Income gap widens between Beijing, Shanghai

14:39, July 19, 2011      

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Differences in income for residences of Beijing and Shanghai, two of China's largest cities, have become greater over the last ten years, China Daily reported Tuesday.

The wage gap is partially the result of variable economic structures found in both cities, as well as the willingness (or lack thereof) of residents in both cities to buy goods and services.

The capital's annual income and consumption levels are both lower than Shanghai's and have been increasing more slowly, according to the Annual Report on the Analysis of Beijing Society-Building, also known as the Blue Book of Society Building, which was released by the Chinese Academy of Social Sciences on Monday.

According to statistics from the blue book, the annual average disposable income for urban residents in Beijing was 17,653 yuan (2,715 U.S. dollars) per person in 2005, just 992 yuan less than that of Shanghai. In 2009, the difference became greater, increasing to 2,100 yuan.

"The income difference between the two cities is understandable, because there are more state-owned enterprises in the capital," Lu Hanlong, a professor of sociology from the Shanghai Academy of Social Sciences, was quoted as saying.

"They (state-owned companies) offer more stable salaries, while more international private companies, which offer better benefits, have been started in Shanghai," Lu said.

"With more private companies and international enterprises opening offices in Shanghai, incomes and labor costs have risen alongside the rapid economic development and improved welfare system seen in the city," said Lu.

Lu said that increased consumption in Shanghai and the appearance of more luxury brands in the city have led to a higher cost of living.

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