Shanghai soared four places to become the world's 10th most-expensive city for expats, according to Mercer's 2014 survey on cost of living released last week. Beijing closely followed at 11th, also with a 4-place jump from last year.
At the same time, Shenzhen of Guangdong Province moved up 12 places to No. 17 while Guangzhou (also in Guangdong) leaped 11 spots to No. 24.
The survey, designed to help multinational companies and governments determine compensation for their expatriate employees, covers 211 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
A pair of African cities -Luanda (Angola) and N'Djamena (Chad) -emerged as the two most expensive cities in the world for expats.
"Rankings in many regions were affected by recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices," said Ed Hannibal, partner and global leader for Mercer's mobility practice.
"While Luanda and N'Djamena are relatively inexpensive cities, they are quite costly for expatriates since imported goods come at a premium," he said. "In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly, as well. This is generally why some African cities rank high in our survey."
Currency fluctuations and the impact of inflation on goods and services have influenced the cost of expat programs as well as the city rankings.
"Chinese cities jumped in the ranking, including Shanghai, Beijing and Shenzhen, mostly due to the strengthening of the Chinese yuan," said Nathalie Constantin-Métral, principal at Mercer who compiled the survey ranking.
"It's definitely increased a lot," said Katherine Lo, from the US, who's been in Shanghai for six years. She rents a two-bedroom apartment in the downtown area at about 11,000 yuan (US$1,770) per month. "My rate has almost doubled since I came. I mainly eat out and I can see my monthly bill getting higher every year, especially last year."
Katsunari Okura, a 25-year-old Japanese living in the city for three years, agreed with Lo. "I find Shanghai not cheap at all," he told Shanghai Daily. He has high expenses from clothing and playing golf. On weekends he likes to take excursions around the city.
"I don't spend much because my girlfriend doesn't allow me," he said.
In fact, Shanghai has been the country's spending capital not only for expats, but also for locals.
Last year, the Economist Intelligence Unit's "The Worldwide Cost of Living" survey showed that Shanghai rose nine spots to rank No. 21 overall, a reflection of higher wages, rising prices and the appreciation of the yuan.
The study tracked the prices of a basket of goods and services, such as food, transport, utilities, alcohol, tobacco, private schools and domestic help. It then compared them across 131 cities around the world to form an index.
The baseline of the index is New York, which has a score of 100. The survey doesn't take into account the price of real estate or income taxes.
Shanghai's score of 101 meant it was 1 percent more expensive than New York. Prices from housing to an ice cream are not cheap.
A basic cup of Starbucks coffee costs 17 yuan in Shanghai but just 11 yuan in New York; the taxi initial rate is 14-16 yuan and 16 yuan in New York; a liter of gas is 8 yuan in Shanghai, but 7 yuan in New York.
While prices are close, there is a huge disparity in wages. Shanghai residents' average disposable income is only 40,000 yuan, while it is about 300,000 yuan in New York.
So while Shanghai's absolute cost might not be as expensive as some other cities such as London and Tokyo, its relative cost (taking income into account) is among the tops in the world.
In April, many of China's provinces increased their minimum wage. Shanghai tops the rankings with 1,820 yuan (US$293) per month and 17 yuan per hour, followed by Shenzhen with 1,808 yuan and 16.5 yuan an hour.
Martin Chevet, 42, from France
Car engineer, 14 years in Shanghai
Each time when I meet my friends, a popular topic is how expensive Shanghai is becoming. I came to the city in 2000, when I clearly remember that the housing subsidy my company gave me could afford a 150-square-meter, beautifully furnished apartment with a nice Huangpu River view, plus a capable ayi who can speak simple English.
But now the subsidy remains the same while the rent has risen by 50 percent. Many of my friends changed to smaller apartments and reduced the times they eat out.
And I guess maybe because I'm a foreigner, people usually charge more when I shop. I can feel it but I seldom argue with them.
The good thing is the labor cost is still lower than those in many other places, though it is also obviously rising in recent years. A good massage in a quality salon is around 400 yuan, while it might cost 600 yuan in Tokyo and 800 yuan in New York.
And enjoy your ayi's service. When my children grow up in Shanghai, they might not be able to afford an ayi.
Zhang Cong, 35, from Shangyu, Zhejiang Province
Bank project manager, 10 years in Shanghai
I find it still hard for me to adapt to the city. As a non-Shanghainese, with my monthly salary (about 15,000 yuan), I can only support myself. I spend 6,000 yuan a month on average, not including the rent of 5,800 yuan. If I want some entertainment, I would save nothing each month.
It's a quite huge pressure for me because I'm still single. Dating needs money and I can't afford much, not to mention buying an apartment.
I remember the mandarin fish was 25 yuan per 500 grams when I first came here, and now it's almost 70 yuan.
You have to earn, as a non-local, probably 500,000 yuan a year at least to have a decent life in Shanghai.
Echo Han, 29, from Shanghai
Operation manager
I spend at least 4,000 yuan each month, mostly on transport and dining. As I'm working for a parent-children bonding workshop on Huaihai Road, I'm quite busy seven days a week, so I seldom eat at home.
A bag of plain bread is at least 8 yuan today, let alone fine dining at a restaurant.
The good thing is I seldom buy clothes or some other luxury goods, which saves me a large sum of money.
I need to vent my pressure, which is costly. From karaoke to suburban excursions, you also need money to buy yourself a peaceful moment or a good mood in such a big city.
