Asia is the largest continent on planet Earth, and also the most populous one. Four billion people strong, Asia accounts for 60 percent of the world’s population. For the other 40 percent, Asia represents a culturally rich and exotic place, where people can go to enrich their life, and grow as a person. Today we are going to look at the top destinations in Asia for expats and people looking to live and work abroad. The cities we will discuss include Singapore, Hong Kong, and Kuala Lumpur. We will look at the quality of living, cost of living, and the economic environment of the three cities. But first let’s learn a bit about the cities.
Singapore is a small city-state, situated on an island located in Southeast Asia and includes around 60 small islets (half of which are inhabited) in its surrounding waters. The climate is warm and humid throughout the entire year, with hot temperatures and large amounts of rainfall. The most important sectors in the Singaporean labour market are the electrical manufacturing industry, banking and finance, healthcare, and education.
Hong Kong is what you call a special administrative region (SAR) of China. This basically means that it has a different political system to mainland China. The SARs get a high level of autonomy in all facets of governing except defense, and foreign affairs.
The climate is quite warm and humid, with hot temperatures and large amounts of rainfall, especially during the summer months. The most important sectors in the Hong Kong labour market are finance, and international trade.
Kuala Lumpur is the capital city of Malaysia, and its urban region represents the most industrialised region in Malaysia, as well as the strongest economic region in the country. The climate is warm, and normally has no dry seasons. It is hot and wet throughout the entire year, with large amounts of rainfall. The most important sectors in the Kuala Lumpur labour market are finance, real estate, and insurance.
Quality of Living
For determining the quality of living of each city, we will take into consideration the 2010 Mercer’s Quality of Living survey, and we will take a look at HSBC’s Explorer survey to see how expats and foreigners experienced their stay in these cities. The cities that normally score well in Mercer’s survey are mid-sized cities in developed countries with high political and social stability, low population density, and large amounts of recreational activities.
Quality of Living in Singapore
In general, people that have lived and worked in Singapore speak rather positive about their experience in the Asian city. Most people found it quite easy to settle in, and get used to the Singaporean work culture. The access to healthcare, as well as the quality hereof, was rated very positively, together with the quality of the transportation system. However, expats found it very difficult to integrate into Singaporean culture, and make friends with the locals.
Singapore scores quite well on Mercer’s Quality of Living report. The city is ranked at 28 with a score of 103.5 (New York City index = 100), beating cities like San Francisco, Tokyo, and obviously New York City.
Quality of Living in Hong Kong
Hong Kong scores quite well by people that have experienced living and working there, and the overall quality of living is seen as very good. The quality of commute to work and local transportation is excellent, as well as the ease of finding accommodation in Hong Kong. Expats found it relatively easy to make friends in Hong Kong-based expats, but found it very difficult to make friends with locals. Expats found it very difficult to integrate and mix with the local culture.
Hong Kong does relatively well in Mercer’s Quality of Living survey, scoring 94.4 and ranking at 71.
Quality of Living in Kuala Lumpur
Expats in Malaysia tend to see their time in the country more positively than expats that went to Hong Kong and Singapore. Most expats in Malaysia are based in Kuala Lumpur.
Expats have a good experience when it comes to the local work culture, social life, and the quality of accommodation. They also find it much easier to befriend locals than in Hong Kong and Singapore, which also makes integrating into the local culture far easier than in the other two cities.
Mercer ranks Kuala Lumpur lower than Hong Kong and Singapore in terms of general quality of living. It ranks at 74 with a score of 90.4.
Winner – Singapore
Singapore is one of the best destinations in terms of quality of living. It is easy for the expat to find accommodation, get used to the local work culture, and transportation is excellent. Additionally, Mercer ranks Singapore far higher than Hong Long and Kuala Lumpur.
Cost of Living
For the cost of living we look at Mercer’s Cost of Living survey and look at where each city ranks. Additionally we compare the cost of housing, food, transportation, and healthcare of each of the three cities using the amazing comparing tool at Expatistan.com.
It is clear from the ranking of Mercer that there is a major difference in terms of cost between Singapore and Hong Kong on one hand and Kuala Lumpur on the other. Hong Kong is the most expensive city ranking at 8, followed by Singapore at 11. These two cities are comparable cost-wise to cities like Oslo, Copenhagen, and Zurich.
Kuala Lumpur is completely different story. The city is ranked by Mercer at 138, making it significantly cheaper than Singapore and Hong Kong.
Compared to Singapore, in Kuala Lumpur housing is 72 percent cheaper, food is 51 percent cheaper, transportation is 46 percent cheaper, and healthcare is 11 percent cheaper. And if you compare Kuala Lumpur to Hong Kong, food in Kuala Lumpur is 26 percent cheaper, housing is 58 percent cheaper, transportation is 20 percent cheaper, and healthcare 1 percent dearer. Kuala Lumpur is 40 percent cheaper than New York City, 45 percent cheaper than London, and 45 percent cheaper than Melbourne.
Winner – Kuala Lumpur
Kuala Lumpur is by far the cheapest city to live in. Mercer ranks it far lower than the other two cities, and when you compare the cost of housing, food, transportation, and healthcare, it becomes clear that Kuala Lumpur is a lot cheaper than other cities.
