Beijing, Shanghai Overtake Singapore in Cost of Living Ranking

by CFO Innovation Asia Staff, 25 June 2012

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Singapore has fallen from 6th to 8th position in the rankings of the most expensive Asian locations for international assignees, according to the latest research conducted by ECA International.

While the city remains above Hong Kong in the ranking, it has been overtaken by Beijing and Shanghai. Beijing has risen from 8th to 5th most expensive location in Asia while Shanghai has moved from 9th to 6th position.

Tokyo is still the most expensive location in the world and, within Asia, Japanese cities occupy the top four places.

Beijing's move up the global rankings has been particularly dramatic. The city is now the world's 20th most expensive city, up from 48th place in the same survey last year.

"The rate of increase in the prices of goods and services commonly purchased by assignees in China has gone up sharply in the past year," explained Lee Quane, Regional Director, Asia for ECA International.

Quane adds that the Renminbi has strengthened against major currencies. Together, these two factors have contributed to pushing up the cost of living in Chinese cities for international assignees significantly. For many companies the cost of posting employees to China has risen significantly compared to those posting employees to Singapore, Hong Kong and other locations in the region.

Despite falling in the Asia ranking, Singapore has continued its rise up the global ranking. The city is in 32nd position, up from last year's 38th position and the previous year's 69th place. It is higher in the ranking now than cities such as Berlin (47) and Paris (34).

“Prices of goods and services in our basket of items commonly bought by international assignees in Singapore have increased almost 6 per cent on average in the last twelve months, says Quane. “This is almost double the rate at which they rose a year ago. This together with the fact that over the same period the Singapore dollar has remained strong against other major currencies has contributed to Singapore’s continued rise up the global ranking.”

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. Certain living costs such as accommodation, utilities, car purchase 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.

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