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November 9, 2016
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December 15, 1998
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January 17, 1947
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Approved For Release 1999/ pp8 ? CtDP82-00457R0002007 .JUL Ja it CENTRAL 'IF N E: GROUP !NTELUGE R P)RT COUNTRY C} 4. S SAIE T f ono' v; Ito- t-ion-, Cast oi' Ling, of Foreign S fZ of VaMlo A:s riean Companies, S gha:l 25X1X6 25X1X6 DA: 25X1 X6 DI ST. 17 January 1q,91 PAGES 30 SUPPLEMENT report was prepared at the request of co i t ee -f,presentin.. nine large American firms in 6han(rhf.i. This coninittee was r r (1 :tt ?} t.bt1'! the subject of given ~.inin?~ >ry ~: os given .. . _.- r$fs x3 egiven the fore a -'a of those Ct :`.17aGXa 1. f'. f?= Via,-.-lc to recommend 1?ossi'b e further co-tkDon-.tiOf to meet Jneretased cost. of ii in:`?..,v - ".n order to meet an -,urgent need for a bas-03 for form+ula.tinc company policy _a s ueet "to extra compo3`Lsat .on$ ` o foreign staff to meet the rising cost 'ir?.xtty recourse is rn de to er?tain ;.t29t 5.t 1.. series of town r el ahil?= o., xtese an analogy is drawn which i t is hoped will be generally 3S.t t :e~~.ale -' o the problem of d: us 3Std the E'.3 ia, r: allowance a T7a o Dollar 37, rl sa eimployees o A minimtT_m bas; c, cello,"rar.ce is developed from which .a. b may evolve. the! 1" allowance system for higher salaried emplo-ass -, ' ompa'rat ve :Dr co lists of ._'oo and services co manly Use by A1ilC?ric [ U; j as ?i!. c h tend to support he gs nor al jJ t fa;i &3Z1t: t!2?' are appended. -.oeftl staff f employees have been placed in a re'atively better position to I s'taf'f,, asdx }.cause of ;hea;?' `'tderianda z-or increases in be,.sie expenses `(J"lan -afCY- the war.; This is partially because of the fact c`; t:CY?.C'1Ei.ii.^tea ion to the local ate.ff has '7ol.lo1Pd`ed a cast of living index, to C. Ei .L.?i1 stuff has h i t % been tied to an artificially fi`dit'td.1. exchange of he .S~wrlghai 3 xlxt ipa Gororr ntle monthly Index of the Cost 3's{ ! ?l3.;3 inc rc as n cost o 1- 'r MX1 't an t & the foreign std 0ae a esul J,., contract v i-;h the situation befo-1.1c the -rear, many of the local staff be ter paid. in tiz ~?ms of U.&. Dollars thai a=r ~, the lover ranks of the staa- Y Local staff salaaries for-at a much 7 ar?er proportion of open- c. )9L ,> to November eO 19.. D the, G,, Chinese ? orkers Cost of Liv,.:, lxidex,, which is used as a ctor to at7just Chinese salaries, has in- 501',2,, d uurixzt 'Wile same period the Central Harm; of ChinvVa Index of Iesa1e Prices has increased 4O2 Dur rug this time, the rate of exchance g first the o_n?ran market rate of CE~Gg,I,, 000 to t1 .1. ir1 Decem aer* l~ a5 ?and aral mans rate vs from ;ti reh 1??) has increased 2.35%%,, while the p '- aaaa?_i;,r .i..+sa )OVAW of the ;J6(based on 1937 as T, i) than gone dawn. from 115 ?.n Oac;cxrmber 19611 to T3- 0c,l8l in November l9L these changes are shown in the attached tahla., (Table 1), Document Na, __G1 NO CHANGE in Class ^ DECLASSIFIFO 079or Release 1999/09/08 : CIA-RDP By t _? ? ja ,z C 0 0 .9 n of Chinese xvur4.ars as an ad: a actor in co)nputinj; the salaries Approved For Release 1 /09/08: CIA-RDP82-00457R00020072D)08,42g J.ul;: fJ JAL unan,w this period of b isin,7, loanl costs and falling k}l csh ' :.-_> power the ma for A naoric c'orl;caanics in, Shaul h'.t.3 i have 'ol ceymd diff ;}r 'X.t, ?r rc or f.? .?an fixed a'FStCim of 'rank: n;-. .i i tg A1.lataa?r(e?a $'stM rIS'o e, b;itn the e ceietion of ts.omp"A y 14 ha e f?an e ?" ,k`Z3_. 