CHINESE people, faced with a stubborn rise in the cost of living, are becoming more keenly aware of the widening gap between their salaries and the prices they pay for goods and services.

At a small press conference last month, Jing Ulrich, a managing director for JPMorgan Chase, was telling reporters that most Chinese people have benefited in proportion to the nation's solid economic growth this year.

"I bet all of you agree with me," she said confidently.

But to her surprise, none of the reporters concurred. And since they were suddenly presented with an opportunity to voice their grievances, they did.

"Everything is going up but our incomes," a National Business Daily reporter complained, noting that her salary hadn't increased in two years.

Ulrich's argument may be based on National Bureau of Statistics data showing that the disposable income of China's urban dwellers expanded 10.5 percent from a year earlier to 14,334 yuan (US$2,155) in the first three quarters of this year. On an inflation-adjusted basis, that worked out to a net increase of 7.5 percent.

Not keeping pace

But somehow or other, people just don't feel they are keeping pace with inflation, which official figures show expanded 2.9 percent in the first three quarters from a year earlier. In November, the Consumer Price Index in China even surged 5.1 percent, the highest in 28 months. Under it, food costs climbed 11.7 percent, with fruit prices rocketing 28.1 percent, eggs 17.6 percent, rice 14.7 percent and cooking oil 14.2 percent.

Talking about salaries used to be a taboo subject for the Chinese, but nowadays the issue is generating plenty of comment and even action.

Several strikes have broken out across the country, with workers demanding better pay for their labor in a nation with rapid growth and an equally rampant cost of living.

In July, factory workers with two Japanese companies in Guangdong Province won pay rises after walking off the job for several days.

Atsumitec Co, which produces gear sticks for Honda Motor Co, finally agreed to increase salaries for its workers by 45 percent to 1,420 yuan a month from 980 yuan.

Electronics maker Omron Corp raised salaries by 300 yuan a month and increased benefits for its workers in Guangzhou, who were previously receiving 1,270 yuan a month.

Emboldened by success, workers across the country were expected to demand higher pay, in what some analysts predicted would be a "wave" of strikes.

That did not occur. Unauthorized strikes, which aren't legal in China, didn't break out everywhere. Calm has prevailed, so far.

One could argue that companies that make more profits should share them with employees, after reasonable expenditures on upgrading and expansion.

Strikes are a poor way to force that to happen, and rising wages can have a negative impact on the economy. What would happen if everyone got pay rises even though their employers don't really get more profitable? Companies would be forced to bear the higher costs after passing on what they could to consumers. Those sitting on the edge of profitability might collapse altogether.

What China doesn't need is an inflation spiral fed by wage demands. It can be a vicious circle: as prices go up, employees demand higher pay; as salaries go up, the prices of everything rise. In the end, people may be no better off, and the economic growth needed to provide jobs could falter.

I remember, years ago, looking at a picture in a school history book of people, probably in Germany between the two world wars, pushing wheelbarrows of worthless cash around to buy a loaf of bread. No one wants a repeat of hyperinflation.

So what should people do when faced with rising prices?

Smart people in Guangdong Province reportedly are skipping over the border to buy cheaper daily necessities in Hong Kong. Online shopping also offers an avenue for comparing prices and bargain hunting.

For myself, I just avoid going into shops. I am content to dress in my old sweaters, overcoats and shoes this winter rather than succumb to all the sales gimmicks department stores are using to part me from my yuan. I am keeping my wallet zipped.

I have friends who have stopped taking money with them when they go window shopping. Such are the obvious ways of saving money.

Expenditure on vegetables and meat is hard to avoid, but people can trim their bills by patronizing wet markets instead of supermarkets. Timing also is important to the cost-conscious. Buying at wet markets later in the day is more likely to land you discounts as vendors try to sell off excess stocks before closing time.

Tightening belts

Of course, this kind of behavior flies in the face of national government efforts to spur domestic consumption to counter China's overdependence on exports in this uncertain world. Policy makers would probably get very upset if they found everybody tightening their belts.

If China's authorities don't want that to happen, they need to be resolute in efforts to curb inflation, fend off speculative money and rein in asset bubbles, such as property.

The latest major step in that direction occurred on December 3, when China announced a "prudent monetary stance," which paves the way for further tightening measures, such as interest-rate increases and lending curbs.

Last Friday, the central bank again lifted the reserve requirement ratio, the amount of money commercial banks must put aside as reserves, soaking up around 360 billion yuan on the market. It has been the sixth increase in the ratio this year and the third in five weeks.

The central economic work conference, a high-profile meeting concluded on Sunday which set the tone for next year's broad economic policy, said China will increase efforts to combat inflation while maintaining a stable and relatively fast economic growth.

To forestall unreasonable price jumps, the authorities also adopted administrative measures, such as releasing stockpiles of pork and sugar, demanding harsher punishment for people who speculate in agricultural products, and increasing the supplies of coal, power and oil.

Some economists are proposing to lift the minimum personal income tax threshold from 2,000 yuan a month to 3,000 yuan or higher, which would exempt more of the lowest-income people from paying taxes.

It has been heard that the government is considering a plan to reduce the income tax burden. We await the outcome of this, thinking perhaps that more needs to be done.