Hong Kong falls off the competitive edge in overall China rankings

City loses second place in overall China rankings and nosedives off top spot when it comes to rating effective government

PUBLISHED : Wednesday, 19 June, 2013, 12:00am
UPDATED : Wednesday, 19 June, 2013, 4:16pm

Hong Kong has plunged from China's second most competitive region to its fifth, according to a think tank that blames it on slower economic growth and weaker governance.

As part of the calculations for the China Institute of City Competitiveness survey, Hong Kong also lost the No 1 spot for most effective government and dropped out of the top 10 altogether.

The annual ranking exercise saw Hong Kong overtaken by Jiangsu , Shandong and Zhejiang provinces in terms of overall competitiveness over the past year.

The previous year saw it second only to Guangdong province. Shanghai's ranking was unchanged in seventh place.

"Hong Kong's overall competitiveness has been on a track of decline, but it dropped more significantly over the past year," said Gui Qiangfang, vice-chairman of the institute.

"Economic growth also slowed to 1.4 per cent last year, down from 4.9 per cent in 2011," he said. "The strength in innovations has further declined over the past year. The effectiveness of governance also dropped amid political rivalries."

Shanghai is now closer to Hong Kong in terms of competitiveness, but both are losing out in terms of speed of growth. Gui said: "Chongqing , Tianjin and Shenzhen are doing very well. Shenzhen has seen major developments in the property market and culture industries."

The survey has now been running for 12 years. It takes into consideration ratings for areas such as growth potential, livability, innovation, environment, economic development, social development and culture.

For another year Hong Kong was left out of the top 10 list of most innovative cities. In terms of potential for growth, Hong Kong's ranking dropped from 13 to 17. Shanghai stayed at 14, while Tianjin topped the chart.

To increase competitiveness, the Hong Kong government should rethink its policies over pillar industries, Gui suggested. It should also put more effort into high-tech industries and innovation, he added.

Former chief executive Donald Tsang Yam-kuen had listed cultural and creative industries; medical services; education services; innovation and technology; testing and certification services; and environmental industries as the six "new pillar industries" to be nurtured in Hong Kong.

His successor Leung Chun-ying has removed medical and education services from the list.