6. to :i33 with the risin'`..:3s i' fo ei _rners'E subs .,a fence a The 'a `a. o"Jcs eta ,.;:J;!!'] presented in the fa llca~~ nt schedule, (Table U) which z iw F~ consistent poll cy n at'F??'1i)ir " to meet t4e aw~ ~.1.. "it Pr tho forei F:,ra sVit'f, but c; A it id.i, r`, in r'es axeci. to x i. , 1_1`5$,; trends,, T.aB7a"O i 1 tiD3,rt' -"0 e3.?`.It`;ire . paid I.-. fferenoe be:. A 1.1?r 'wBeiXa 1 4 ?zaa 't p! us s by s'ir ,. Ld V3 Bachelors 1LLO." 41C F, .IJS?LW100 if in, tvvaen 19,37 and ,.)6Y faS `. Oli1'Ori r.-:.o I}lua 25,7c? vu t gwar.?- I based oT US ?rS,T}'=f} . U`?, Pc, ,r ba C't)- J ''1r.3J'-. d c''UO .; i.f E's1_ore, S .l2 in ha Ste l.s -R o8'r ''marr :573 GAL " inn ;Iay i t f:: Riff s'.1Qo can a .ow- :.. o f Of pace heaters irroper ty of fires, suppli- ed for employ-, ens I horses No problem of _> :atmoney has arisen so far_, a -D a. i r and r^e -, `ordi ti oning xr ffee$ up to ;yS F, G~ borne onv_.r b Fr 'irm 5nti re 3:%7 nt married mor. faii i 1 a Ire out WIJ)w_ii_es here , WTI 1,I"-20C NI, k,h "0 Oe: i,!,i:;as I.', :t?g, x,,200,, i?sA?.t_`a r child, expeenoc >Ji. i" 4:`e . 'fully r mbt rSe (vr i-ri c h ' o .far the .' F ) *' . 75% for .o d `(or^c staff .rld 7)r?Uca tE nen : 4 Tt~aa or}.arl, ., ,aa':,n 1:1iff er?encea between 19, i t; of octal les -0 and present cost of fuel U?S; 75C, por ts:.a tinhere prsv-iously rent did wll be t.1 Borne Ix nose include heat; o'?t/R At'-~-_: fi,r .,, M_s ierttJrely. paid by Firm pas f re a. s Nor'ne]. quantity of house;' packing (rot ex hold offer?t, x i l be }ceed .n. 1,200, ;,Sacs: red, ;h'' prod at firma hand 1. a n? E.:'fs~c ? .! e e) !.. F 3 n5 e ,) oo I ,. 9.=40 consumption schedule riven h,-,,re, was,, if aaywhin -,~ well below t,hal family of two of any Merit- t irm"s sta;tf?n .0; These consumption expenditures, however , do not include extraordinary fi?ly medical care (such as pre -z ataa), and childbirth, or operations ),, to costa of furniture or repairs for sett. rt up an es t-abli.shemarat or transportation ? : ; t for more than aavora,le minimum seer s o.nal use of buses ;, trams rickshas, occas zoria;l taxis or car maintenaneeo In those reA)eocs the average of the 27 Americana families who a?.ere the subject of the SfGaa study was admittedly below the :itaarad- and of employees of the rnv,4'or American companies o Likewise, clothin& expanditures of Amoric.:. families were below the level of any other n a.tionaal. groups In xxhanghais in the study habitually ;ought owing to the fact that the a iericaarts covered their major requirements in the States and only p ii'c ,cased necessary replaaaoements in Shan,haio This h.owe~rer,, need not affect the conclusions? since that is more than ever the American habit since the waarF and no extra allowance need be made on this accouato ,1.:, in order for an average lower salaried American employee with ?t family to ssib- si_st at the stuns level ;in 1x,;146 as in 191,0, he would have to received a US,': income of from 3-1/9 to 41./s3 times his 19140 income. This may in f' .ct only be realized by the company providing quarters and cov:erin;-' he re::4,iriart< difference Approved For Release 1999/09/08 : CIA-RDP82-00457R000200720008-6 Approved For Rel ul*6$IA9 ~"M-A DP82-00457R000200 25X1A2g ie the employeevs consumption expenditures with an allowance amounting to sainimum of 1J 37C3,_, (i,,e,, approximately twice the total pro-vvaar consumption expenditures in the above taable)a , This figure is derived from the .f'igtn'es in 'is?