“Connecting Global Cities” is a monthly column written by Colin Speakman, Resident Director for CAPA Shanghai.
New York may have been unhappy at being knocked off the top spot on A.T. Kearney’s Global Cities Index by London, but they will be happier to note that a survey of global cities by “economic power,” compiled by Oxford Economics, puts them at number one.
Photo: George Washington Bridge from public domain
Economic power here is measured by GDP of different cities when converted to U.S. dollars and Oxford Economics have produced an interesting list. However, there are some important caveats. Firstly, the survey is future focused to project the ranking by 2030, not the current state of play—and things can change.
The second aspect to be aware of is that some cities in the survey stand alone whereas others take in a wider area. New York at number 1 uses the GDP of the area defined as New York-Newark-Jersey City. Having visited that area many times, I realise that locals would make a distinction between a New Yorker and someone from New Jersey, though they are well-connected by the George Washington Bridge!
The projected figure for this New York-Newark-Jersey City economic powerhouse is $573 billion in USD with October 2015 exchange rates used for comparison. The projected number two is none other than my base—the global city of Shanghai at $481 billion USD. I cannot help thinking that if this area read as “Shanghai-Hangzhou” it would be number one.
Photo: Shanghai towers by Colin Speakman
Given that Shanghai’s own economic planning has the goal of being a leading by global city by 2035, perhaps we should extend the projections five years?
China cannot complain though as the economic power of their global cities is well-reflected in the survey.
Let’s take a look at the top 10:
- New York-Newark-Jersey City ($573 bn)
- Shanghai ($481 bn)
- Tianjin ($410 bn)
- Beijing ($390 bn)
- Los Angles-Long Beach-Anaheim ($342 bn)
- Guangzhou in Guangdong ($335 bn)
- Shenzhen ($333 bn)
- London-Metro ($312 bn)
- Chongqing ($282 bn)
- Suzhou in Jiangsu ($259 bn)
So there are seven Chinese Global Cities in the projected top 10 for economic power.
What will it cost to live in these economic powerhouses? It is too far out to project but we can look at current surveys. The Mercer Consulting survey of the most expensive cities for ex-pats to live showed the following for 2017 and produces some interesting results when converted to USD.
Photo: Zurich from public domain
I believe the answer to the most expensive should be in party quizzes. The most expensive place for ex-pats is not a global city; it is Luanda the capital of Angola. This is because quality facilities and housing to meet ex-pat expectations are very scarce and there are security costs, so all add up to being “expensive.” Not a lot of people know that!
The other expensive cities to live in as a foreigner are global cities and only reflect the economic powerhouses to a limited extent. New York is in the top 10, but at number 9; Shanghai is more expensive at number 8 and is the most expensive city to live in on the mainland of China (ouch!)
Photo: Singapore from public domain
“Greater China” gets the top global city for cost of living which is Hong Kong—it has a relatively small land area so housing prices reflect that. A similar explanation accounts for the small island country and city state of Singapore. Of course, these examples are all too small to be economic powerhouses by absolute GDP.
In Europe, Switzerland is a relatively small land area with high salaries so three global cities from Switzerland are in the top 10 for living costs—Zurich, Geneva, and Bern.
Here is the list of the top 10 most expensive cities for ex-pats to live:
- Hong Kong
- New York City
As we can see, half are in Asia. Remember, it is Asia’s Century!
So, we see that globalization reflects in global workforces but this sometimes comes at a high cost of living. Stay tuned for more insights next month.