Cost of dying worries the living in Shanghai

PUBLISHED : Monday, 11 January, 2010, 12:00am
UPDATED : Monday, 11 January, 2010, 12:00am

While homebuyers complain about Shanghai's overheated property market, burial sites in the city's suburban areas are at a premium, costing 50 per cent more than housing on a per-square-metre basis.

In the densely populated city, where vacant land is in short supply and becoming more expensive by the day, it is increasingly difficult and costly for residents to find an affordable final resting place for deceased family members.

Even in the city's remoter outskirts, the price of a tomb site of less than one square metre has surged from almost 10,000 yuan (HK$11,360) to 30,000 yuan in the past year - the equivalent of several years' savings for a middle-income earner.

That compares with average housing prices in Shanghai, which hit 20,187 yuan per square metre last month, up 65.3 per cent from a year earlier, according to Shanghai Uwin Real Estate Information.

Typical of those fretting over the high cost of dying is Chen Lanying, a senior citizen in her early 60s, who said the lofty prices of tomb sites had forced her to consider a burial at sea.

'I want to leave an instruction to my children in a will to bury me at sea when I leave the world,' said Chen. 'It will be meaningless and ridiculous if they have to spend thousands of yuan on a grave. It will become a heavy financial burden to them.'

Chen is not alone in venting her frustration at the cost of burial sites. In recent months, several Shanghai newspapers have campaigned on the subject, giving voice to a rising chorus of protest they warn could become a threat to social order.

Almost 80 per cent of the city's 40-odd cemeteries would run out of space for additional plots before 2015, said Qiao Kuanyuan, a professor at the University of Shanghai for Science and Technology.

Tight land supply and rising affluence had pushed up the cost of burial sites, he said, bringing windfall profits to the city's cemetery operators, most of which are state-owned and hold a monopoly on the business.

In Hong Kong, government officials said sites would be identified for the construction of a multi-storey columbarium in each of the 18 districts to resolve a shortage caused by the 'not in my backyard' mindset of many residents.

In its search for large plots of land for cemeteries the government is limited to the New Territories, where more land is available.

Hong Kong will need more than 400,000 niches over two decades and, as such, each of the 18 districts will have to offer spaces for about 20,000 niches.

In Shanghai, breakneck economic growth in the past two decades has increased pressure on the city and local governments to allocate more land for industrial use. Rather than provide more land for cemetery plots, the authorities have begun encouraging people to choose burial at sea.

According to Qiao, the huge price increases in the past year were orchestrated by the government as a way to dent demand for tombs and encourage people to choose other options. Most residents found the hefty price rises unacceptable and said they were motivated by greed.

'The wild rise of prices was groundless and it increased the risk of social disorder,' Qiao said. 'Greater transparency is urgently needed in the process of setting grave prices.'

But Xu Weiqing, an official in charge of public affairs at Jiading district-based Songhe cemetery, said rising incomes were also driving price increases.

'Rich people are willing to spend tens of thousands of yuan to bury their deceased family members,' she said. 'But the short supply of land doesn't allow us to build spacious tombs.'

Under local government rules, a tomb cannot exceed 1.5 square metres. Yet the most expensive sites fetch more than 200,000 yuan.

The major shareholders in the Songhe cemetery include the district government and the city's funeral authority.

In addition to dividends from profits earned by the cemetery, the authorities also receive tax revenues from the sale of sites that run into millions of yuan a year.

Songhe, one of the city's three largest cemeteries, covers an area of 640,000 square metres. It has 180,000 tombs and that number will ultimately increase to 300,000.

'It is not correct to pay out all profits as cash dividends since the cemeteries must reserve cash for renovations and normal operations when they run out of space in future,' Qiao said.

Cemetery operators in Shanghai currently collect an annual management fee of 100 yuan for every tomb, and they were set to increase this charge in a few years, Xu said.

'The focus will be shifted to fee collection as the cemeteries try to offer more value-added services in exchange for maintenance fees,' she said. 'We are in the process of brainstorming and trying to figure out what we can do in future.'

Reno Chen, a white-collar worker at a United States medical equipment maker, said he was surprised by the high cost of burial plots when his father died last year.

'I still made the decision to buy a good place for my father to be buried because I felt better by doing so,' he said. 'A decent tomb for my father makes me feel that he will continue to live in my heart.'

In Shanghai, 80 per cent of the deceased are now buried, although the government strongly advocates sea burials.

The city's funeral authority subsidises 300 yuan each for sea burial, but analysts said the amount was not persuasive enough.

The highly profitable cemetery business in Shanghai has attracted loss-making Vision Tech International Holdings, a one-time electronics equipment trader.

In October last year, the Hong Kong-listed company said it would invest HK$2 billion to open an upmarket cemetery in Jinshan district. The company said it would provide custom-made gravestones.

But Qiao cautioned that cemeteries were culturally significant and should not be seen merely as commercial operations. 'Cemeteries are not just a business providing land to bury the deceased. A well-managed cemetery tells stories of culture, history and ethics,' he said.

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