Hong Kong up 26 places in list of costliest cities for expats
Proximity to the mainland means that companies are still keen to expand here
- Yes: 86%
- No: 14%
Hong Kong has risen to become the 32nd most expensive city for foreign employees, surpassing Manhattan and Paris, in a survey of 400 locations.
Even so, companies were not letting up on staff expansions in the city, because of its proximity to the mainland, human resources company ECA International found in its study.
The findings came from a cost-of-living survey comparing a basket of 130 daily goods and services in September. But it does not include housing costs, a significant factor in Hong Kong, where already high property prices have increased by 20 per cent or so this year.
Hong Kong rose from its global ranking of 58th a year ago. Yet it remained in ninth place compared with other cities in Asia, the same as last year.
"Hong Kong remains regionally competitive," Lee Quane, ECA regional director of Asia, said yesterday.
Manhattan and Paris were ahead of Hong Kong last year, but their rankings of 36th and 42nd this time put them behind it.
Goods and services in Hong Kong were 6.7 per cent more expensive than a year earlier, the survey showed.
Quane said the Hong Kong dollar's peg to the strengthening US dollar was one reason it had become more expensive to send employees to the city compared to European locations. Also, Hong Kong was more affected by inflationary pressure because it imported many items, he said.
Beijing and Shanghai were even costlier, shooting up at least 13 places to rank 22nd and 26th, respectively.
Price inflation in the basket of goods on the mainland stood at 5 per cent, much higher than in North America and Europe. That led to several Chinese cities becoming more expensive than traditionally costly places such as Paris. But it does not seem to have stopped companies from sending employees to Hong Kong or the mainland.
"More companies are increasing their staff numbers there," Quane said.
The expansion in staff strength was most pronounced in the financial services, accounting, banking and legal sectors.
Tokyo held fast in first place, the same ranking as last year, while Singapore ranked 31st.
The survey is carried out twice a year and does not cover items often included in expatriate packages, such as rent and schooling. The basket of goods includes groceries, drinks, tobacco, clothing and electrical goods.
An ECA survey last year found that expatriates in Hong Kong receive the fourth-highest pay packages in Asia but the lowest salaries. Of the US$231,000 average value of an expatriate package, just 35 per cent was salary.