Living costs in major Chinese cities have risen sharply over the past year, with Shanghai approaching the level of New York, the benchmark city in a report by the Economist Intelligence Unit.

The EIU's Worldwide Cost of Living 2013 survey ranked Shanghai 30th among 131 cities in cost of living, climbing 11 spots from last year.

Living costs in China have gone up as increased consumer demand offsets wage increases and government efforts to keep the economy from overheating, the report's editor Jon Copestake told China Daily. Currency controls also contributed to cost-of-living increases, he said.

Hong Kong led all Chinese cities, taking fourth place in Asia and 14th worldwide. After Shanghai, Shenzhen was second among mainland cities, coming in 14th in Asia and holding down 40th place overall, followed by Dalian, third (16th in Asia, 43rd overall); Beijing, fourth (17th in Asia, 54th overall); and Guangzhou, fifth (20th in Asia, 71st overall).

Copestake suggested that the latest figures reflect China's recent economic expansion. The country is projected to have the world's biggest economy in coming years, possibly as soon as 2020.

"China is catching up with other economies, so it's more expensive," he said. "You could say it is the price of success. It's a small price to pay, because wage inflation in China is still keeping up with the receding cost-of-living inflation, at the moment anyway."

The No 30 ranking by Shanghai compares to its 41st-place spot in the EIU's 2012 survey. Five years ago, the city was 23 places lower at 53rd.

Shenzhen was 56th last year and 71st five years ago; Dalian was 53rd last year and 65th five years ago; Beijing was 59th last year and 64 five years ago; Guangzhou was 72nd last year and 80th five years ago.

The EIU's twice-a-year survey compares more than 400 individual prices across 160 products and services in 140 cities. According to its publisher, the survey is designed to help human-resources and finance managers calculate cost-of-living allowances and build compensation packages for expatriates and business travelers.

All cities are compared to New York, which has an index set at 100. More than 50,000 individual prices are collected in each survey, including bread, cigarettes, table wine and fuel.

Tokyo regained the title of the world's most expensive city, a distinction it has held for all but a few of the past 20 years. Following it were Osaka, Sydney, Oslo, Melbourne, Singapore, Zurich, Paris, Caracas and Geneva.

No North American cities made it into the top 20. New York, the benchmark city for the survey, shared with Los Angeles the distinction of being the most expensive US city, while Vancouver retained its status as the priciest location in North America.

Ye Hang, a Shanghai native who worked at a New York Internet company for two years, concurred with the study's basic finding - that Shanghai is expensive, especially for residents of modest means.

"The cost of living in New York is less than Shanghai," Ye said in an interview. "There is no big difference between my annual salary in New York or in Shanghai."

Ye said rent on a "nice one-bedroom apartment in Brooklyn or in Queens, which involves only around a half-hour commute to downtown Manhattan," could be had for $1,500. An equivalent place in Shanghai, he said, would fetch more than 3,000 yuan (nearly $500) - a harder hit to the wallet in real terms.

michaelbarris@chinadailyusa.com

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