The New Shanghai
An Expatriate’s Perspective on Living and Working in China’s Largest City
Which do you think would be the easiest city to live in…Tokyo, Seoul, or Shanghai? My reply of Shanghai might surprise you. Having lived in all three cities for periods of over 18 months, Shanghai scores high for quality of life, cost, and survivability.
On my first visit to Shanghai in 2000, while I was living in Tokyo, I was unimpressed. At the time the buzz was that Shanghai was the new Hong Kong and only about 20 years behind. I found it to be a great canvas with little paint on it.
How things change! Four year later I arrived at the world class Pudong Airport, designed by Paul Andreu, to start my new life in Shanghai. As my taxi weaved down the highway from the airport the world’s fastest in service train, The Maglev, flashed by overhead at 400 kilometers per hour.
Shanghai, like Tokyo, has an energy that envelops you. The Shanghainese have an immense pride of their city and there is a genuine feeling that an international city is under resurrection. There is an excitement of being in on the creation. For those with the desire and persistence to succeed the sky really is the limit.
Housing in Shanghai
A year ago the property market could be best described as smoking hot. Buyers according to Jan Flohr, Managing director of Shanghai Phoenix Property Agency, were flipping apartments on a daily basis. The government then put the fire extinguisher on the party with new taxes and tighter control.
Despite the rapid development of Shanghai there are large differences in the types of housing. In the first half of the 20th century traditional shikumen housing, a combination of Chinese and European style architecture, made up around 60 percent of the city’s housing. The 2-or 3-storey (longtang) alley houses have largely been bulldozed and replaced by high rises. There are also old villa style houses in historic areas such as the former French Concession. On the edges of the city are new satellite areas with luxury villas such as the Thames Town development in Songjiang district.
In the downtown area despite a few remaining slums most people live in apartments or old houses. At one time the old colonial style houses in historic areas were cheap after 50 odd years of neglect. However, prices boomed due to demand by foreigners and limited supply. Apartments come in many shapes and sizes.
Compared with Tokyo the living conditions in a modern Shanghai apartment and even in renovated old ones are much better. The living space is larger and offers better value for money. Although Korea has similar accommodations, they are generally in one of four standard Legoland designed blocks. Shanghai, on the other hand, generally has a unique character for each high rise development with a crowning feature at the top of each tower. This makes for a novel and sometimes comical architectural landscape.
While the government may have taken away the punch bowl, it seems as if it forgot to tell some that the party is over. Overall property prices have fallen but in some sectors they have continued to increase. The old property adage of “location, location, location” certainly seems to ring true here, along with what type of property is being purchased.
Is this a good time to buy? Well Sam Crispin, managing director of Crispins Property Investment Management, thinks that the recent falls represent “definitely a short term buying opportunity.” Flohr, however, cautions about what type of property is being bought and where. He warns against buying properties in the suburbs saying that he “would rather buy a small centrally located property than a big property in a suburb.” When buying it pays to check transport links and even if there isn’t a nearby metro line at present whether one is under construction or being planned. Jeanine Andrews (no relation) already owns an apartment which she leases out. She is considering buying an apartment overlooking the Huangpu River, which bisects Shanghai. “In few other big cities can you buy a waterfront apartment so cheaply,” she claims.
Rentals tend to be good value for money. I rent a large 1-bedroom apartment in an apartment complex with security guards in a nice area for RMB3,000 a month. For a reasonable 2-bedroom apartment the rent will be somewhere between 2,700 and 4,500 a month. Unlike Seoul or Tokyo there are no large payments to be made. Typically you will lay out the equivalent of three months’ rent when leasing. This is two months’ deposit plus the first month’s rent. If buying a property as a buy-to-let current returns make it marginal. The return is likely to be in the region of 4-6 percent but mortgage repayments are 5.51 percent.
Whether buying or renting there are some things to be aware of. Firstly, construction standards are not very good. Most buildings are made by farmers who have come to the city in search of riches. They have little idea about construction. 2004 figures show that only 0.5 percent of all the buildings in China are insulated so air conditioning costs are high in summer and heating costs are high in winter. Plumbing and electrics seem to be problematic. Before purchasing or renting any apartment put on all the air conditioners and a few other electrical items to see if the power can cope. Do not rent or buy a ground floor apartment, especially if it is anywhere near the elevator, as this will make it very noisy. In Chinese the number “four” sounds like the word for death. This could present an opportunity as people often avoid the fourth floor.
