Hong Kong has slipped two places to 24th in a growth-competitiveness index, with Finland named the world's most competitive economy for the second year running.
The mainland fell six places to rank 44th in the World Economic Forum index, which measures the potential of global economies to achieve economic growth over the medium and long term.
The United States came second, followed by Sweden and Denmark. Taiwan and Singapore ranked highest among Asian economies, in fifth and sixth place respectively, each rising one place from last year.
The index is based on the macroeconomic environment, quality of public institutions, and technology, combined with an Executive Opinion Survey, which received 7,741 responses this year.
Hong Kong's strengths were low crime and taxes, political stability, infrastructure, cross-border capital mobility and low corruption. Its weaknesses included the perception the bureaucracy was inefficient, the workforce inadequately educated and policies unstable.
Augusto Lopez-Claros, chief economist of the forum, said: 'If there is one lesson to be drawn from our exercise, it is that the strength and coherence of government policies have an enormous bearing on a country's ranking.'
