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Expatriate living costs soar in Chinese cities

Updated: 2012-06-15 09:13
By Li Woke ( China Daily)

If you think it is expensive living as an expatriate in a major Chinese city, you'd be right.

According to Mercer, the US consulting firm, major Chinese cities have now moved ahead of some of the more recognized costliest cities of the world to live in for foreigners, including New York, Paris, Rome and Los Angeles.

Chinese metropolitans Shanghai and Beijing now rank 16th and 17th, and Shenzhen and Guangzhou in the south 30th and 31st, according to Mercer's latest Cost of Living Survey, while New York is ranked 33rd.

"The combination of increased prices on goods and a strengthening yuan has pushed Chinese cities up the ranking. Continued high demand for accommodation has also led to moderate increases in rental costs," said Nathalie Constantin-Mtral, the principal at Mercer responsible for compiling the list each year.

According to the rankings, Tokyo is the world's most expensive city for expatriates, pushing Luanda, Angola, down to second place. Osaka is third, Moscow fourth and Geneva fifth.

Singapore and Zurich share sixth place, while Hong Kong retains its ninth place.

There are 214 cities covered in the survey across five continents. The comparative cost of more than 200 items in each location was measured, including transport, food, clothing, household goods and entertainment.

The cost of housing is also included and, as it is often the biggest expense for expatriates, it plays an important part in determining where cities are ranked.

Juliet Xia is a chief representative with General Microcircuits Inc, and lives in Shanghai.

"Living in Shanghai and Beijing is unbelievably more expensive than in the US and Canada," she said

"I travel at least twice each year to the United States, and throw away around 40,000 yuan ($6,280) to 50,000 yuan each time on clothes, shoes, cosmetics and health food, but that's half the prices in Shanghai."

Jeff Yin, a Chinese-American who lives in Shanghai, feels the same.

"A pair of Levi's only cost around $29 in the United States, but look at the price tag here: 1,900 yuan ($298) a pair," he said.

"In the US, most high end and middle class stuff is much cheaper than that in China.

"I am well-off, but I think local residents are struggling to get by."

Experts have suggested that as China continues to expand and grow on the international business stage, taking on expatriate employees is becoming an increasingly important aspect of multinational companies' strategy.

But with volatile markets and stunted economic growth in many parts of the world, they are also keeping a keen eye on cost efficiency, including for expatriate remuneration packages, added Mercer's Constantin-Mtral.

"Making sure salaries adequately reflect the difference in the cost of living to the employee's home country is important to attract and retain the right talent where companies need them.

Although price increases have remained moderate overall, most US cities have gone up in the Mercer ranking, mainly as a result of the strong US dollar, added Constantin-Mtral.

Rachel Cheng, a mother of two, recently moved into a three-room apartment in mid-town Manhattan, from a home in Long Island.

"New York City is an entirely different level, especially with rent," said Cheng, who lives three blocks from Central Park and pays close to $8,000 a month for the maintenance fee in her 36-story building.

"The price of living in Manhattan depends on your location and living conditions. Once you step out of Manhattan, everything seems cheaper, " said Cheng.

Natalie Reese, 28, has relocated in the city four times during the three years she's lived there.

Now she lives in downtown Manhattan. "The cost of living in Manhattan is skyrocketing," Reese said.

Irene Yiu contributed to this story.