Looking at 144 cities around the world, including five on the Chinese mainland as well as Hong Kong and Taipei, the latest cost-of-living survey has thrown up quite a few surprises.

While China observers may be left open mouthed by the ranking of Beijing as more expensive to live than Shanghai, Taipei and Singapore others around the world will be equally perplexed that Moscow beat off the likes of Tokyo, London and Geneva to claim the dubious number one spot.

Hong Kong, ranked fourth between third-place Tokyo and London in fifth, was the most expensive Chinese city with Beijing at 14th. Shanghai was six places below the capital in 20th, Taipei ranked 28th, Shenzhen 44th, Guangzhou 54th and Tianjin 128th -- one place below Bangkok.

Conducted by Mercer Human Resources Consulting, whose clients use the survey to calculate cost of living allowances for staff transferred internationally, the survey compared the prices of more than 200 items covering housing, transport, food, clothing, household goods and entertainment costs.

Many of the changes in position from last year's survey, which listed Tokyo as the most expensive city, were a result of currency fluctuations, said senior Mercer consultant Rebecca Powers.

The move to peg the renminbi against a basket of currencies rather than just the US dollar was a major reason for cities on the Chinese mainland climbing up the scale, she added. Shenzhen rose 19 places, Guangzhou 11, Shanghai 10, Beijing five and Tianjin was up three.

However, this does not explain the apparent anomaly of Beijing being judged more expensive than Shanghai for the second year running. This appeared to come as a shock to everyone, except Professor Zhang Jun from the Economics Department of Fudan University.

"Actually I was not surprised by this result at all," he said. "The cost of real estate in Beijing has been very high but the main reason for Beijing being ranked as more expensive is because of its social make-up.

"Shanghai has a lot of middle-income earners whereas Beijing has a lot of high earners, a lot of people on low incomes and far fewer people in the middle," he observed. 

"As a result prices tend to go towards extremes. While cheap things are very cheap, the high-end goods and services are very expensive, certainly more expensive than in Shanghai," he added.

With the survey looking at things like the rental of a luxury two-bed apartment, a genuine music CD, a cup of coffee including service charge and the price of an international daily newspaper it's perhaps unsurprising that Beijing outranked its east coast rival despite Shanghai's more affluent reputation.

Elsewhere in the world, Seoul, South Korea, was the most expensive city in Asia, coming in second overall, Singapore ranked 17th, Frankfurt, the highest ranked German city, came in at 61st and New York held onto its position as the most expensive US city in 10th.

As a global leader for human resources and related financial advice and services, Mercer Human Resources Consulting has more than 15,700 employees working on behalf of clients in more than 190 cities and 41 countries worldwide.

(China Daily June 29, 2006)