The story appears on

Page A12

March 8, 2011

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Economy

Hopes for a better standard of living

Amy Hu, a 30-year-old Shanghai office worker, and her mother's maid Xu Yanxia, a 32-year-old migrant from Henan Province, may not share a common background or status, but they do share the same dream of a better standard of living.
Both women are among millions of Chinese watching the current annual sessions of China's parliament and political advisory body to see what kind of policies are enacted to fulfill the pledge of their leaders to focus on "people's happiness."
One of the things that would make Hu happy is enactment of a proposal lifting the minimum tax threshold. That would put more money in her pocket and also assist the government's efforts to encourage more consumer spending and steer the national economy away from over-reliance on exports.
For Xu, the focus is on inequalities that exist for those who form the backbone of Shanghai's work force but aren't accorded the same residency rights as city natives.
Xu, just one of about 240 million farmers-turned-workers in China, knows nothing about macro-economics. She only knows that she still lives near the edge of poverty, even after leaving her husband and children back in their rural hometown to come to Shanghai and try to make more money.
She moved to the city three years ago and found work as a domestic helper. The pain of being separated from her family is keen, eased only by dreams that one day the family might be reunited in Shanghai and build a better life for themselves.
"I don't have to struggle to make a living in Shanghai as people do in my hometown," Xu said. "But I am not happy here."
She's not among the poorest of the poor in Shanghai. Xu earns as much as 5,000 yuan (US$761) a month by taking care of her employer's grandchildren and helping with the housework. She is given a room and meals by her employer. She is frugal and sends anything she can save back home to her family.
Still, she does not have hukou in Shanghai, the all-important permanent residency card that would entitle her to buying a subsidized public housing unit, having medical services largely covered by government funds, and gaining access to unemployment benefits, pensions and other social welfare programs that lead to a more secure future in the city.
One month ago, Shanghai and other cities announced the toughest measures to fight against speculation in the housing market. The new rules rattled the nerves of Xu, who is definitely not a speculator but at the same time is banned from buying a place to live in Shanghai if she wanted to.
The Shanghai government now requires potential home buyers who don't have hukou to provide evidence of having a job in the city and paying taxes for more than a year. It makes people like Xu still feel like "outsiders."
To Xu's delight, recent remarks by Premier Wen Jiabao lifted her hopes of better times ahead. During an online exchange with the public ahead of the annual sessions of the National People's Congress and the Chinese People's Political Consultative Conference, Wen said the government will promulgate more policies to help rural people receive employment, education, medical services and other social benefits.
Efforts will also be made to address practical problems facing rural migrants who work in cities. Wen said the government is mulling measures to reform the hukou system and will fight discrimination that many farmers-turned-workers and their children face when trying to get jobs, attend schools and obtain skill training.
Good education
Xu's dream is to establish a solid footing in Shanghai so that her family can join her and her children can get a good education. That, to her, is "happiness."
As for her employer's daughter, Amy Hu's dream is to have a more comfortable life in Shanghai and get more value out of her monthly salary.
The proposed change in the income tax structure is one concrete proposal that has captivated her and has also drawn much public attention.
The State Council, China's Cabinet, discussed a reform draft of the proposal last week and submitted it to the NPC for further review. No details have been made public, but speculation is rampant that the current minimum threshold of 2,000 yuan (US$304) a month will be raised to 3,000 yuan or even 5,000 yuan. That means lower-income earners would be paying less taxes.
Everyone in China is familiar with all the stories about the nation's burgeoning millionaire class, but the weight of taxation still falls on those least able to pay.
According to Xinhua news agency, China's tax regime is distorted. About 63 percent of income tax revenue in China came from low- and middle-income earners last year, compared with the United States, where the top 10 percent of taxpayers contributed 71 percent of revenue.
"If you consider it from an economic perspective, bringing relief to this lower group of people can help expand China's domestic demand and consumption," said Huang Renwei, vice president of the Shanghai Academy of Social Sciences. "They have the capacity to lead a better life, and they will spend if they feel secure enough to spend."
As a "white-collar" office worker at a trade company, Hu earns about 7,000 yuan a month.
She is married and has a two-year-old child. She, her husband and her daughter live under the same roof with her parents, which has saved a lot of money for Hu. But still, it's getting harder to make ends meet, considering the costs of raising a child, paying for daily necessities and satisfying the needs of a young couple for some entertainment.
Food inflation
Living costs in Shanghai have been soaring, with food inflation alone near 10 percent in recent months.
Hu said she figures that a rise in the income tax threshold would put an extra 150 yuan to 300 yuan in her pocket every month.
"It is not a very big sum," she said, with a slight smile. "But at least it would show that the government is aware of our problem and is taking steps to address it. I would hope we could expect more such moves in the future."
Consumer spending has been on the rise. Retail sales in China last year rose 18.4 percent from a year earlier to 15.4 trillion yuan. That accelerated from a 15.5 percent pace a year earlier.
But with the fading effects of China's "old-for-new" program, which subsidized the purchase of new home appliances and gave a big boost to retail sales, domestic demand needs some new stoking to keep it at the forefront of economic growth.
Addressing cost-of-living concerns and especially glaring disparities between urban and rural dwellers is one way to boost domestic demand in the longer term, Huang said.
Besides the obvious benefits of giving people more money to spend, these policies can instill renewed public confidence, a key factor in consumerism.
The Shanghai government recently lifted the minimum monthly wage by 14 percent to 1,280 yuan, effective next month. That's the highest anywhere in the country. Also, the minimum hourly wage in Shanghai will be raised to 11 yuan from 9 yuan.
The signs of improving standards of living are slowly appearing.
But what Xu and Hu are now hoping is that the government announces some more dramatic steps forward in that process.



 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend