Hong Kong ranks second in the world for competitiveness in annual IMD study

Results of study by Swiss business school fly in face of report from Beijing think tank that showed city slipping behind mainland rivals

PUBLISHED : Thursday, 28 May, 2015, 5:55am
UPDATED : Thursday, 28 May, 2015, 9:17am

Hong Kong has beaten Singapore and Switzerland to be named the world's second most competitive economy behind the United States in an annual report by the International Institute for Management Development.

The Swiss-based business school ranked the city first in the world for efficient government and business efficiency, two of the four main factors considered in the rankings. That helped Hong Kong leapfrog Switzerland and the Lion City to move up from fourth place last year.

The report stands in stark contrast to a survey released earlier this month by the central government-backed Chinese Academy of Social Sciences. The think tank's annual Blue Book report named Shenzhen as China's most competitive city, knocking Hong Kong off top spot for the first time in a decade.

The IMD's study ranked 61 economies, with the United States placed first on the basis of its business efficiency, strong financial sector, innovation and effective infrastructure.

Mainland China climbed one place to 22nd in the IMD study, putting it just ahead of Belgium.

"A general analysis of the 2015 ranking shows that top countries are going back to the basics," said Professor Arturo Bris, director of the IMD World Competitiveness Centre.

"Productivity and efficiency are in the driver's seat of the competitiveness wagon. Companies in those countries are increasing their efforts to minimise their environmental impact and provide a strong organisational structure for workforces to thrive."

Looking ahead, the IMD said Hong Kong would face challenges from "the uncertainties in the global economy", in particular the normalisation of monetary policy in the United States.

Other challenges include the constraints on development potential posed by manpower mismatches and an ageing population. Hong Kong needs to "increase land supply for economic and social development", it added.

Lawmaker Regina Ip Lau Suk-yee, who chairs the Savantas Policy Institute, which recently launched a 15-month study of Hong Kong's competitiveness, said it was a "fair verdict".

But she questioned whether the city's ranking would have changed if the IMD had put more emphasis on factors such as innovation and technology.

Ip, who has been promoting innovation and technology to galvanise the local economy, also agreed Hong Kong's infrastructure lagged behind that of many countries.

"Major infrastructure projects have been subject to a lot of delays caused by filibusters" in the Legislative Council, she said.

The overall ranking released yesterday reflected more than 300 criteria, approximately two-thirds of which were based on statistical indicators and one-third on an exclusive IMD survey of 6,234 international executives.