Work in Shanghai
Foreigners living in Shanghai are largely split into two camps; those on expat packages and those without. Shanghai is the business capital of China. Most multi-nationals have their China headquarters in Shanghai and some even site their Asia-Pacific headquarters here. Their foreign employees were largely employed overseas and come on international salaries with various living allowances for education and transport, etc. Increasingly, however, these companies are recruiting some foreigners in country. The second band and the more numerous are those that come to China under their own steam. Predominantly they start off as English teachers. There are, however, openings in the entertainment and hospitality industries. The more successful end up with their own businesses.
English teaching usually pays in the region of Y120-Y150 an hour, although if skilled it is possible to get 200-plus. There are also numerous opportunities as extras or models in movies and adverts, etc. I was an extra in the Hollywood film The White Countess for six days. Pay can be around 1,000 a day. If you have a good voice, recording work can be lucrative.
Transport in Shanghai
Shanghai as yet doesn’t have a world-class transportation system but they’re building it. Currently there are five open subway and overhead lines. By the time of the Expo in 2010 there will be nine metro lines covering a distance of some 500 kilometers. Come 2020, that will have increased to 17 lines.
The city has extensive bus service but not many foreigners use the buses because they are overcrowded and without Chinese language skills, it’s difficult to navigate the routes.
Taxis are cheap and plentiful except when it rains and at rush-hour. It would be unusual for any journey downtown to cost much more than Y20.
Road traffic is chaotic with pedestrians, carts, bicycles, mopeds, cars, and buses all jockeying for position. It’s a definite case of size matters. Vehicles are meant to drive on the right but go wherever they want, including the sidewalks. One very dangerous rule to be aware of is that vehicles can turn right on a red light. Take great care when crossing the road.
If you want a car it is probably best to employ a driver as the driving style is very different. Driving is poor with vehicles weaving in and out of lanes with little in the way of indication or consideration for others. Some foreigners choose to ride a bicycle, electric scooter, or moped.
You can buy almost anything in Shanghai. Imported items will often be quite expensive. Electronics items, however, are often cheaper than in most Western countries. Genuine brand clothing is far more expensive than in the United States. There is a huge market in fake clothing and also tailors with the ability to copy the latest catwalk creations.
Grocery shopping needn’t be a problem. Shanghai has many large supermarkets including a number of foreign ones. Carrefour, the French hypermarket chain, has nine stores dotted around Shanghai. Wal-Mart, though not new to China, only arrived here last August. These, along with City Supermarket and some local supermarkets, serve up most of your food needs. Whether they will satisfy you or not rather depends on what you eat. If you eat in a Chinese style your weekly groceries will be very cheap (no more than Y200/person). On the other hand, if you cannot live without lots of imported Western foods your shopping is going to be considerably more expensive.
Shanghai has a reasonably good infrastructure. Broadband Internet is common although not particularly fast. Mobile phones (GSM and CDMA systems) are pervasive and the coverage is good. 3G will probably arrive within the next year.
The electrical supply can be problematic. In summer with high air conditioning use there are occasionally blackouts. It is best not to drink the water. Large 18-liter bottles of water can be bought and delivered for as little as Y5. Gas is used for cooking and heating water.
Generally you are free to do as you please. This includes freedom of speech. You can say whatever you like in private. It, however, would not be advisable to protest or wear a free Tibet T-shirt in public. China undertakes thorough Internet censorship often known as the "Great Chinese Firewall." The reality is that while it may restrict freedom in Chinese it generally doesn’t create too much of a problem in English other than slowing the Internet down. At various times it does, however, become impossible to look at sites such as CNN or BBC.
There are a number of English language newspapers available including the China Daily and Shanghai Daily. None are particularly interesting. There are also numerous, mainly monthly, free English language magazines aimed at the foreign community. At present the main ones are the monthly telephone-directory sized That’s Shanghai, semimonthly City Weekend, and weekly SH/8 days. All contain information of interest to local residents such as restaurants, bars, housing, jobs, travel, etc. Most houses can receive CCTV9, the state TV’s English channel. It is also possible to get channels such as BBC World Service and CNN via cheaply available satellite.
The currency in China is officially known as the renminbi (RMB), broken down into yuan (Y), jiao, and occasionally fen. Currently one U.S. dollar is worth almost seven yuan, but you should always check a currency converter such as www.xe.com/ucc/ for fluctuations.