Judging by the plethora of different reasons for foreigners coming to live in China, for defined or undefined periods of times, the very wide array of economic and career backgrounds they hail from comes as little surprise. While there are an increasing number of foreigners here out of dire economic circumstances, many chose China rather than China choosing them. Some come for an attractive salary package, others for a lifestyle switch. They are here out of free will, or because it is the smart thing to do, given China’s ever-solidifying position as a pillar of the future global economy.

Income disparity among expats in China
Excluding Hong Kong, Macau and Taiwan, China’s 2010 population census reports that there are 600,000 foreigners living in China, less than half of whom have work permits. As the Chinese economy keeps growing, so will the number of expats. Yet the income they are bringing in varies wildly depending on a number of factors.

The education sector, where many expats make a living, is an area with particular disparity. While some unfortunate teachers find themselves scraping by at 4,000 RMB per month or less (even Peace Corps volunteers make almost half of that as teachers), mega-qualified teachers with doctorates and the right position can earn up to 30,000 RMB every month. Many teachers fall into the 5,000-15,000 RMB range, mostly dictated by location and experience as much as credentials. Although there is significant room to bargain and make a lot for overtime hours, many teachers are not making as much as those expats working for multinational companies in other industries.

Meanwhile, there are plenty of expats that rake in a killing. Full-time employees in other industries, including auto, hi-tech, chemical, engineering, pharma and consumer goods make 13,000 – 53,000 RMB per month on average. Not to mention attractive benefit packages that include between 10,000 – 50,000 RMB housing allowance per month and up to 12,000 RMB each month for educating a child, according to AON Hewitt’s 2010 Expatriate, Returnee and China Hired Foreigner, Compensation and Benefits Survey. In these other industries foreign consultants earn at least 10,000 RMB per month. Aside from the human resources department, foreigners hired in their home country and assigned to a position in China typically make more than if they were hired directly in China. These assignees, at least those outside of the education industry, are typically the highest earners among Chinese expats.

Perceived wealth disparity among expats

While not all foreigners’ earnings are equal, most are making between 10-300 times as much as their Chinese counterparts and spending a tenth to a third of what it costs to live in the developed world. This creates an ideal situation for expats making loads or only a little.

Like many expats all across the world, many don’t leave their homeland just for the paycheck. That means at a private English school I’ve seen a retired (and economically comfortable) American heartland rancher working alongside an Aussie twenty-something who chose China for the amount of his paycheck he can stash away to make a down payment on property at home — and just about everything in between. In the internet industry, I’ve known a Chinese-culture obsessed search engine optimizer who worked as little as necessary to spend more time enjoying his days with his new bride. I met an online advertising manager who’d been headhunted in the U.S. and who bolted eagerly back home after only six months in Shanghai.

There is no foolproof method for determining a Westerner’s position on the economic ladder. For example, from a glance, it is much easier to figure out which rung a Chinese person has achieved than their Western counterparts. Quite simply, the Chinese usually buy what they can afford, whereas the credit-driven consumer class of the West (particularly the U.S.) has allowed the “fake it till you make it” crowd to not only exist but to become damn near normal.

What’s more is that most Western’s don’t have to lift a finger to prove they are wealthy, it’s assumed by locals. For the time being that is an accurate assumption. In tier 1 cities, like Beijing and Shanghai, the sheer number of foreigners and history of the foreign population means there is more competition among foreigners and a larger scale on who has what and exactly how much effort is needed to solidify a desired status level. In tier 2 and 3 cities, the requirements to prove your status are lower, evidenced by the wow-a-foreigner-factor that persists in these cities. Indeed, you are wealthy until proven otherwise.

Cost of living in China

Everyone likes a bargain. The wealth disparity among foreigners in China is a good reminder of that. Despite the escalating costs of living, in comparison to most Western cities in the same category (i.e. Boston to Beijing, Chicago to Chongqing, Houston to Wuhan, Shanghai to San Francisco), China is still a steal, even if expats who have been here for a while harp otherwise.

Living in China is a bargain. Everyone wants to spend less when possible, no matter where they sit on the wealth or income spectrum. Relativity aside, the have-nots, the have-somes, and the have-lots are all better off economically living in places that cost less than what they are accustomed to. Not worrying about price is a load off the mind.

Sure this can change over time. Maybe you didn’t initially consider a weekly foot massage or bottle service at a club as a part of your routine; nevertheless, these perks have monetarily become irrelevant in the grander bank account scheme of things. It’s easy to be less conscious of how much you’re spending when things cost so little comparatively. Even with increasing costs, many Western foreigners reap these economic advantages in a variety of ways in their day-to-day lives in China. Such living conditions are attractive to everyone on the wealth scale — no matter how much they are bringing in every month from their Chinese day job.
 

Related links
The Chinese Teacher’s Paycheck
The Beginning of the End for Lavish Expat Lifestyles
Are Foreigners in China Overpaid?

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