China Watch Blog has learnt that strong currencies are pushing up the cost of living for expatriate staff assigned to Asia, with the latest survey showing it is more expensive to live in Shenzhen and Guangzhou than in central London.
“The strengthening of Asian currencies is the dominant factor contributing to the region being more expensive for visitors than it was 12 months ago,” said Lee Quane of ECA International.
“In that period, the yuan has continued to strengthen while the yen has appreciated by almost 8percent against the US dollar. Many Western currencies, including sterling, the euro and Swiss franc, have weakened. As a result, people coming from these economies into Asia will notice a considerable difference in costs.”
Tokyo remains the most expensive location in Asia. Beijing and Shanghai are rapidly moving up the list, surpassing Singapore and Hong Kong.
Hong Kong is Greater China’s third most expensive city, sitting in 36th place globally, and also significantly ahead of central London. Within Asia, Hong Kong is the ninth most expensive location for international assignees, behind Beijing and Shanghai at Nos5 and 6.
Shenzhen and Guangzhou sit just behind Hong Kong at 10th and 11th place respectively in the Asian rankings. They are 55th and 56th in the world, compared with London, which is 62nd.
“A year ago the cost of purchasing goods and services in ECA’s cost of living basket was almost 10percent more expensive in London than when purchasing the same items in Guangzhou, and 15percent more than in Shenzhen,” Quane said.
“Now the cost of living in these cities for international assignees is approximately 1.5percent and 2 percent more, respectively, than in London where, unlike in the mainland, prices have increased at a much slower rate than the year before and sterling has depreciated against many major currencies.”
Globally, the rapid rise of Beijing and Shanghai has seen both cities overtake a number of locations in Australia, Brazil, Europe and the United States, including Rio de Janeiro (31st), Paris (34th) and Manhattan (40th).
Tokyo is the most expensive location both in Asia and the world and Japanese cities occupy the top four places in Asia.
Beijing’s move up the global rankings has also been dramatic: it is now the world’s 20th most expensive city, up from 48th place in the same survey last year.
While Hong Kong has remained in ninth in the Asia rankings, the city has climbed back up the global ranking following last year’s fall.