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Beijing now second most expensive location in Asia for expatriate staff

05 Dec 2013


  • Hong Kong ranked 8th in the region and 28th globally
  • Tokyo still Asia's most expensive city, but falls to 10th place globally
  • Caracas, Venezuela tops the global list for the first time

Beijing is now Asia's second most expensive location for international assignees, up from 5th position last year. This is among the findings of the latest Cost of Living survey by ECA International, the world's leading provider of knowledge, information and technology for the management and assignment of employees around the world.
 
While Tokyo still tops the list of the most expensive locations in Asia for expatriates, globally it has fallen to 10th place on the back of a weaker Yen – a significant drop from last year, when it was the most expensive city in the world for expatriate staff. Companies that need to assign staff to Japan can now do so for considerably less than in recent years, despite the country's long period of deflation being reversed earlier this year.
 
Globally, Beijing is the 15th most expensive location for expatriates. Shanghai is in 18th position in the global results, and 4th in Asia. Hong Kong, in 28th place globally and 8th in Asia, is Greater China's third most expensive city.
 
"Although the Chinese government has allowed the Renminbi to appreciate steadily against the US dollar and food and oil prices in China have been rising, Beijing's jump up the ranking is largely due to Japanese locations becoming so much cheaper because of the weaker Yen,” said Lee Quane, Regional Director – Asia, ECA International. "Nevertheless, living costs in Chinese locations have increased in recent years, making China a more expensive location than some of its neighbours for companies looking to set up operations in the region."
 
"Hong Kong's position – up one place in the Asian ranking and four positions globally – has remained relatively stable. As in many parts of the world, inflation here has slowed over the past year while the Hong Kong dollar has not appreciated against the major currencies to a greater extent than other currencies in the region."
 
To ensure that their employees' spending power is not compromised while on international assignment, multinational companies will often include a cost of living allowance in their pay package. Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To assist companies with their calculations ECA carries out two Cost of Living Surveys per year, comparing a basket of like-for-like consumer goods and services commonly purchased by assignees in 440 locations worldwide.
 

REGIONAL HIGHLIGHTS

 

Asia

The difference in the cost of ECA's cost of living basket between Tokyo and Beijing fell from 38% to 8% over 12 months.
 
Singapore has dropped one place in the regional ranking, to 9th place. It is now behind Hong Kong for the first time since 2010. This is largely due to the recent weakening of the Singapore dollar against the US dollar to which the Hong Kong currency is pegged. Globally, Singapore sits in 30th position, also just behind Hong Kong.
 
After Japan, some of the biggest falls in living costs in Asia have been seen in Indonesia – also partly as a result of a weaker currency. Jakarta has dropped 45 spots to 172nd place.
 
Karachi remains the cheapest location surveyed in Asia.
 
"It's important to remember that certain living costs, such as accommodation rental, utilities, car purchases and school fees are not included in our cost of living basket," continued Quane. "Because these costs are usually addressed separately by an expatriate's employer, we collect this data separately. But if we were to include such costs, Hong Kong and Tokyo would be higher in the ranking, while Beijing would be significantly cheaper due to lower housing costs."
 

GLOBAL HIGHLIGHTS

 

Americas

The Venezuelan capital, Caracas, is currently the most expensive place in the world for expatriates. Prices for items in ECA's shopping basket there have gone up by over 60% on average since last year. However, this may be short-lived, as pressure is building on the currency, which could well be devalued in the near future.
 
Manhattan is the region's second most costly location, and sits in 33rd position globally. Vancouver is in 5th position in the Americas and 53rd globally.
 
Within Latin America, Caracas is followed by Haiti (57th globally) and Buenos Aires (61st). Brazilian cities have fallen dramatically in the ranking, with Rio de Janeiro falling 66 places to 130th worldwide. The sharp depreciation in the Brazilian Real over the past 12 months has made Brazil considerably cheaper for many expatriates.
 

Europe

Norway's capital Oslo remains Europe's most expensive city for expatriates and the third most costly in the world. With the exception of Moscow, the region's top ten is dominated by Western European cities in Switzerland, Scandinavia and Finland. The strengthening of the euro against the dollar over the 12 months between surveys has contributed to significant climbs up the ranking for Dutch and German locations. Turkish cities have seen some of the region's more significant falls, due largely to the depreciation of the Lira.
 

Middle East

In the Middle East, the most expensive locations for expatriates continue to be the Israeli cities of Tel Aviv, ranked 24th globally, and Jerusalem (27th). They have both climbed even further up the ranking this year due to the strengthening of the Shekel against other major currencies. In the United Arab Emirates, the price of items in ECA's cost of living basket for expatriates has gone up significantly and both Dubai (171st globally) and Abu Dhabi (180th) have also risen in the ranking.
 

Africa

Angola's capital, Luanda, is Africa's most expensive city and the world's 2nd most expensive for expatriates. It is followed by Juba, Brazzaville and Libreville - all of which also feature in the global top 20. The cost of goods typically purchased by international assignees in these locations are likely to be high due to import and transportation costs. Maseru in Lesotho is the cheapest location not only in Africa but worldwide. The significant depreciation of the Rand has contributed to the lower positions of South African cities and locations in countries where the currency is tied to the Rand, including Lesotho.
 

Australia

Sydney and Canberra, both in the top 20 most expensive locations in the world for expatriates a year ago, are now ranked 31st and 39th respectively. All locations in Australia have become cheaper due to the weakening of the Australian dollar against most major currencies.
 
