Here Comes Inflation

By Huang Zhen

Recently, I met a project manager at a foreign company in Beijing. He is 35, a graduate from one of China's most prestigious universities and possesses nearly a decade of work experience in foreign enterprises.

But he looks a little glum these days. Why? Because he says the recent price increases are affecting his nerves. Frankly, I was confused by this. The company he works for isn't small, and he has a senior position in the company with a decent salary. But if prices these days are inducing worry in him, what about the rest of us?

So I drew up a breakdown of his expenditures. His annual salary before taxes is 480,000 yuan, equivalent 40,000 yuan per month. His wife is a full-time, stay-at-home mother. She has recently begun to complain that prices have risen too much and it's become increasingly difficult to make ends meet. As one can see in the chart below, the remaining 2,000 yuan is barely enough for red envelopes with cash to give as wedding presents or other celebrations, the tradition in China. With the price rises in gasoline, housing maintenance, vegetables and other daily necessities, his life has begun to feel the squeeze.

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