Shanghai is the second costliest city in China for expats after Hong Kong, a survey by US human resource consultants Mercer showed yesterday. In world rankings Shanghai comes 14th, up two places from last year, with Hong Kong sixth. The survey, designed to help multinational companies and governments determine allowances for expatriate employees, covers 214 cities and uses New York as a base, measuring costs of housing, transport, food, clothing, household goods and entertainment. \"It is true that the cost of living is growing higher in Shanghai, but at the same time, the city offers improving living conditions that may fit in with the needs of expatriates,\" said Jeffrey Wang, vice president of the Shanghai Foreign Investment Development Board. \"Shanghai is a city that aims to become more and more international.\" Top of the list as the world\'s most expensive city for expats was Luanda, capital of Angola. Its ranking was mainly due to supply problems which meant that goods favored by expats were extremely expensive. Another African city, Chad\'s N\'Djamena, came fourth. Kate Fitzpatrick, a researcher at Mercer\'s London office, said one of the main reasons for the high positions of African cities was their bad infrastructure. She said imported products were expensive in such places and finding secure living accommodation that met the standards of expats was a challenge. Tokyo and Singapore claimed third and the fifth positions on the list while the other cities that made up the top 10 were Moscow (2), Geneva (7), Zurich (8), and Bern and Sydney (both 9). \"Recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices have impacted these cities and made them expensive,\" said Barb Marder, a senior partner at Mercer. Another Mercer executive, Nathalie Constantin-Metral, said: \"Overall, the cost of living in cities across parts of Europe has gone up in the ranking as a result of the slight strengthening of local currencies against the US dollar, whereas in Asia about half of the cities went down in the ranking - Japan especially - due to local currencies\' weakening against the US dollar.\"