that many people just change apartment every year. I can remember when, only three years ago, I boasted that I was only paying 1700 yuan a month (remember, 1 euro=around 9 yuan) for a huge room downtown with my own bathroom. “Still, pretty expensive for China”, some of my friends told me. Well, surely that room won’t be cheaper than 2500 RMB now…barely three years later.

What bothers me is, prices are getting close to those of Europe, but the quality is still very far behind. The surroundings of my apartment smell some times like someone who has been long dead, due to the bad sewer system, and my shower is not hot enough during the winter and it burns during the summer, just to mention a couple of examples.

The Chinese government has sets its eyes into stopping inflation, but prices continue to rise all the same. And the most obvious problem is that salaries are by no means growing at the same rate. In big cities like Beijing there are people who are making an immoral amount of money, while the biggest part of the population struggles to make ends meet. Chinese market is booming, and big corporations (Chinese and foreign) are willing to pay more and more money to its executives. At the same time, millions of Chinese graduate every year and are willing to get paid 2000 yuan or less and share a badly ventilated room with many other people in the same situation. And thus the gap between rich and poor continues to grow bigger and bigger.

At the same time, some companies are moving its manufacturing sites from China to other countries in South East Asia, like Vietnam, since labor costs are not that cheap in China anymore. That seems to be within the plans of the Chinese Communist Party, who wants to transform China into a developed country whose economy has a deeper rote on services. However, is China, a country with still hundreds of millions of people living in the countryside ready for such a change? How longer will the laobaixing (Chinese for “ordinary people”) tolerate the increasingly difference between rich and poor in this “socialist” country? Will Beijing be as expensive as Madrid in a couple of years? Should we get ready for an economic crash in the following years? Maybe a revolution of the masses?