Mental Ruts of a Financial Nature

Humans are such creatures of habit. Take, for example, the matter of salary. In the States it’s always a yearly figure. I have a good idea of how an American can live in $50k a year, or $75k a year, or $100k a year, etc. Likewise, salaries in China are always given per month. I have a good idea what it means to live in China on RMB 1k per month, RMB 5k per month, RMB 10k per month, etc. However, if an American asks me about Chinese yearly salaries, or a Chinese person asks me about American monthly salaries, I am thrown for a loop every time. I have to do the calculations. I don’t have a “sense” for it because I’m not in the habit of thinking about the figures that way. It’s really quite annoying.

Maybe I’m the only one that will ever use it, but I’ve made a little conversion table based on the current conversion rate of US$1 = RMB7.7743. (Numbers rounded to the nearest unit.)

USD/year RMB/year USD/month RMB/month
$1,544 ¥12,000 $129 ¥1000
$4,631 ¥36,000 $386 ¥3000
$7,718 ¥60,000 $643 ¥5000
$15,435 ¥120,000 $1,286 ¥10,000
$23,153 ¥180,000 $1,929 ¥15,000
$30,871 ¥240,000 $2,573 ¥20,000
$40,000 ¥310,972 $3,333 ¥25,914
$50,000 ¥388,715 $4,167 ¥32,393
$75,000 ¥583,072 $6,250 ¥48,589
$100,000 ¥777,430 $8,333 ¥64,786
$150,000 ¥1,166,145 $12,500 ¥97,179
$200,000 ¥1,554,860 $16,667 ¥129,572
$500,000 ¥3,887,150 $41,667 ¥323,929
$1,000,000 ¥7,774,300 $83,333 ¥647,858

The chart also reveals a shortcut that the non-mathematicians among us may not have been aware of: if you increase the RMB monthly salary by 50%, you get very close to the annual dollar salary. Conversely, if you decrease the annual dollar salary by one third, you get close to the monthly RMB salary. (This would work more precisely if the conversion were still 8 RMB to the US dollar.) Anyway, this might be useful to some people. I should have noticed this long ago.

20 Comments to “Mental Ruts of a Financial Nature

  1. Shaun says:

    Is it true across the board that all Chinese think of their income in monthly figures? How about the people that work a different number of hours each week?

    In the states it is common to either user yearly salary figures or hourly wages. I think it really depends on the type of job you have. Many blue collar jobs pay by the hour. Ask somebody working in retail how much they make a year and they’ll have to break out a calculator. Ask an executive or a person with a fixed salary how much they make per hour and they can’t

    Strangely enough I see this often. Many people I know hold desk jobs with fixed hours, yet they are paid hourly. I’ve always been paid a salary so comparing incomes is not easy without some calculations.

  2. ash says:

    Shaun, perhaps the Chinese are used to talking about their monthly salary as back in the ol’ days they would get paid by their dan wei regardless of hours worked. Probably the same today for a lot of people too.

  3. Tuur says:

    Thanks for the 50/33 percent tip: I’ll probably use it the next time one annoying U.S. yearly incomes pops up.

    Being a Belgian Chinese wages have of course never been any problem to me: Belgium is also a civilised country so we too think in months. Besides, there are about ten yuan to a euro which is about as easy as arythmetic gets :-)

  4. Lantian says:

    People still ask you that huh? I usually just say you can’t compare and I throw out the example of the US$ 400,000 house versus a US$40,000 apt in China.

    Chinese people do sure seem fixated on the question though, they often try to pin me down to an exact figure, like saying $1,000 US dollars?

    The few times that I’ve thrown the question back at people I noticed they are extremely skilled at dodging the question themselves.

  5. Ben says:

    Europeans all think in months..

    Actually the only place I’ve heard people talk about their yearly salary was America.

  6. Wilson says:

    Awesome, John. These are the kinds of lifestyle details I really find fascinating on Sinosplice. Now, if we could get photos of each income bracket and what a “middle” vs “high” “class” lifestyle is for an expatriate living in the boom-boom city called Shanghai. A project for someone(s) in the Sinosplice Network, yeah?

  7. Jeff 傑夫 says:

    So what does an average Chinese professional make per month in China? Say, a professor, doctor or lawyer in a big city somewhere.

    Ballpark figures.

  8. Richard says:

    Hmm. I wonder if Europeans and Chinese don’t have to do yearly income tax calculations. I know that would be a strong reason for why I would think of my salary in yearly terms.

