BEIJING, China, Dec. 6 /Xinhua-PRNewswire/ -- According to ECA
International’s Cost Of Living Survey, China’s second tier cities have
experienced a sharp increase in living costs. Living costs for foreigners in
Wuhan, for example, have increased by 6.6% between September 2005 and
September 2006.
(Logo: http://www.prnasia.com/sa/200612061607.gif )
In these locations rapid development continues to drive up consumption,
which has pushed up the prices of goods and services. As a result, the
difference in living costs between first and second tier cities in China is
closing.
"Although cheaper than principal destinations for foreign investment,
such as Beijing and Shanghai, the cost of living in second tier cities is
gradually rising," said Lee Quane, General Manager of ECA International in
Hong Kong. "This is understandable, as the provincial cities absorb more
foreign investment and experience faster rates of economic growth, the
quality and availability of goods and services will also improve. The influx
of higher quality goods and services will therefore have an upward effect on
the cost of living in these locations," added Quane.
Many of China’s provincial cities are now more expensive than other
major cities in Asia. Chinese provincial cities are now more expensive than
major cities such as Kuala Lumpur, Bangkok and Mumbai.
That the cost of living in many cities in China is more expensive than
some major cities in Asia is not bad news. Quane explained, “Companies
sending staff from cities such as Dalian and Shenzhen to Kuala Lumpur,
Bangkok and Mumbai no longer need to apply a cost of living allowance to
ensure that an employee can maintain the same standard of living while posted
there. This means that the cost of assigning staff overseas has become
cheaper."
On the whole, the cost of living in Chinese cities still remains cheaper
than in many places around the world. Beijing, the most expensive city in
China is ranked 108th worldwide, while Xiamen, the cheapest of all Chinese
cities surveyed, ranks 187th worldwide.
ECA International’s Cost Of Living Survey shows that people visiting
Hong Kong will enjoy the lowest living costs since 1990. Continued
depreciation of the Hong Kong dollar against most major currencies means that
expatriates sent to Hong Kong will find their money goes further than before.
Likewise, the depreciation of the yen has made Tokyo a cheaper location for
foreigners and was leap-frogged by Seoul in the cost of living rankings as a
result. “The weak US dollar and its impact on local currencies have had a
bigger effect than inflation on the cost of living indices for many countries
in Asia, and it will be interesting to see how the anticipated decline of the
US dollar will continue to affect them,” said Quane.
Bangalore is the cheapest location in Asia, with goods and services
costing approximately two thirds the price of those in Beijing. Outside of
South Asia, Ho Chi Minh City is the cheapest location, marginally cheaper
than Kuala Lumpur, Vientiane and Manila.
Asian trends
Tokyo has dropped out of the top 5 most expensive world cities for the
first time in five years. Low inflation and the weakening yen are making it
cheaper for foreigners to live there now than in any year since ECA’s survey
began in 1972. The yen has depreciated by more than 10% against the pound
sterling in the last twelve months, with the result that Tokyo has fallen to
10th place in the ranking from third in 2005.
By contrast, living costs for expatriates in Seoul continue to soar, up
15% from 2004, for example, due to the appreciation of the Korean won. The
rise in living costs in Jakarta of nearly 10% in a year for expatriates is
one of the highest in the survey, largely the result of high inflation.
Living costs for expatriates in Bangkok are also higher this year, due to
both high inflation and the appreciation of the Thai baht. In contrast, high
inflation in Vietnam of more than 8% has had no impact on the purchasing
power of foreigners in Hanoi or Ho Chi Minh City, due to a weakening of the
Vietnamese dong.
Most and least expensive locations worldwide
Zimbabwe’s capital city, Harare, is the most expensive location in the
world for foreigners due to inflation of more than 1500% and the recent
pegging of its currency with the US dollar. Luanda in Angola is the second
most expensive location, followed by Oslo, Moscow and Kinshasa in Congo
Democratic Republic, which makes up the top five.
At the other end of the scale Maseru in Lesotho is the cheapest location
in the world, with Buenos Aires, Bangalore, Durban and La Paz making up the
bottom five.
Asia cost of living ranking 2006
Asia rank City Country World rank
1 Seoul Korea Republic 8
2 Tokyo Japan 10
3 Yokohama Japan 13
4 Kobe Japan 20
5 Hong Kong Hong Kong 79
6 Taipei Taiwan 88
7 Port Moresby Papua New Guinea 103
8 Beijing China 108
9 Shanghai China 123
10 Singapore Singapore 132
11 Jakarta Indonesia 142
12 Guangzhou China 149
13 Shenzhen China 156
14 Shenyang China 161
15 Qingdao China 164
16 Dalian China 168
17 Tianjin China 169
18 Chongqing China 174
19 Chengdu China 177
20 Xi’an China 178
21 Wuhan China 180
22 Suzhou China 182
23 Nanjing China 184
24 Xiamen China 187
25 Bangkok Thailand 188
26 Mumbai India 191
27 Hanoi Vietnam 192
28 New Delhi India 194
29 Metro-Manila Philippines 197
30 Vientiane Laos 199
31 Kuala Lumpur Malaysia 202
32 Ho Chi Minh City Vietnam 203
33 Chennai India 205
34 Hyderabad India 210
35 Colombo Sri Lanka 211
36 Kolkata India 213
37 Pune India 214
38 Bangalore India 220
Most expensive cities worldwide
Rank City Country
1 Harare Zimbabwe
2 Luanda Angola
3 Oslo Norway
4 Moscow Russia
5 Kinshasa Congo Democratic Rep.
6 Stavanger Norway
7 Copenhagen Denmark
8 Seoul Korea Republic
9 Libreville Gabon
10 Tokyo Japan
11 Geneva Switzerland
12 Zurich Switzerland
13 Yokohama Japan
14 St Petersburg Russia
15 Basel Switzerland
16 Bern Switzerland
17 London United Kingdom
18 Abidjan Cote d’Ivoire
19 Helsinki Finland
20 Kobe Japan
Cost of living
ECA’s cost of living data compares a basket of 125 consumer goods and
services commonly purchased by expatriates in over 250 locations worldwide.
The data is used by Member companies to calculate cost of living allowances
for expatriates. The survey covers:
Food: Groceries; dairy produce; meat and fish; fresh
fruit and vegetables
Basic: Drink and tobacco; miscellaneous goods; services
General: Clothing; electrical goods; motoring; meals out
Notes to Editors
The above figures were taken from the following survey:
Cost of living survey
ECA International’s cost of living indices are calculated based upon
surveys carried out annually in March and September using a basket of day-to-
day goods and services. The data used above refers to ECA’s September 2006
survey.
Certain living costs such as accommodation, utilities (electricity, gas,
water costs), car purchase and school fees are not included in the survey.
Such items can make a significant difference to expenses but are usually
compensated for separately in expatriate packages.
This comparison of cost of living was calculated on a base composed of
various developed countries and is used to reflect an international
lifestyle. Other indices available from ECA reflect specific city-to-city
comparisons, and different levels of shopping efficiency.
About ECA International ( http://www.eca-international.com )
ECA International is the world’s largest membership organisation for
international human resources, serving a global network of over 4000 HR
professionals in 35 countries. The leading provider of online data, software
solutions and advice for more than 1500 international companies, ECA’s
innovative approach has been providing cost-effective solutions to
international HR management since 1971.
