CHINA / Regional

Beijing tops Shanghai in cost-of-living
By Mark South (China Daily)
Updated: 2006-06-29 06:20

SHANGHAI: Looking at 144 cities around the world, including five cities on the Chinese mainland as well as Hong Kong and Taipei, the latest cost-of-living survey has thrown up more than a few surprises.

While China watchers may be left open mouthed by the ranking of Beijing as a more expensive place to live than Shanghai, Taipei and Singapore, others around the world will be equally perplexed that Moscow beat off the likes of Tokyo, London and Geneva to claim the number one spot.

Hong Kong, ranked fourth between third-place Tokyo and London in fifth, was the most expensive Chinese city with Beijing coming in 14th. Shanghai was six places below the capital in 20th, Taipei ranked 28th, Shenzhen 44th, Guangzhou 54th and Tianjin 128th, one place below Bangkok.

Conducted by Mercer Human Resources Consulting, whose clients use the survey to calculate cost of living allowances for staff transferred internationally, the survey compared the prices of more than 200 items covering housing, transport, food, clothing, household goods and entertainment costs.

Many of the changes in standing from last year's survey, which listed Tokyo as the most expensive city, were a result of currency fluctuations, said senior Mercer consultant Rebecca Powers.

The move to peg the renminbi against a basket of currencies rather than just the US dollar was a major reason for cities on the Chinese mainland climbing up the scale, she added, with Shenzhen rising 19 places, Guangzhou 11 places, Shanghai 10 places, Beijing five places and Tianjin up three.

This does not explain, however, the apparent anomaly of Beijing being judged more expensive than Shanghai for the second year running, something that seemed to come as a shock to everyone, except Professor Zhang Jun from the Economics Department of Fudan University.

"Actually I was not surprised by this result at all," he said. "The cost of real estate in Beijing has been very high, but the main reason for Beijing being ranked more expensive is because of its social make-up.

"Shanghai has a lot of middle-income earners, where as Beijing has a lot of high earners, a lot of people on low incomes and far fewer people in the middle.

"As a result, prices tend towards the extremes; while cheap things are very cheap, the high-end goods and services are very expensive, certainly more expensive than in Shanghai."

With the survey looking at things like the rental of a luxury two-bed apartment, a genuine music CD, a cup of coffee, including service charge, and the price of an international daily newspaper, it is perhaps unsurprising that Beijing outranked its east coast rival, despite Shanghai's more affluent reputation.

Elsewhere in the world, Seoul, South Korea, was the most expensive city in Asia, coming in second overall, Singapore ranked 17th, Frankfurt, the highest ranked German city, came in at 61st and New York held onto its position as the most expensive US city in 10th.

(China Daily 06/29/2006 page3)