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By Chen Hong (China Daily)
Updated: 2007-07-24 09:10

SHENZHEN: After working in this southern boomtown for three years, 26-year-old Liang Hao faces a dilemma - to leave or stay.

The draftsman working for a design company sees a bleak future as housing prices continue to rocket, pushing up the general cost of living.

Special coverage: Housing in China  Related readings:  Beijing housing prices up 10.1% in 1st half  Tax only raises cost of housing  Housing, a too heavy burden

Official figures show the average price for new apartments rose to about 14,200 yuan per sq m ($1,870) in May, nearly 50 percent up from the yearly average of about 9,400 yuan per sq m in 2006. And analysts predict prices will continue to rise.

Liang's salary has risen from 3,000 yuan a month in 2004 to 3,500 yuan today, and his annual bonus, usually about 10,000 yuan, depends on the company's profits.

Renting a 20-sq-m room for 1,000 yuan a month, Liang was told by the landlord the rent in future would be 1,200 yuan.

"Even fast-food shops have raised prices this month because of the price hike in pork and cooking oil, but my boss does not intend to raise my salary," Liang said.

"Sometimes I feel lost in this city. Working at least six days a week, 12 hours a day without overtime pay. I cannot even afford a small apartment."

According to the Shenzhen Statistics Bureau, the average disposable income of residents rose 5 percent year-on-year to 22,600 yuan last year. After deductions for inflation, the actual rise was only 2.7 percent, compared with the 16.6 percent economic growth.

The figure for the first half of this year is slightly better, a rise of 6.4 percent, but is still lower than the 13.2 percent economic growth.

"The growth of personal disposable income has slowed in Shenzhen partly because the base is getting larger," a spokesman surnamed Chen with a Shenzhen research team on urban society and economy, said.

Disposable income is projected to increase by 7 percent before adjusted for inflation this year, Mayor Xu Zongheng forecast in his policy address early this year.

Scholars urged the government to take measures to allow the public to enjoy benefits of the fast-growing economy.

"To the vulnerable low-income group, the government should guarantee their basic living allowance and ensure the salary of workers are at the minimum income level," Guo Wanda, deputy secretary-general of the China Development Institute, a government think tank, said.

"The country, with its strong economy, should set up a comprehensive social security system to boost medicare and education. It should also reduce corporate taxes to help companies offer their employees a fairer deal," Guo said.

(China Daily 07/24/2007 page5)