Expats Struggle With Rising Costs in China

Expatriates living in China are facing a massive surge in living costs two recent cost of living surveys reveal.

While China’s major cities of Beijing and Shanghai have long held a reputation for being expensive, many of the smaller cities throughout the country are now also seeing advanced living costs and expatriates are starting to see a noticable difference in their quality of life.

In a recent survey by ECA International, Tthe southern Chinese cities of Shenzhen and Guangzhou jumped a whopping 49 and 34 spots respectively in the list of the most expensive cities in the world in which to live. That puts them ahead, in terms of cost of living, of major cities such as London (62) and Madrid (83). Similar trends were observed in the recent Mercer cost of living index, with Shenzhen featuring in position 30 (a rise of 13 places on the previous year) and Guangzhou featuring in position 31 (a rise of 7 places on the previous year). Beijing has also demonstrated a dramatic move up the global rankings and is now the world’s 20th most expensive city in the world, up from 48th place in the same survey last year.

Speaking to CNN, Lee Quane, Asian Regional Director at ECA International disclosed that their research indicated that the cost of everyday groceries had increased by 15 percent in China over the previous year and the cost of meat and fish had increased by 12 percent: “What we’ve seen in the last 12 months has been double digit inflation based on the items in our basket of goods. And that could be partly due to the impact of commodity prices over the course of the last 12 months finally coming through to what’s being sold on the retail shelves,” he said.

“Accommodation rates in cities like Beijing and Shanghai are starting to catch up with Hong Kong and then you’ve got the difference in tax rates – in Hong Kong 17 per cent while China goes up to 40 per cent,” he added.

Expatriates are also impacted by increased social security expenses: “Now in China companies have to enroll their staff in social security which increases the cost for employers and employees, which doesn’t happen as much in Hong Kong,” Quane said in a press release.

One of the biggest contributors to rises in the cost of living in China has been attributed to the rise in the value of the renminbi against the Euro. Discussing the impact that this has had on expatriates in the region Quane told the Hong Kong Standard: “The yuan has continued to strengthen while the yen has appreciated by almost 8 percent against the US dollar. Many Western currencies, including sterling, the euro and Swiss franc, have weakened. As a result, people coming from these economies into Asia will notice a considerable difference in costs.”