China on ($67) a Day?
I can’t believe I forgot about the exchange rate. I’ve had this thought many, many times since October, when I moved to Shanghai for a year of dissertation research. As someone whose income comes in dollars but whose expenses get paid in renminbi (RMB), the falling exchange rate increasingly feels like a force working against my $1500/month stipend. This is even more true when you add in the effect of inflation, which is hitting everyone here, not just foreigners; my local dumpling restaurant has raised prices twice in the four months since I arrived. Americans in China—myself included—have long operated on the assumption that life here is cheaper than in the U.S., but what I’ve realized during this, my fourth stint living in the country since 2005, is that I need to abandon that assumption, especially in a city like Shanghai (Asia’s 7th-most expensive city). More and more, the costs of living here are on par, and in some cases above, those in the U.S., Western Europe, and Japan.
When I arrived in Beijing to study Chinese in February 2005, the exchange rate was fixed at 8.2RMB/dollar, but just before I returned to the States six months later, the Chinese government moved to a “managed floating exchange rate.” Since then, although some American politicians still like to bang the drum of labeling China a currency manipulator, the truth is that the dollar-RMB exchange rate has been on a downward trajectory. It’s now hovering at around 6.2RMB/dollar.
I knew this, but of all the things that I worried about when writing grant applications in the fall of 2011, China’s monetary policy and inflation rates didn’t even cross my mind. I had more immediate concerns: whether or not my research proposal sounded feasible (and indeed, if it was feasible); whether or not I had sent my advisor all the materials he would need to write recommendation letters for me; whether or not I had marked down the correct deadlines for applications. Every grant organization asked for a tentative research budget, but there was no question that I would ask for the maximum amount offered, and the big challenge was to get the math right. Most of the grants (including the one I was fortunate enough to receive) had a top award of $20,000, which I worked out to a monthly budget of $1500 for household costs, administrative fees at the institute where I’m an affiliated scholar, and research expenses like photocopies and book purchases, with a couple thousand dollars to cover plane tickets and visas.
That $1500 I’d budgeted gets a little bit tighter with every drop in the exchange rate, though it’s certainly still a livable amount for a single women with a fondness for dumplings and a nose for inexpensive coffee. (My tip: commandeer a table at IKEA and enjoy the bottomless cup, free on weekdays with a member card – forget about Starbucks.) It would be wonderful if grant agencies were to consider the fact that the cost of doing research in China is increasingly on par with those of Western Europe and Japan and adjust their awards accordingly. For pricey cities like Shanghai and Beijing, a monthly stipend of $2000 is probably more realistic than my $1500. Above all, fellow grad students, don’t make the same mistake I did: if you’re planning a research year here, remember that almost everything, especially the cost of living, is changing quickly in China these days.
Maura Elizabeth Cunningham
PhD Candidate, Department of History
University of California, Irvine
Visiting Scholar, Shanghai Academy of Social Sciences
Image: Chinese currency. Wikimedia Commons.
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Unfortunately for those planning fieldwork in summer 2013, the yuan continues to gain against the dollar, though futures markets are indicating it will rebound later in the year. Rates are down to around 6.13 this week, and may go lower in the next few weeks. Do a news search for chinese yuan for latest news.