Global Competitiveness Report ranks city in 9th place and Singapore No 2

The Hong Kong economy has edged up two steps further to be ranked as the world's ninth most competitive economy in the world albeit still lagging far behind its arch rival Singapore which was ranked the second most competitive, according to the Global Competitiveness Report 2012-2013 released by the World Economic Forum.

The report said that Hong Kong's economic competitiveness lay in its infrastructure pillar, efficient financial market and the dynamism of its local goods and labor market.

"Hong Kong tops the infrastructure pillar with its outstanding quality of all modes of transportation and its telephony and electricity infrastructure. The city's financial markets are second to none, and the dynamism and efficiency of the local goods and labor market further contribute to the economy's very good overall positioning," the report said.

However, the report cautioned that Hong Kong must make continued improvements in higher education and innovation to maintain and enhance its competitiveness going forward.

"The student participation rate in higher education in the city remains below levels found in other advanced economies. Hong Kong must also improve its innovative capacity which remains constrained by the limited engineers and scientists," the report warned.

Compared to Hong Kong, Singapore retained its second position because of its outstanding performance across the entire index. According to the report, the city-state has world-class infrastructure, efficient goods and labor markets and good financial market development. Moreover, the city-state's competitiveness is reinforced by a strong focus on education which has translated into a steady improvement in the higher education and training pillar.

"Actually the Hong Kong government already has made a lot of investment in higher education and has cultivated many talents for the city's economic development," said Chong Tai Leung, a finance professor at the Chinese University of Hong Kong's Institute of Global Economics and Finance. "Maybe the talents in Hong Kong are not so proficient in the use of English than the Singaporeans."

"The local exorbitant rental level is a factor that deters companies from expanding their operations in the city, hence diminishing the city's economic competitiveness," Chong cautioned.

With the exception of the city's high rental level, Chong said that the Hong Kong economy possesses many other advantages and the geographical proximity to the mainland market is one of the niches that the city can leverage on.

oswald@chinadailyhk.com

(HK Edition 09/06/2012 page2)