HK now less ex­pen­sive for ex­pats

SAR crashes out of world’s 10 most costly cities, as Ja­pan tops the list in Asia Pa­cific, sur­vey finds

China Daily (Hong Kong) - - BUSINESS HK - By LUO WEITENG in Hong Kong sophia@chi­nadai­lyhk.com

Com­pa­nies as­sign­ing staff to Hong Kong may ex­pect to pay lower cost of liv­ing al­lowances af­ter the city dropped out of the ros­ter of the world’s 10 most ex­pen­sive cities for ex­pa­tri­ates.

The find­ing came in the lat­est study con­ducted by Lon­don-based hu­man re­source con­sul­tant ECA In­ter­na­tional, which found that Hong Kong has also slipped from third place in 2015 to the fifth spot in this year’s Asian rank­ings af­ter hav­ing been over­taken by a host of Ja­panese cities, in­clud­ing Tokyo, Yoko­hama, Nagoya and Osaka.

Ye t , t h i s d o e s n’ t n e c e s - sar­ily mean that goods and ser­vices are now cheaper in the SAR com­pared with a year ago. The city’s in­fla­tion rate, in fact, posted a 3-per­cent growth year-on-year in 2016, ac­cord­ing to Lee Quane, re­gional di­rec­tor for Asia at ECA In­ter­na­tional.

In s t e a d , e x c h a n g e - r a t e move­ments have much to do with Hong Kong’s fall in the re­gional and global rank­ings in terms of liv­ing costs for ex­pats.

A strength­en­ing Ja­panese yen, in par­tic­u­lar, has en­abled Tokyo to re­claim its crown as the most costly city in Asia and world­wide, and pushed all other sur­veyed Ja­panese cities above Hong Kong in the rank­ings.

Like­wise, a weak­en­ing yuan on the Chi­nese main­land and a rel­a­tively stronger Hong Kong dol­lar have made Hong Kong the most ex­pen­sive city in China, dwarf­ing its peers like Beijing, Shang­hai, Ma­cao and Taipei.

“A l t h o u g h t h e C h i n e s e main­land saw the big­gest drops in the Asian rank­ings, it does not truly fol­low the gen­eral trend seen there over the past five years, dur­ing which main­land cities pro­duced an av­er­age in­crease of 88 places in the global rank­ings. It’s likely that ma­jor main­land cities will re­main ex­pen­sive des­ti­na­tions for mo­bile em­ploy­ees for the fore­see­able fu­ture,” said Quane.

So far, the Asia Pa­cific has been home to half of the 20 most costly cities around the world — more than any of the other re­gions world­wide, in­clud­ing Cen­tral Asia, Mid­dle East, Africa and Europe.

As for Hong Kong, de­spite the fall in the rank­ings, the fi­nan­cial cen­ter is still more ex­pen­sive than other ma­jor in­ter­na­tional fi­nan­cial hubs like Lon­don, New York and Syd­ney.

A 500ml beer at a bar in Hong Kong costs $12.29, but it costs only $8.71 in Lon­don, while a liter of petrol costs on av­er­age $2.02 in Hong Kong and $0.83 in New York.

Look­ing ahead, Quane be­lieves that ma­jor cities in the Asia Pa­cific will con­tinue to be more costly, and ris­ing liv­ing costs for ex­pats may de­ter multi­na­tion­als from send­ing their tal­ents to the region as a whole.

But, for the mo­ment, he noted that Hong Kong’s re­gional com­pet­i­tive­ness con­tin­ues to be threat­ened. A weaker yuan may not im­me­di­ately trans­late into an at­trac­tion for com­pa­nies in­tend­ing to re­lo­cate their em­ploy­ees from Hong Kong to the main­land.

He said the SAR still re­tains its al­lure for multi­na­tional cor­po­ra­tions, bank­ing on its free econ­omy and a ma­ture mar­ket with a global hori­zon.

The SAR still re­tains its al­lure for multi­na­tional cor­po­ra­tions, bank­ing on its free econ­omy and a ma­ture mar­ket with a global hori­zon.”

PARKER ZHENG / CHINA DAILY

A sur­vey shows Hong Kong has slipped to the fifth spot in the rank­ings among the most ex­pen­sive cities in Asia this year. But a weak­en­ing yuan and a rel­a­tively stronger Hong Kong dol­lar have made Hong Kong the most ex­pen­sive city in China, dwarf­ing its peers like Beijing, Shang­hai, Ma­cao and Taipei.

Lee Quane, re­gional di­rec­tor for Asia at ECA In­ter­na­tional

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