China cost of living killing dream for expat workers

Published:  17 May at 6 PM
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According to a survey by a relocation company, twice the number of expats are leaving China than are arriving, due to the country’s escalating cost of living.

Up until recently, a relocation to Chjna was a must-have for adventurous expat professionals, especially those seeking high-tech jobs. Since the slow-down in the Chinese economy, the gloss has faded and many are packing up and returning home.

Air pollution, the soaring cost of living in major Chinese cities and decreasing benefit packages are all reasons for the sharp decline in interest amongst expats looking for the next hot location. Multinationals and Chinese companies are now cutting labour costs, making a satisfactory expat lifestyle increasingly unaffordable.

One American software engineer who’s been living and working in China for five years is now moving back to the USA with his wife and family. Benefit packages, he says, are being reduced and the cost of international-standard education for his two kids has risen year on year.

The study, undertaken on behalf of UniGroup Relocation, shows the numbers of expats relocating to China fell by 22 per cent in 2014, and is continuing to decrease. Local international schools’ tuition fees have soared over the past two years by as much as 40 per cent, with most packages still including full housing and health insurance costs but only a very basic education allowance.

In general, packages are not being updated to take account of overall rising costs of living in China’s cosmopolitan cities. Some international companies are shrinking the packages, making it even harder for expats to maintain a reasonable standard of living.

Another respondent, herself a departmental director at an international school, tells of decreasing benefits across the board. She first arrived in China in 1988, along with a host of highly qualified, experienced and enthusiastic expats on full packages, and has watched financial perks decline considerably over the past five years.

It’s not just the multinationals who’ve slashed the value of their packages, she says, as local Chinese companies offering local packages are even more parsimonious as regards benefits. One annoying change, she adds, is the reduction in health insurance coverage from private international clinics to local Chinese public hospitals.
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