While Hong Kong and Tokyo usually spring to mind as the most expensive cities in Asia, a new report by Swiss banking group UBS shows that, when average wages are factored in, Beijing and Shanghai could actually be less affordable than in these international financial centres.
UBS’ “Prices and Earnings 2015” compared net wages and living expenses for workers in 71 cities around the world, including twelve Asian cities.
After deducting taxes and social benefit payments, an average worker in Beijing would have to be on the job for 36 minutes to buy a kilo of rice, while the same salaryman in Tokyo could go home more than three times earlier, as he only needs to work 10 minutes to earn his kilo of the daily staple.
It’s in the world of imported luxury goods, however, where many of the “cheaper” cities in Asia start becoming hard to endure. In Shanghai, an average earner would have to clock 163.8 days of work to pay for a new iPhone 6 in its 16gb incarnation, while his cousin down in Hong Kong would only need to put in 51.9 hours for his new gadget.
If you compare Shanghai to New York, where the average worker only has to put in 24 hours on the job to buy their new Apple device, Shanghai workers are putting in an extra 139.8 hours to achieve their new iPhones.
Are Low-Priced Cities Less Affordable?
While the UBS survey in many ways suffers from the common handicap of trying to figure costs for buying Western goods in an Asian environment, the comparison of costs for some basic staples shows that many cities seen as low-cost are not that affordable once lower net income levels are figured in.
Although Manila is often thought of as having a lower cost of living than many other Asian centres, earning a kilo of rice in the Filipino capital requires 21 extra minutes of work compared to Kuala Lumpur, and 24 extra minutes compared to Tokyo.
It’s Not Easy Being an Expat
For the few remaining die-hard expatriates, the cost of re-creating their lives back home gets more expensive, the further one strays from the established expat centres.
On the bank’s domestic purchasing power index, which compares the cost of supporting a family of three according to a European lifestyle with the average wages earned locally, European cities – not surprisingly – were generally the most affordable.
Within Asia, average purchasing power ranked highest in Hong Kong, which scored 99.3 on a scale where New York was the benchmark with a score of 100. By comparison, Shanghai workers, with lower basic salaries and after paying into their benefit programs scored only 32.9, and Beijing trailed still further behind at 23 out of 100.
The report did not include Singapore among the countries surveyed.
Shanghai’s Service Economy Pricier Than Hong Kong
On the bright side, for workers toiling in Asia’s developing markets, services such as haircuts, restaurant meals and dry-cleaning were generally more affordable there than in more traditional centres, and were much cheaper than in New York or Europe.
Overall the report found that services needed by a household in Beijing were only about 47 percent of what they cost in New York, and Bangkokians could get by with paying only 43 percent the rates in the Big Apple.
While an average man’s haircut costs $36.67 in New York, the same trip to the barbershop would be a few bucks cheaper in Hong Kong at only $30.96. In China’s capital, the nation’s leaders don’t seem to be fans of fancy hairstyles, spending an average of only $5.24 on their new ‘dos. Meanwhile, their more internationally focused Shanghai brothers pay the barber an average $10.10 for the latest hairstyles.
For those of us in Shanghai, the overall costs of services in the Pearl of the Orient were a bit less encouraging, however, with our services costing on average more than 60 percent of the New York standard, outpacing Hong Kong’s 55.3 percent.
The table below compares all twelve Asian cities in the survey, along with a few Western examples, for the costs of some basic items.
| Working Time Required to Buy | Big Mac-min | Kilo of bread-min | Kilo of rice-min | iPhone 6 16GB-hrs |
|---|---|---|---|---|
| Bangkok | 37 | 47 | 17 | 149.6 |
| Beijing | 42 | 40 | 36 | 217.8 |
| Hong Kong | 9 | 18 | 13 | 51.9 |
| Jakarta | 67 | 70 | 58 | 468 |
| Kuala Lumpur | 23 | 17 | 13 | 136.3 |
| London | 12 | 6 | 16 | 41.2 |
| Manila | 87 | 83 | 34 | 334.2 |
| Mumbai | 40 | 27 | 49 | 349.4 |
| New Delhi | 50 | 23 | 73 | 360.3 |
| New York City | 11 | 12 | 16 | 24 |
| Seoul | 18 | 22 | 19 | 57.2 |
| Shanghai | 35 | 37 | 25 | 163.8 |
| Sydney | 11 | 10 | 5 | 34 |
| Taipei | 13 | 10 | 14 | 69.2 |
| Tokyo | 10 | 14 | 10 | 40.5 |
| Zurich | 11 | 5 | 5 | 20.6 |
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