}) ;Jps 154 .'i,0T131 NG 126: 2 j6 C, COST OF ,.aAVI NGS 40 .U VJ NG The level of consumption possible in November 199146 this extra subsidy awouict not be hither than was supported by the average income before the F;ar, and. no additional saving would be possible without sacrifice f'ro- is Cori of less than this amount would entail d- .razz:; on ressrvssl or sacrifice,, Yl1th. U 37QE, as the bas is ello.;ance of an average :t vaer~ sal cried eripioyee as of November future aad ustments in the allowance may be made for any month 'imply as follows: (1) co.anw~rt the total CN$ consumption expenditures in the ahote table br use of the S.iG Consolidated Index of the Ccsi of Lining of 'Aestern Foreign Sra.s}rIed Employees (adjusted to 19140 as i.~.. o ,ear) J convert the resulting GNU, into '036 Basin; the musth-'end open market ravel (3) deduct the total 1,04 0 }F% income in the above table; (4) deduct the amount of Housing and Taxes derived as l in the above table?, thu= obtaining the current monthly basic allowance v : la.., its has been reco-;nixed in previous systems of aalJ.o+ antes, staff members living under different circumstances have hi her or lower consumption schedules and are therefore entitled to more or less than the basic allovwanceJbA== resident in small apartment= in USA) Junior salary classification Approved For Release 1999/09/08 : CIA-RDP82-00457R000200720008-6 Approved For RelRP,82-004578000200729 a; etrrled tnen- osi ntainina; wife in U 3A s "-'UWO in bi-, IJ. tt"Ei i'tTl?rti, m:,-senior salary classification tdarr? led men- maintaining, Viife and l ozhiii in USA ,onion salary c a>as~7t`iea'.i.o!x. LMarr ied men- xi?aintaininw wife and i chi-IA. in ehina? ea 'a.dent in furnished house- sonia :e= salary c lctssi a aca tic dr - Ltarri ed. men maintaini.n ; wife in China- in s ent umaJ.I house : r3a or wain; cllassi f actiora I'iarria3d men-, xat i.zti n ~r R. f'e and a chi &de i in China ositient in fairly large house=' tea" a x Salary class 195 c, it is suggested that one half a basic allowance applied 1A) the :.uweat sa .azr i ed sraduat,;,d s Vale? plus s eon ai allowances tr ansp (atlo i a- 1d how an a oed cai allowances for men in higher salary &roups as outlined above, would ust these incomes to etcf,a3;" expense reciuirement,so In Table V0 atteacheed, certain examples are g i.ven to illustrate the, ge.;aeral price level in various categories of goods and st,rEr ces In some Ca see ert ., izrar.,crrterd sacred foods., prices are leas in terms of U4 than six months agog, but rises in ? csts of local products and services have more than compensated those few de ceases. Wa,a;ea have advanced especially sharply, while the risks of doing business in an inflationary marke_ and the insecurity of property and life, in over-crowded Shanghai. have adu d to the costs of all items, in this connedtlon 'insurance rates are especially significant as effecting the lives and pocket-, ?:,oc.1cs of all members at' the community,, Athletic activities have in Some cases become prohlbiti--ely expensive an, they are listed here,, not because they are -- i,'enerally indulged in, but to ecaaoplete the general picturery They average con :uua p'' ion of these goods and ser rites by the to es a P nerlcan salary group is included in the ?I:ti scellaneous" item in the table of Average Consumption f,xpenditures ;liven above., and the prices r.s given below, are merely explanatory of the present level of prices of goods and services in common 'consimption in K~)hasn.' hai < Approved For Release 1999/09/08 : CIA-RDP82-00457R000200720008-6 Approved For Release I 999/09/08,, J i,A RDP82-00457R000200720008-6 z4 ?'v 'o t J ' 'r7 t; u,u, , w1,ii; j"L '100 J' .Q .d. U B' -III) US;p (;U,%3 ? (ii ,~ZRIILL.66 v F U +iF} ii#.a.:. ~Ja'sa. r.'.i E.iti s:i'~d'Ld~:s SJ.~t,=..1/d:.:t,:i~ w"a:" ' V- CvA Jc"~ Percent C t l 00st of acSi en r bt;:ic TAcre.,se ihte of Percent increase Open r r . to Of -^'ercexi,t Increase C os t cb 5electod, List cx r