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Hong Kong ranks fourth among seven selected cities, according to the results of a comparative study on the cost of living for expatriates. Topping the list is Tokyo, followed by New York and London. Singapore took the fifth place, followed by Shanghai and Taipei.

The study was carried out by the Economic Analysis Division and the Census and Statistics Department. A private sector agent was commissioned to collect updated data for comparing the cost of living for expatriates in the seven cities.

Announcing the results of the study at a press conference today (November 29), the Government Economist, Mr K Y Tang, said that the rankings in this latest round with August 2002 as reference month were the same as those in the last round of the study in August 2001.

"Excluding housing cost, Tokyo remains at the top of the list, while London overtakes New York to become the second most expensive city. Hong Kong recedes to the fifth place, while Singapore advances to the fourth. Taipei advances to the sixth place, while Shanghai becomes the least expensive city amongst the seven cities included," Mr Tang said.

Analysed by major consumption category, Tokyo tops the list in the costs of food, utilities, clothing and miscellaneous goods, while New York has the highest costs of housing, alcoholic drinks and tobacco, and consumer services. The cost of transport is highest in London. Yet the cost of durable goods is the highest in Singapore.

"Taking Hong Kong as the reference city for comparison, in overall terms the cost of living for expatriates in Tokyo is considerably higher than in Hong Kong, by around 40%. The costs of the various major consumption categories, except those of housing, alcoholic drinks and tobacco, are all much higher in Tokyo," Mr Tang said.

"The cost of living in New York and London are also distinctly higher than in Hong Kong, by around 36% and 26% respectively. In New York, the costs of consumer services, utilities, housing, alcoholic drinks and tobacco, and durable goods are much higher than in Hong Kong, while in London, the costs of transport, durable goods, consumer services and food are markedly higher."

"Compared with Hong Kong, the cost of living for expatriates in Singapore is appreciably lower by around 9%, while those in Shanghai and Taipei are significantly lower by around 25% and 28% respectively."

"While the costs of housing, miscellaneous goods, utilities and consumer services are considerably lower in Singapore than in Hong Kong, the costs of durable goods and transport are markedly higher in Singapore."

"For Shanghai, the costs of housing, utilities, alcoholic drinks and tobacco, miscellaneous goods, durable goods, food and consumer services are markedly lower than in Hong Kong. Yet the cost of transport is somewhat higher, mainly due to higher prices of imported cars. As to Taipei, the costs of housing, utilities, and alcoholic drinks and tobacco are much lower than in Hong Kong, while the costs of durable goods, clothing and miscellaneous goods are higher."

Excluding housing cost, the cost of living for expatriates in Tokyo is around 59% higher than in Hong Kong, while those in London and New York are around 39% and 31% respectively higher. The cost of living for expatriates in Singapore is around 13% higher than in Hong Kong. On the other hand, the cost of living for expatriates in Taipei is about 3% lower than in Hong Kong, and that in Shanghai is around 14% lower.

Outlining the methodology adopted for the study, Mr Tang said it was akin to that of a standard consumer price survey.

For each of the seven cities, price data have been collected on a total of 101 commodity/service items, chosen to represent the basket of consumer goods and services purchased by a typical US expatriate household across the seven cities concerned.

"The items priced should be sufficiently typical for the city itself yet also comparable across the seven cities," Mr Tang said.

The 101 commodity/service items are grouped into 41 commodity/service categories and further into 9 commodity/service sections. The expenditure weights as enumerated for the consumption pattern of a typical US expatriate household are then applied.

The report on the comparative study on cost of living for expatriates across the seven cities will be put on the website of the Financial Services and the Treasury Bureau (http://www.info.gov.hk/hkecon).

Annexed are three tables from the study. Table 1 gives the summary rankings of cost of living for expatriates in the seven cities covered by the study. Table 2 gives the summary ratios of cost of living for expatriates in the seven cities covered by the study. Table 3 shows the various commodity sections and categories as well as the weightings used for compilation of the summary ratios.

End/Friday, November 29, 2002

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