Beijing, Shanghai overtake HK on expatriate costs
Beijing and Shanghai both leaped more than 20 places to overtake Hong Kong as the most expensive place in China, a human resources agency's global survey of 400 cities found.
Researchers at ECA said it was the first time both Beijing and Shanghai had been significantly more expensive than Hong Kong in the cost of living survey for expatriates. They said the weak US dollar and inflation on the mainland were the reasons.
'The cost of living differential between [mainland cities and Hong Kong] has consistently narrowed since 2007,' Lee Quane, Asia regional director of ECA International, said.
However, all three cities had seen steep climbs in the global ranking, they said, which could mean it was increasingly costly for overseas talent to be relocated to the region.
ECA carries out its survey twice a year, in March and September, comparing a basket of commonly purchased consumer goods and services in about 400 cities worldwide.
In this year's March study, Beijing jumped 28 places to be ranked 20th globally, while Shanghai, previously 49th in March last year, is now 26th. Hong Kong, now 36th, climbing 11 places from 47th, is still more expensive than Manhattan at 40th but cheaper than Paris (34th).
In the top 50 most expensive locations in Asia, the two mainland cities were fifth and sixth, respectively, behind the top four Japanese cities - Tokyo, Nagoya, Yokohama and Kobe. Hong Kong was ninth behind Seoul (7th) and Singapore. Shenzhen and Guangzhou were 10th and 11th.
The last time Beijing and Shanghai overtook Hong Kong in the cost of living survey was in 2009. But Hong Kong climbed back up the rankings in the next two years.
Quane said researchers recorded double-digit inflation in some mainland cities, and this had affected Hong Kong, which partly explained a rise in the city's ranking.
'Hong Kong's inflation is relatively high compared with other developed economies,' Quane said. 'The problem with Hong Kong is that prices paid are significantly affected by what's going on elsewhere.'
Asked whether unpegging the Hong Kong dollar from the US currency would help, he refused to comment.
But he said Hong Kong in recent years had become a cheaper city because of the currency peg to a weak greenback.
Joseph Yam Chi-kwong, former chief executive of the Hong Kong Monetary Authority, sparked heated debate when he published a paper suggesting the dollar peg, in existence for 29 years, could be scrapped. The government said a review was not needed.