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Friday, May 29, 2015, 09:18

HK is second most competitive economy

By Selena Li in Hong Kong
HK is second most competitive economy
Despite a recent survey showing Hong Kong has moved up from fourth to second place in the global competitiveness rankings - right after the US - worries over the SAR’s ability to innovate have intensified as startup incubators are sprouting in Shenzhen, providing a favorable environment for thousands of technology enterprises to thrive. (Lam Yik-Fei / Bloomberg)

Hong Kong has moved up from fourth to second place — after the US — in the widely-followed global competitiveness survey by the Switzerland-based International Institute for Management Development (IMD).

The institution cited, in particular, Hong Kong’s strength in business efficiency and financial acumen in addition to its traditional advantages, including the rule of law and a low and simple tax regime.

The SAR fell to fourth place in last year’s survey, but jumped two slots this year, putting it ahead of perennial rivals Switzerland and Singapore.

Best ranking economies, according to the report, share the commonality of high business efficiency. Nine countries and regions from the top 10 are cited for their excellence in this particular criterion. “Simply put, business efficiency requires greater productivity and the competitiveness of countries (and regions) is greatly linked to the ability of enterprises to remain profitable over time,” said Arturo Bris, director of the institution’s World Competitiveness Center.

The survey has cast Hong Kong in a better light compared with another poll conducted recently by the Chinese Academy of Social Sciences, which downgraded Hong Kong to second spot after Shenzhen in overall competitiveness among major mainland cities. But economists said the two polls were based on slightly different criteria with the academy putting greater emphasis on industrial prowess, which Hong Kong obviously lacks.

However, the worries about the SAR’s ability to innovate have intensified as startup incubators are sprouting in Shenzhen, providing a favorable environment for thousands of technology enterprises to thrive.

Shenzhen allocated 4.05 percent of its GDP to research and the development for innovation and technology last year.

In the Swiss survey, the Chinese mainland moved up one spot from last year to 22nd owing to “improvements in education and public expenditure”. Weakened by aging infrastructure, the rankings of most other Asian economies declined, with Malaysia falling from 12th place to 14, Japan (21 to 27), Thailand (29 to 30) and Indonesia (37 to 42).

Taiwan moved up from 13th spot to 11, so were the Republic of Korea (26 to 25) and the Philippines (42 to 41).

The IMD World Competitiveness Yearbook measures how well countries manage all their resources and competencies to facilitate long-term value creation.

The overall rankings released on Thursday reflect more than 300 criteria, approximately two-thirds of which are based on statistical indicators and one-third on an exclusive IMD survey of 6,234 international executives.

selena@chinadailyhk.com
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