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In the world competitiveness ranking the Chinese mainland has jumped from the 31st place last year to 19th in 2006 -- a dozen steps up the ladder -- according to the World Competitiveness Yearbook (WCY) published yesterday by the International Institute for Management Development (IMD) based in Lausanne, Switzerland.

 

The United States, Hong Kong, Singapore and Iceland are the top four holding onto the same positions as last year. They are followed by Denmark, Australia, Canada, Switzerland, Luxemburg and Finland. Taiwan’s competitiveness dropped from 11th spot to 18th this year.

 

Covering 61 countries and regions in the world, the ranking includes more than 300 evaluation criteria grouped into four competitiveness factors -- infrastructure development, business efficiency, economic performance and government effectiveness.  

 

The Chinese mainland has made significant progress in the four categories in the past year. It ranked 3rd on economic performance, 17th on government efficiency, 30th on business performance and 37th on infrastructure development.

 

According to Prof. Stephane Garelli, director of the World Competitiveness Research Center of IMD, when he was interviewed by the International Herald Leader, the competition in this field is more intense than ever before. The US still ranks as number one but other economies especially Hong Kong and Singapore are rapidly catching up.

 

Of the BRIC countries (Brazil, Russia, India and China -- four giants of economic development), the Chinese mainland had the highest ranking. This is a result of its strong economic development -- a 9.9 percent annual growth rate -- much higher than India (8.1 percent), Russia (6.4 percent) and Brazil (2.3 percent), said Prof. Garelli. Chinese mainland is more active in export and is also a powerful magnet for foreign investment and the rising mainland “middle class” had big purchasing power which stimulated the whole economy.

 

Garelli stressed that this year’s ranking of the competitiveness took a great deal of account of the contribution made by the government. With the annual economic growth rate of China as high as 9.9 percent, the Chinese government had to create an energetic economic environment to accommodate the development. Otherwise an unbalance of the economy and society itself could jeopardize the economic results achieved so far.

 

To hold onto and further improve the competitiveness of the country, the Chinese government required to take appropriate economic measures ahead of time, Garelli observed. The governments of Hong Kong and Singapore did well in coordinating the development of society and the economy which resulted in strengthening competitiveness. Finland and Denmark were similar in their approach to the issue.

 

The main challenge faced by the Chinese government, said Prof. Garelli, was how to keep its fast-growing economy under control to prevent it from over-heating. Moreover, the government required to do more to cater for the growing needs of the "middle class" in the cities. Last, but not least, the financial system of China remained weak and lagged behind in comparison to the competitiveness of manufacturing industries. The government required to pay a close attention to this.

 

Pan Yue, professor of world economy at the Party School of the CPC Central Committee, said that the world competitiveness rankings by IMD and World Economic Forum are the most authoritative in the world but the former had a longer history and was more acceptable to the world. It would have a positive effect on foreign investors. Western investors would be more confident of investing in the Chinese mainland because of the improved financial environment in the country.

 

Mr. Pan was quite optimistic when talking about the competitiveness of the Chinese mainland and the potential for further development. The government policy for that to happen was stable and the country’s economy was developing smoothly.

 

(China.org.cn by Xu Lin May 12, 2006)