Rising costs pose limited threat to Hong Kong's allure
Updated: 2015-03-05 07:29
By Oswald Chan in Hong Kong(HK Edition)
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Although Hong Kong has been named one of the world's 10 most expensive cities to live in, its competitiveness against other cheaper cities in the region in attracting foreign talents, especially in finance, has remained strong, human resources consultants said.
Hong Kong rose from 13th position last year to ninth place in this year's worldwide cost of living survey by the Economist Intelligence Unit (EIU). The city made the Top 10 list in the survey for the first time since 2003.
The survey tracks the prices of 160 goods and services ranging from food, transport, utilities, alcohol, tobacco, private schools and domestic helpers across 140 cities, and the comparison is based on the price level of New York as the benchmark. But, it does not take real estate prices or income tax into account.
Singapore is the world's priciest city to live in, followed by Paris, Oslo, Zurich and Sydney, according to the EIU survey.
According to the survey, basic groceries in Hong Kong were 31 percent more expensive than in New York, especially for those foodstuff bought at branded groceries of organized retailers. High retail outlets' rentals and business rates are pressurizing retailers to pass the costs to customers, EIU chief retail and consumer goods analyst Jon Copestake said.
Eating out has also become a costly proposition in Hong Kong, especially at top eateries, where a three-course meal can easily top $370, the EIU survey said.
Of course, living costs in various major Chinese mainland cities have also risen rapidly in recent years. For example, Shenzhen's ranking in this year's survey jumped to 28th place from 39th in 2014 mainly because of rising labor cost in the Pearl River Delta region. Shanghai, however, dropped three spots to 24th while retaining the title as the mainland's most expensive city. Beijing moved up one slot to 46th.
Living cost is an important indicator closely watched by economic planners of many Asian cities that are keen on retaining local talents and attracting foreign professionals to help spearhead innovation and development in finance, IT and other industries.
The stake in the talent hunt is particularly high for Hong Kong which thrives on staying ahead of other cities in the region as the premier financial and services center.
The increase in living cost is alarming, no doubt. But Hong Kong can still count on its other competitive advantages to lure qualified professionals from the mainland and abroad, human resources consultants said.
"Hong Kong's close geographical proximity to the mainland hinterland will attract companies to locate their foreign expatriate staff to Hong Kong if they want to expand their business on the mainland," said Alexa Chow Yee-ping, managing director of Centaline Human Resources Consultants. "Coupled with the low tax rates and a rule of law tradition, Hong Kong still has the niche to attract overseas talents," she said.
Mercer, a global advisory firm in talent, health, wealth and investments, agreed that Hong Kong's high standard of living, despite the cost, is still attractive to overseas expatriate staff.
According to the Mercer 2015 Quality of Living ranking, Hong Kong was Asia's seventh city with the highest standard of living.
"Other than efficient services, the wide variety of food, leisure and entertainment options, as well as a vast choice of high quality consumer goods, also set Hong Kong apart," said Connie Leung, business leader of talent information at Mercer.
But, she said, worsening air pollution and traffic congestion remained a concern.
oswald@chinadailyhk.com
(HK Edition 03/05/2015 page8)