In the latest Cost of Living survey by ECA International, a leading provider of knowledge, information and technology for the management and assignment of employees around the world, Shanghai has become Asia Pacific’s most expensive location for expatriates for the first time. Globally, the Chinese city has moved into the top ten to 8th position – up from last year’s 18th spot.
“Some may be surprised to see Chinese cities feature so high up the ranking,” said Lee Quane, Regional Director – Asia, ECA International. “It is of course possible to buy many items cheaply in China. However, when comparing cost of living for the purposes of expatriate packages, as we do, we look at internationally recognised quality brands wherever possible in order to make like-for-like comparisons.
Over the past few years the availability in China of these usually more expensive items has increased, pushing up the overall cost of goods in our shopping basket. A strong renminbi has also put upward pressure on costs for many companies sending staff into China.”
A number of factors will impact how cost effectively one nationality will shop in another country. For example, familiarity with local shops and brands, the availability of the brands they buy at home and whether the goods they are used to consuming back home are also popular in the country they are in.
“Our ranking is based on an international spending pattern for comparison purposes. However, a Chinese person buying local products is likely to find the city a lot cheaper and may find other cities to be more expensive for them. In this case they will require an allowance to ensure their spending power is maintained on assignment,” Quane said.
Shanghai is just ahead of Beijing (9th globally) and Seoul (10th).
Hong Kong has become the 4th most expensive location for expatriates in Asia Pacific and is now above Tokyo in the list
Tokyo, which topped the Asia Pacific ranking a year ago has dropped to 7th regionally and 16th globally. Recent economic policies including consumption tax increases have seen the price of items in ECA’s shopping basket rise over the 12 months between surveys. Nevertheless, the significant weakening of the yen during the same period has more than offset this, making items there cheaper now to buy for many converting from another currency.
Seoul, the region’s second highest location a year ago has slipped to third spot although globally it has risen 6 places to rank 10th.
While Singapore has remained steady in the regional ranking, maintaining 9th spot, it has risen 12 spots to 19th place globally. While the Singapore dollar has weakened against the US dollar during that period it has strengthened against a number of other major currencies. Assignees having been relocated from one of these locations into Singapore are likely to require a higher cost of living allowance in order to maintain their spending power.
Australian locations continue to fall down the ranking – a reflection of the weakened Australian dollar as growth there slows. Sydney is 30th most expensive location ranked in Asia Pacific and 57th globally.
Taipei ranks 28th in the regional ranking a small drop from last year’s 26th position. Globally it has risen significantly from 89th to 51st as a number of European and Australian locations in particular have fallen down the list.