  9. kmk says:

    Ben is right. I live in France and I know some other countries around in Europe. In the common language we use monthly salary figures but use yearly figures only on a resume (curriculum vitae) or to maintain high professional status. I worked in UK and in Australia and it was all about monthly salary. I also worked in Canada and US and it was about yearly salary or weekly salary. As this notion seems to be linked with american culture, yankees should watch excessive ethnocentrisme with it.

  10. Blake says:

    I think it’s interesting (and makes perfect sense) that you’ve calculated your table based on RMB per month up until 20,000. But after 20,000 RMB/month, you switch to basing the numbers around American yearly salaries from $40,000 and up.

    It makes sense because most of your friends in China probably are making 20,000 RMB and lower per month, and most of your friends in the States are probably making 30 or 40,000 and up per year.

    What I find more difficult to guestimate, however, is explaining to young Chinese friends what the equivalent salaries for different countries might be. You can’t just look up the equivalent purchasing power parity because of the differences in culture and spending habits. For example, I know young people here who fully support their parents, and I know young people here whose parents are buying homes for them before they reach 24. I think 5,000RMB is a good just-out-of-college salary in Beijing, maybe equivalent to 35,000 US, but I rarely find that my friends’ salaries here, at least for those in their twenties, determine their lifestyles.

  11. Greg Pasden says:

    I think some of us are missing the easiest way to calculate our income and how to easily convert it to a standard of currency most of us are familiar with… The Big Mac (McDonald’s 2 all beef paties, special sauce, lettuce, cheese burger on a sesame seed bun).

    I think if you are asked how much you make, just tell them how much it is in Big Macs… Then watch their reaction. It might be entertaining in China… especially at the markets

  12. This is interesting.. as most of hte US salary figures are off the scale for Chinese wages. What is average salary these days? 1000-1500 RMB depending on location?

    3000-5000 RMB for a college grad?

    How many ppl make 30 – 40,000 RMB a month in a PRC based company?

  13. Seth says:

    Salaries in Singapore are also thoughts of in monthly terms. Perhaps this is just an Asian thing?

  14. Wow, this is really helpful! I am in the middle of finding a job in China, and all of them are monthly salaries RMB. And they are all western companies! Quite annoying but this helps! Thanks!

  15. I’m with Greg here. But with a little different slant.

    Just express it with beers. Qingdao (tsingtao for you Wade Giles fans) is 4 rmb a bottle. If you make 400 RMB a month (an accurate average for a fuwuyuan), thats 100 beers…. (joking)

    Actually, when people ask me I usually respond that I make 50 USD per day. This is the amount of my per diem (horribly low) I receive. If pushed, I always proffer the printed statement…..

    You mianzi zhe ge fangfa.

  16. Turtlewind says:
    I think 5,000RMB is a good just-out-of-college salary in Beijing

    That’s a very, very good wage for a new graduate, even if they got a good degree from a top university. A good salary is closer to 3000, or maybe even less.

  17. dace says:

    Starting salary for a factroy worker is about RMB 1,000/month in Hangzhou, 2,000 for a new college grad. Unfortunately it doesnt get much better too quickly, as I know most of my colleagues are still only making around 2,500/month after several years work.

    Oh yeah, as mentioned above, we mainly talk in terms of monthly salary in Australia. Again, here we also speak in terms of monthly salary, and no one gets paid for doing overtime.

  18. pepe says:

    No matter monthly or yearly, I’m just looking forward to a salary.

  19. Sonagi says:

    kmk wrote:

    “I worked in UK and in Australia and it was all about monthly salary. I also worked in Canada and US and it was about yearly salary or weekly salary. As this notion seems to be linked with american culture, yankees should watch excessive ethnocentrisme with it.”

    Not sure where this generalization is coming from. John made references to both monthly and annual salaries. I know my annual salary because teacher salary scales list yearly, not monthly, salaries. However, I am paid monthly and pay bills monthly. Now that I am living in a different state, I pay higher taxes, so I actually take home less each month even though my annual salary is higher than at my previous job! Thus, when I think “salary,” I think of my monthly disposable net income after taxes.

  20. Tim P. says:

    How hard is it to multiply by 12? Or divide by 12? The RMB:USD is a little harder to calculate, I’ll grant you.

    Hourly wages, for a ballpark figure in the US, is to multiply the hourly rate by 2000. (Actually, the number is 2080 = hourly rate x 40 hrs/week x 52 weeks/yr)

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