By Yu Zhongwen
The United States, the world's biggest economy, has been replaced by Switzerland as the world's most competitive, with analysts attributing the change to the current global financial crisis.
According to a newly released World Economic Forum (WEF) report on Tuesday, the United States falls one place to second position "with weakening in its financial markets and macroeconomic stability."
China improved its position one place to 29th, making it the most competitive of the emerging economies.
Other economies in the top 10 are Singapore, Sweden, Denmark, Finland, Germany, Japan, Canada and the Netherlands, said the Global Competitiveness Report 2009-2010, which ranked a total of 133 economies worldwide.
The WEF has been issuing its annual Global Competitiveness Report since 1979. The rankings are calculated from both publicly available data and a comprehensive survey of business leaders worldwide.
US economy's competitiveness shrinking
A number of escalating weaknesses have taken their toll on the U.S. competitiveness ranking, according to the report.
The country's greatest overall weakness continues to be related to its macroeconomic stability, where it ranks 93rd, down from 66th last year.
The United States has built up large macroeconomic imbalances in recent years. Repeated fiscal deficits had led to burgeoning levels of public indebtedness, which were being exacerbated by significant stimulus spending, the report said.
More generally, given that the financial crisis originated in large part in the United States, it was hardly surprising that there had been a weakening of the assessment of its financial market sophistication, it added.
Head of the WEF Global Competitiveness Network Jennifer Blanke on Tuesday told Xinhua the global financial crisis had negatively affected some economies' competitiveness, particularly the United States. Blanke was speaking in Northeast China's Dalian, host city of the WEF's first "Summer Davos" economic forum, which is focusing on competitiveness at a corporate and national level.
"In areas such as financial markets and macroeconomic stability, some countries have been impacted. And the United States perhaps more than any other country," Blanke said.
"We've seen a very strong decline in confidence in the financial markets. In the United States, the confidence in the banking sector is particularly going down," said the senior economist.
"This is something the United States will need to focus on into the future to improve its competitiveness and also to get out of this crisis as strongly as possible," she added.
Chen Zhiwu, a Yale University professor, said in an interview with Xinhua that the U.S. government had been increasingly involved in the country's economic activities, which may have complicated impacts to the competitiveness of the country's economy.
The United States had survived past crises and kept its leading role of creativity based on its free market policy, said Chen, warning that more government interference in economic activities might result in lower economic dynamics.
China leading emerging economies
Meanwhile, the Chinese mainland continues to lead the way among so-called BRIC (Brazil, Russia, India and China) emerging economies, improving to 29th this year and solidifying its position among the Top 30, the WEF said.
Brazil and India have also improved, to 56th and 49th, respectively, while Russia fell by 12 places to 63rd, the Geneva-based body said.
WEF economist Thierry Geiger, associate director with the Global Competitiveness Network, spoke highly of China's economic performance during the past year.
"It's by far the best of the four largest emerging economies. So it's ahead of India, Russia and Brazil. We also see some room for improvements in certain categories, but overall China does quite well," Geiger said.
The rise of the Chinese mainland in the competitiveness ranking is mainly due to its enormous market and high growth rates in recent years, according to the report.
The Asian country's business environment and capacity to innovate were also improving quickly, the report said, adding that the country also enjoyed an enviable fiscal situation, which allowed the government to stimulate internal demand, invest in infrastructure, and pursue economic reforms.
But as China moves up the development ladder, its competitive edge could no longer be based on the use of cheap factors of production alone and increasingly must be based on efficiency improvements, the report said.
(Xinhua News Agency September 9, 2009)
