Business Hong Kong

HK world’s most competitive economy in Swiss ranking, but loses to Shenzhen in Chinese poll

Hong Kong has been ranked the world’s most competitive economy by a Swiss institute, but a Chinese institute has placed Hong Kong’s competitiveness second in its Chinese city rankings.

The World Competitiveness Yearbook 2016 released by Switzerland’s International Institute for Management Development (IMD) on Monday saw Hong Kong rise from second place last year to first place. It was followed by Switzerland, the US and Singapore.

HSBC Employees

Staff work inside the HSBC headquarters in Hong Kong. File Photo: REUTERS/Bobby Yip.

In a separate report on competitiveness released on Monday by the Chinese Academy of Social Sciences (CASS), a top think tank in China, Hong Kong was ranked behind Shenzhen for the second year in a row.

The IMD ranked 61 economies by surveying more than 5,400 business executives, asking them to consider economic performance, government efficiency, business efficiency and infrastructure.

IMD Director Professor Arturo Bris said the factors for the rise were Hong Kong’s consistent commitment to a favourable business environment, encouragement of innovation through low and simple taxation, free flow of capital, and its role as a gateway between the mainland and the global capital markets.

Confidence

Chief Executive Leung Chun-ying said the ranking showed that Hong Kong would be able to resist global downward pressure, if society made use of available opportunities and reduce internal conflicts.

“We should be confident about Hong Kong’s economy,” he said before an Executive Council meeting on Tuesday morning.

Financial Secretary John Tsang said in a statement on Tuesday that he was delighted by the ranking.

“In light of the fierce competition in the global arena, we will strive to uphold our prevailing competitive edge and continue to search for new growth areas, so as to strengthen our position as an international financial, trading and business centre and enhance Hong Kong’s long-term competitiveness,” he said.

Chinese Academy Social Sciences

Chinese Academy of Social Sciences. Photo: CASS

Innovations

Meanwhile, the CASS report said competition from major cities, namely innovative industries in Shenzhen and Shanghai, put pressure on Hong Kong.

The report also put Hong Kong first in the country for its section on “harmony”, meaning the corruption watchdog enforces the law strictly, making for a fair, open and corruption free society. It added that property prices and rents have decreased in Hong Kong and that living costs for middle class and grassroots families had been reduced.

But it said that there were conflicts in Hong Kong with some organisations and people using more radical and illegal means to oppose policies, affecting social harmony, as well as the tourism and retail sectors.

In response, Leung told reporters that Shenzhen was a model for Hong Kong in its development strategy and the results it received. He added that he was very willing to discuss with Shenzhen about cooperating on the topics of innovation and technology.

HK world's most competitive economy in Swiss ranking, but loses to Shenzhen in Chinese poll