Or perhaps not - because if you look a little more closely at the WEF's report, you'll find that business conditions have not improved one bit in Hong Kong since last year.

The WEF ranking is based on a survey. Companies are asked how they rate their local market in a number of different areas - quality of infrastructure, say, or efficiency of regulation.

For each question, a score of 1 would indicate things are as bad as they possibly could be, while a score of 7 would mean conditions are ideal.

Overall, Hong Kong scored 5.4 this year, exactly the same as last year. The city only moved up the ranking because Japan and Denmark slipped down. And if you compare this year's result with 2010's, Hong Kong's score has deteriorated slightly, indicating that local business people believe the city has actually got less competitive.

In any case, the real value of these surveys is not that they allow us to feel self-satisfied at how well we are doing, but that they highlight our weak points.

And Hong Kong's weak points are certainly revealing.

We get the hardware right. Hong Kong's infrastructure is top notch. Of course, being small helps, but it's still impressive that our telecommunications, port, airport and rail system all get top-three rankings. Even our road system makes the top 10.

Hong Kong also leads the world for the quality of its financial sector, with sound banks, accessible and affordable debt and equity financing, and competent regulation.

For the most part, we do well for the quality of our institutions. There's relatively little red tape. Our legal system works. Property rights are protected.

Our markets for goods and services are pretty efficient. It's easy to set up a business. There are no trade barriers. And tax rates are low.

But there are also some glaring deficiencies.

Our software is poor. Hong Kong ranks a feeble 85th for attendance at secondary school, lower than either the Philippines or Sri Lanka. And only 60 per cent of young Hongkongers go on to tertiary education, compared with 83 per cent of Taiwanese and everyone in South Korea.

So perhaps it shouldn't be too surprising that Hong Kong is rated poorly for its business sophistication, while for our capacity to innovate we rank below Guyana, best known for is exports of raw sugar cane.

It gets worse. For the effectiveness of company boards of directors, Hong Kong comes a lowly 28th in the ranking, just half as high as Malaysia.

Hong Kong's government is rated no better than the mainland's for its competition policy, while the city's markets are as dominated by a handful of big players as Indonesia's.

For the wastefulness of government spending, we rank alongside the spendthrift absolute monarchy of Brunei.

And for favouritism in awarding contracts to well-connected companies and individuals, our officials barely squeak in ahead of their counterparts on the mainland, where cronyism is rampant.

But perhaps most telling of all, when it comes to trust in our politicians, Hong Kong scores just the same as the mainland, where the ruling Communist Party is increasingly regarded as nothing more than a bunch of thieving thugs, and Liberia, whose former president Charles Taylor has just been sentenced to 50 years in prison for a string of crimes including murder, rape and slavery.

So on reflection, the WEF survey doesn't give Hong Kong all that much to cheer about.

On the other hand, it does tell our government and businesses exactly where they need to concentrate on raising their game.