Southeast Asian cities have their ups and downs, and the ranking of Beijing and Shanghai has declined

SHANGHAI, June 24, 2024/PRNewswire/ -- Mercer, a world-renowned human resources and health and welfare consulting agency under Vistasin Group Corporation (NYSE: MMC), recently released the results of the 2024 Urban Cost of Living Survey. The purpose of this ranking is to provide multinational organizations with research insights to help them plan international talent compensation strategies.

Hong Kong and Singapore once again became the world's top and second most expensive cities to send international employees in terms of cost of living. Switzerland's Zurich, Geneva, and Basel are also among the top five most expensive cities in the world. Among other Chinese cities, Shanghai and Beijing ranked highest, respectively, and ranked 23rd and 25th respectively, down from last year.

“Changes in the cost of living will have a significant impact on the global development of companies,” said Yvonne Traber, global partner and head of the talent dispatch business at Mercer. “Companies must keep abreast of changing trends in the cost of living, update strategies for attracting and retaining iterative talents, flexibly control talent needs and costs, and effectively formulate international talent strategies.”

Rising housing costs in many cities around the world are causing employers to face some challenges in talent dispatch. Fluctuating inflation trends have also reduced the purchasing power of internationally dispatched workers and placed additional pressure on their compensation plans. These factors make it more difficult for companies to attract and retain top talent, and may cause expensive compensation benefits, such as limited talent mobility and increased operating costs.

“Due to declining purchasing power and revenue, the quality of life of resident employees may be affected. In order to better meet these challenges, enterprises and organizations should provide international talents with remuneration and benefit plans and humane support services that keep pace with the times. At the same time, regular understanding of employees' needs and feedback and open communication can help resolve issues in a timely manner and find solutions that meet the interests of the organization and are suitable for employees,” added Lu Zhenghao, global partner at Mercer and general manager of the Chinese talent business.

The cost of living ranking of various cities in China continued the downward trend in 2023. Apart from Beijing and Shanghai, the rankings of other mainland Chinese cities, such as Shenzhen (34), Guangzhou (71), Qingdao (93), and Nanjing (105), dropped by 14 to 38 places. Chongqing (134), Xi'an (139), and Wuhan (147) rank lower among the regions that China participated in the rankings.

Factors affecting the cost of living in China include inflation, housing costs, food prices, income gaps, currency exchange rates, and government policies. The Chinese economy experienced significant growth and transformation in 2024. According to data released by the National Bureau of Statistics in April, China's gross domestic product in the first quarter was 29629.9 billion yuan, up 5.3% year on year and 1.6% month on month over the fourth quarter of the previous year. Total retail sales of social consumer goods increased 4.7% year on year, while the national urban unemployment rate fell 0.3 percentage points in the first quarter compared to the same period last year.^[1]

Currently, China's inflation rate has been relatively moderate, and housing costs will rise due to urbanization and population growth. Food prices fluctuate according to supply and demand dynamics. Income gaps between urban and rural areas and regions also affect the cost of living, while exchange rates affect the prices of imported goods.

Asia is home to two of the world's most expensive cities to live. Hong Kong and Singapore have limited housing supply due to limited land area, making housing costs one of the main expenses for residents and expatriates. As important economic hubs, these two cities have attracted large numbers of expatriates, further driving up the cost of goods and services. As a region, Asia is experiencing a mix of positive and negative trends. Factors such as inflation, fuel and food prices, and the global economic slowdown affect the different cost of living standards across the region.

Southeast Asian cities are also popular regions for Chinese companies to go overseas in recent years. Some cities have also declined in rankings this year, such as Bangkok (129), Hanoi (172), Ho Chi Minh City (178), and Kuala Lumpur (200). Ma Yaqin, head of Mercer's talent dispatch business in Asia, said, “In addition to rising housing and commodity costs, Hong Kong and Singapore have excellent infrastructure, healthcare and education systems, and a high standard of living. Although many other Asian cities have declined in rankings due to currency depreciation, slight inflation, and changes in housing prices in some markets, the entire Asian region is on the path of economic recovery. To maintain the purchasing power and standard of living of expatriates, many organizations have reviewed their dispatch allowances and changed the housing budget review cycle from once a year to biannual or quarterly.”

Five European cities rank among the top ten most expensive cities in the world, including four Swiss cities and London. London jumped nine places to eighth place in the overall ranking. Although the cost of living varies among European cities, the European Central Bank predicts that annual inflation in the Eurozone will continue to fall, which means that the cost of living will stabilize as the European economy recovers from recent setbacks.

The current cost of living in the US remains high, and all US cities included in the ranking are in the top 100. Seven of these cities are in the top 20, with the highest ranking being New York City (7) and Los Angeles (10). Canadian cities ranked lower in North America because their economy showed greater resilience than expected. The highest ranking was Toronto (92), followed by Vancouver (101). Compared to 2023, the biggest changes in the ranking in North America were Mexico City (33, up 46 places) and Monterrey (115, up 40 places).

2024Urban cost of living ranking

Data sources:

^[1]. The press conference of the Information Office of the State Council introduced the operation of the national economy in the first quarter of 2024

regarding2024Cost of living ranking

The Mercer Cost of Living ranking includes 227 cities spread across five continents, and calculates and compares the cost of more than 200 types of goods and services in each city, including housing, transportation, food, clothing, household items, and entertainment. The purpose of research data collection is to provide businesses and organizational employers with all the key information needed to design efficient and transparent compensation plans for internationally dispatched employees.

The data on the comparison between Mercer's cost of living and housing rental prices comes from a market survey conducted in March 2024, and uses the current exchange rate and the international prices of a basket of products and services calculated by Mercer based on its global cost of living survey as the calculation basis. The study used New York City in the US as the reference city for comparison, and changes in exchange rates were calculated relative to the US dollar.

Inflation is generally defined as the change in price from moment T to moment T+1, using the exact same specifications in terms of the size and characteristics of the product's packaging. Therefore, in Mercer's cost of living survey, the inflation data quoted by Mercer aims to show the fluctuation of the index in local currency over the past 6 or 12 months, regardless of exchange rate fluctuations between the home country and the host country.

About Mercer

Mercer believes that by redefining the workplace, reshaping retirement and investment outcomes, and unlocking real health and benefits, we can create a better future. Mercer operates in 130 countries and regions around the world, with nearly 25,000 employees spread across 43 countries. Mercer is a wholly-owned subsidiary of Marsh & McLennan (NYSE: MMC). Vistasin is a global group of companies providing professional services related to risk, strategy and human resources. It has 85,000 employees worldwide and annual revenue of over $20 billion. Through its industry-leading subsidiaries Marsh (Marsh), Guy Carpenter (Guy Carpenter), and Oliver Wyman (Oliver Wyman), Vistasin helps customers cope with an increasingly changing and complex business environment. For more information, please visit or follow Mercer China's official WeChat “Mercer Mercer” (WeChat: MercerChina).