ENDS
 
Prices of some sample items from ECA International's basket of goods and services commonly purchased by expatriates, in U.S. dollars
 

LOCATION

Can of soft drink (50cl)

A dozen eggs

Beer at a bar (50cl)

Bananas (1kg)

Fresh milk (1L)

Bread (1kg)

Hong Kong
1.21
6.48
9.18
1.61
3.56
5.15
Tokyo
1.58
5.3
9.7
5.53
2.62
6.33
Beijing
1.2
4.97
9.28
3.1
4.17
6.76
Shanghai
0.83
5.2
10.34
3.4
4.35
6.58
Singapore
1.25
3.56
13.47
1.73
2.67
4.14
Taipei
0.97
3.85
8.41
3.16
2.81
4.97

 

Notes to Editors

Figures used in this release were taken from ECA's Cost of Living Survey.
 
Follow ECA on twitter: https://twitter.com/ecaintl  
 
ECA's blog, MoneyMoves, provides updates and commentary on currency, inflation and expatriate cost of living. Follow the blog here: http://ecamoneymoves.com/
 
ECA’s other blog, wanderingmark, is written by its International Data Researchers who report back on places they visit to monitor and research cost of living: http://ecaintlblog.wordpress.com/
 
 

About ECA's Cost of Living Survey

ECA International's cost of living indices are calculated based on surveys carried out annually in March and September using a basket of day-to-day goods and services. The data used above refers to year-on-year movements between ECA's September 2012 and 2013 surveys.
 
The data is used by ECA clients to calculate cost of living allowances for assignees. 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
 
Certain living costs such as accommodation rental, utilities charges (electricity, gas, water), car purchases 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.
 

GLOBAL AND REGIONAL RANKINGS

 

Top 50 most expensive cities worldwide for international assignees

 

Country

Location

Global rank 13

Global rank 12

Venezuela
Caracas
1
7
Angola
Luanda
2
4
Norway
Oslo
3
3
South Sudan
Juba
4
14
Norway
Stavanger
5
8
Switzerland
Zurich
6
9
Switzerland
Geneva
7
10
Switzerland
Bern
8
11
Switzerland
Basel
9
12
Japan
Tokyo
10
1
Denmark
Copenhagen
11
17
Russia
Moscow
12
15
Congo
Brazzaville
13
29
Finland
Helsinki
14
28
China
Beijing
15
21
Japan
Nagoya
16
2
Gabon
Libreville
17
30
China
Shanghai
18
25
Sweden
Stockholm
19
19
Japan
Yokohama
20
5
Korea Republic
Seoul
21
22
Congo
Pointe Noire
22
33
Japan
Osaka
23
6
Israel
Tel Aviv
24
46
Papua New Guinea
Port Moresby
25
13
Sweden
Gothenburg
26
34
Israel
Jerusalem
27
54
Hong Kong
Hong Kong
28
32
France
Paris
29
43
Singapore
Singapore
30
31
Australia
Sydney
31
16
Azerbaijan
Baku
32
40
United States of America
Manhattan
33
37
Senegal
Dakar
34
49
Germany
Berlin
35
52
Nigeria
Abuja
36
35
Nigeria
Lagos
37
39
China
Guangzhou
38
57
Australia
Canberra
39
18
China
Shenzhen
40
61
Korea Republic
Busan
41
53
Russia
St Petersburg
42
45
Guinea
Conakry
43
97
Chad
N'Djamena
44
71
Australia
Melbourne
45
23
Australia
Adelaide
46
20
Australia
Perth
47
24
Belgium
Brussels
48
63
United States of America
Honolulu
49
51
United States of America
New York
50
50

Most expensive locations in Asia for international assignees

 

Regional rank 2013

Location

Global rank 2013

1
Tokyo
10
2
Beijing
15
3
Nagoya
16
4
Shanghai
18
5
Yokohama
20
6
Seoul
21
7
Osaka
23
8
Hong Kong
28
9
Singapore
30
10
Guangzhou
38
11
Shenzhen
40
12
Busan
41
13
Ulsan
51
14
Taipei
69
15
Dalian
79
16
Tianjin
90
17
Qingdao
91
18
Chongqing
104
19
Kaohsiung
110
20
Suzhou
112
21
Chengdu
113
22
Wuhan
116
22
Xiamen
116
24
Nanjing
119
25
Xi'an
120
26
Bangkok
170
27
Jakarta
172
28
Vientiane
187
29
Dhaka
198
30
Kuala Lumpur
200
31
Yangon
202
32
Chiang Mai
206
33
Metro-Manila
207
34
Phnom Penh
215
35
Surabaya
217
36
Hanoi
221
37
Ho Chi Minh City
223
38
New Delhi
228
39
George Town
230
40
Colombo
235
41
Mumbai
237
42
Ulaanbaatar
240
43
Bangalore
244
44
Chennai
246
45
Pune
247
46
Kathmandu
248
47
Kolkata
250
48
Hyderabad
252
49
Islamabad
253
50
Karachi
256

 

About ECA International (www.eca-international.com)

Recognised since 1971 as a world authority in its field, ECA is a leader in the provision of knowledge, information and technology to inform, guide and support managers handling compensation and benefits for international workers moving around the world. ECA offers organisations of all sizes an unrivalled portfolio of data, calculation aids, salary management software, reports, guides, surveys and consultancy to help them structure and manage their international rewards programmes for long-term, short-term and permanent moves.

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