Hong Kong is being outranked by Singapore in establishing a business-friendly environment and its position of being the business center in the country is being threatened by Shanghai, a survey conducted by MasterCard Worldwide revealed.

Among the 75 cities surveyed worldwide, the ranking of Hong Kong has dropped a position from last year to No.6 on the list while Singapore has moved up from No.6 to No.4.

Hong Kong can still retain its stronghold as a business center, but the city is outperformed by Singapore in many dimensions, the group's economic advisor Yuwa Hedrick-Wong said.

Singapore has performed better than Hong Kong in such aspects as having a stable legal and political framework, economic stability, ease of conducting business, financial flow, knowledge creation and information flow, and livability.

Hedrick-Wong said Hong Kong could still maintain its position as a financial center in China for the coming decade, but warned that the competitive edge of the city will be losing should the mainland open up the capital market and Shanghai continue to develop.

According to the survey, the ranking of Shanghai jumped from No.32 last year to No.24 fueled by improving quality of life and economic stability.

"Hong Kong is vulnerable because companies can now easily set up headquarters on the mainland," Hedrick-Wong said. "The setting up of regional headquarters in Hong Kong will not be as necessary as before."

An increasing number of headquarters of multinational corporations have been set up in Shanghai.

But he added that Hong Kong will still be attractive to businesses in the coming years.

Hedrick-Wong said Hong Kong should look into ways to improve English standard and attract more talents.

He said business representatives have expressed concern that English standard in the city has been declining.

He added that Singapore is aggressive and systematic in attracting overseas talents.

For example, Singapore embassies keep databases of professionals and talents which facilitate their search for high-caliber human resources.

The survey also found that London remained the most influential city in the global economy, while Tokyo continued to head Asia.

Other Chinese cities in the survey included Beijing (57), Shenzhen (60), Chengdu (72), and Chongqing (73).

(HK Edition 06/11/2008 page1)