To determine how the economic environment looks like in Singapore, Hong Kong, and Kuala Lumpur, we will look at the most important business sectors of each city, the economic output of each city, the expected economic growth in 2011, the unemployment rate, and the income level that expats and foreigners can expect from each city.
The Economic Environment in Singapore
Singapore’s open trade environment, corruption-free government, and highly educated workforce, has made the city prosper immensely. Singapore’s economic policy combines an open market mentality with economic planning, and has come to be known as the Singaporean Model. In the first half of 2010, Singapore was the fastest growing economy in the world, with a whopping 17.9 percent GDP growth rate. The GDP growth of 2010 was 14.5 percent.
The most important business sectors in Singapore are manufacturing (18%), banking and finance, healthcare, and tourism. The finance sector contracted in Q3 2010 by 1.4 percent, but eventually grew by 16.9 percent in Q4 2010.
The city also contains one of the busiest ports in the world, being situated in a very strategic location, and having a very skilled workforce and great infrastructure. The port is especially good for entrepôt trade activities. The Singaporean economy is service based, amounting to three-quarters of Singapore’s GDP.
The GDP of Singapore is around 155 billion Euros, which is expected to grow in 2011 by approximately 5 percent. The unemployment rate in Singapore is around 2.2 percent.
In Singapore incomes can reach very high levels. In 2010, about 45 percent of all expats in Singapore were making more than 140,000 Euros a year. Singapore also has a very low income tax rate, making it, according to HSBC, the seventh city with the highest average disposable income in the world.
The Economic Environment in Hong Kong
The economy of Hong Kong is considered to be the freest economy in the world since 1995. Its economic policy is characterised by a positive non-interventionist vision. The state will normally only intervene when sectors with social responsibilities run into trouble. Also important to know is that all land in Hong Kong is owned by the state, and is only leased to companies and individuals.
The most important business sectors in Hong Kong are banking and finance (25%), and international trade (26.4%). Hong Kong is definitely a service economy, with more than 90 percent of the city’s GDP coming from the service sector. The city didn’t escape the financial crisis, but thanks to a sound banking system, it’s doing reasonably well.
The GDP of Hong Kong is about 225 billion Euros, and it is expected to grow by 4 to 5 percent in 2011. The unemployment rate is around 4.5 percent. Hong Kong is also a place where many expats (35 percent) earn more than 140,000 Euros a year. Most people coming from abroad say they earn more after relocating to Hong Kong. Tax rates in Hong Kong are very low, and HSBC ranks the city 9th on its disposable income ranking.
The Economic Environment in Kuala Lumpur
Kuala Lumpur is the economic and business centre of Malaysia. The city is considered to be an alpha world city, which recognizes Kuala Lumpur as one of the most important nodes in the global economic system.
The most important business sectors in Kuala Lumpur are finance, real estate, and insurance. This explains the large amount of local and foreign banks and insurance companies that are present in the city. 83 percent of the economy is based on providing services. The remaining 17 percent represents the manufacturing and construction sector.
The GDP of Kuala Lumpur is around 17 billion Euros, which is expected to grow by 5.2 percent in 2011. The unemployment rate is around 3.5 percent. The salaries in Malaysia are far lower than in Singapore and Hong Kong, but are not terrible. However, the life that expats live in Malaysia is seen as more luxurious than that of the expats in either Singapore or Hong Kong. Looking at disposable income, Malaysia is ranked 11th, lower than the other two cities.
Winner – Singapore
Singapore is a very wealthy city-state, with great economic opportunities for expats and foreigners. The city has a very low unemployment rate, and a healthy economic growth rate. Expats in Singapore also earn more than expats in Hong Kong or Kuala Lumpur. Overall, we believe the economic environment in Singapore to be the best of all three cities.
Overall Winner – Singapore
Singapore has the best quality of living according to Mercer, and also scores well in the most important factors for people working abroad: accommodation, transport, and getting used to the work culture. On top of that, Singapore has the best economic environment of the three cities, with a very healthy growth rate, very low unemployment rate, and high earning potential for expats. The fact that Singapore is the most expensive city doesn’t distract from the point that the city is probably the best place to live and work in Asia.
Honorary Mention – Shanghai
Shanghai is probably the best expat location in mainland China. It is a huge city, the most populous in China with 22 million citizens. The amount of economic activity going on in Shanghai is almost indescribable. It is the business and financial centre of China and it is expected to grow by 8 percent in 2011. Foreigners and expats normally have trouble mixing with the locals, but find it relatively easy to come into contact with other expats, since they tend to stick together and form their own communities. Mercer ranks Shanghai in terms of quality of living at 98, a bit lower than Hong Kong and Kuala Lumpur. In the cost of living survey, Mercer ranks Shanghai at 25, cheaper than Singapore and Hong Kong, but still more expensive than Kuala Lumpur. All in all, if you’re interested in working in Asia, you should definitely also take a look at what Shanghai might have to offer.
Next week we will present our article about Australia and New Zealand, which are very popular locations for expats, students, and other foreigners looking to live or work abroad. If you want to see a particular city or aspect mentioned in next week’s article make sure to contact us and we will take it under consideration.
See you all next week!
Joseph Cavanna, ELM Team