Increased expenses mean Hong Kong may not retain pool of expat talent
Hong Kong has become the fourth most expensive city in Asia according to the Worldwide Cost of Living 2013, a bi-annual survey by The Economist Intelligence Unit. It has outranked all cities in mainland China, moving up eight notches to sit at an affluent 14th place in the league table of the most expensive cities in the world. The implications for Hong Kong’s ability to attract the caliber of global talent for which it is renowned must be considered.
Many European cities are bowing to economic pressure with costs of living consequently falling, according to Jon Copestake, Editor of the report which looks at over 400 individual prices. He added, “But Asian cities have been rising on the back of wage growth and economic optimism. This means that over half of the 20 most expensive cities now hail from Asia and Australasia.” As currency swings continue in Australasia and economic growth and wages climb in China, the relative cost of living in certain parts of Asia has been raised. The trading and talent hubs of Singapore and Hong Kong are no exception to this and expats considering a move over, or indeed whether to stay, should perhaps weigh up the relative costs of necessities such as accommodation and schooling.
In education, newly announced changes in the admissions policy of the English Schools’ Foundation, long considered the affordable schooling option for the English-speaking community, could either help or hinder Hong Kong’s attraction factor. On the one hand, the previously controversial application process has been strengthened to include a parental interview to verify the parents’ commitment to an ESF-style English-medium education and determine whether the child is subject to sufficient English at home for them to flourish under this system. Yet, from August 2013 applicants for the following academic year will be prioritised such that those whose parents purchase ESF Nomination Rights will be considered before children of ordinary fee-payers. This measure is an attempt to raise much needed capital, in the face of continued discussions over the future of the government subvention.
So what alternatives are there for a talented and prepared-to-be mobile workforce? Twenty-seven Asian cities surveyed moved up the expense ranking, compared to eight which fell and just two whose position is unchanged. Chinese cities in particular have seen the cost of living continue to rise, fuelled by wage inflation and rising demand for consumer goods as well as tight currency controls. Australian cities have been rising very quickly too with Sydney rated as third and Melbourne as fifth most expensive cities surveyed. Tokyo has once again found itself to be the world’s most expensive city, a position it has held for 14 of the last 20 years. They are all joined in the top ten by Singapore, which boasts similar ease-of-liveability to Hong Kong for the expatriate family, although ranked at number six in the most expensive place to live survey.
Asia does still remain host to the world’s cheapest cities however, most of which are located in parts of the South Asian Indian subcontinent. Hong Kong has much to offer and it seems that similarly high costs of living are associated with the other traditional territories of the career driven expat. Yet with the dwindling space for housing pushing up prices of basic and confined accommodation, the newly imposed 15% duty on property purchases for non-permanent residents and mounting pressure on the education system, questions of overseas staff attraction and retention must surely arise.
Paul Arkwright
Publisher
