Beijing has overtaken Hong Kong to become the most expensive location in China for expatriates, according to a survey released Tuesday by ECA International, a human resource company.
Beijing and Shanghai, which rank 35th and 41st globally, are now Asia's seventh and eighth most expensive places for expats to live, while Hong Kong has slipped from being sixth to ninth in Asia since last year, the survey says.
The survey also found, on average, the actual prices of goods and services purchased by expatriates have risen by 9 percent in China over the last 12 months.
For example, the cost of living in Chinese provincial capitals such as Chengdu and Wuhan have increased greatly, Chengdu rose 21 places to 144th and Wuhan went up 20 places to 146th in global rankings.
"Living costs are affected by inflation and exchange rates," Yang Fan, professor with the Business School at the China University of Political Science and Law, told the Global Times yesterday.
"It makes sense that the strong currency of yuan and rising prices have allowed Beijing and Shanghai to overtake Hong Kong," Yang said. "Expatriates may feel the increase clearly, as they tend to choose more expensive goods and services."
Lee Quane, regional director for Asia at ECA, said it has a lot to do with economics.
"When we look at Hong Kong in a regional context, the weak dollar means that the city is now cheaper than a number of other locations, including Singapore, Beijing and Shanghai, where not only has there been significant price inflation, but also currencies have strengthened."
A Hong Kong native living in Beijing agrees there has been a pinch.
"The living costs in Beijing are quite high. I have to pay more income tax than in Hong Kong," said Yositta Wong, who moved to Beijing two years ago.
Wong, a marketing professional, said she has noticed the prices of some dishes in restaurants have risen by one or two yuan ($0.157 or $0.314).
"But one of the clearest increases in living costs is rent, which has risen drastically over the past year," said Wong.
Four Japanese cities: Tokyo, Nagoya, Yokohama and Kobe, occupied the top four most expensive locations in Asia, due largely to the Japanese currency's recent rise, the survey said.