Entrepreneurship sees the city move up six spots in the international survey of business and economic efficiency Hong Kong has risen to fourth most competitive small economy in the world, while the mainland is steady at 12th among large economies, according to an international survey of business and economic efficiency. Finland took top spot among countries or regions with populations of less than 20 million, followed by Singapore and Denmark. Hong Kong rose to fourth from 10th place last year, according to the World Competitiveness Yearbook 2003, compiled by IMD, a business school in Lausanne, Switzerland. In economies with 20 million people or more, the United States came first, followed by Australia and Canada. China took 12th spot, the same position it has held for two years. Zhejiang province on the east coast took 14th spot. For the first time since the survey began in 1989, IMD, also known as the International Institute for Management Development, split the rankings into 30 large economies and 29 small ones and added eight regional economies, including Zhejiang. Hong Kong's strong points include widespread entrepreneurship, senior managers with plenty of international experience, flexible labour regulations and strong exports. The report was prepared with the help of the Trade Development Council. 'Singapore and Hong Kong are making a strong comeback,' said Stephane Garelli, a professor at IMD and director of the competitiveness project, in the report. 'However, this was before the Sars epidemic, which could have dire consequences.' Hong Kong's weak points include the high cost of living, the unemployment rate and exchange rate, pollution and high pay for managers. The IMD looked at 321 criteria in making its assessment. The mainland is cited for its investment in telecommunications, low rate of industrial disputes and legislation encouraging business competitiveness. 'China mainland, and especially Zhejiang province, stand out with formidable growth rates of 8 per cent and 12.3 per cent,' Professor Garelli said. 'Despite all the economic turmoil, China is on its way to becoming the manufacturing centre of the world.' Negative factors for China include poor access to capital markets for foreign companies, senior managers with little international experience and a lack of qualified engineers. Globally, the report says the world is not going through a recession but is experiencing 'economic anaemia'. Two major issues that will affect Asia's competitiveness are battling terrorism in the aftermath of wars in Afghanistan and Iraq and the spread of Sars. Hong Kong scores well in competitiveness and freedom surveys. In November, the conservative US Heritage Foundation ranked it No1 for the ninth year in a row in its economic freedom index. On the same day, the World Economic Forum rated Hong Kong 17th in terms of global competitiveness.