Hong Kong tops World Competitiveness Rankings
Hong Kong's economy has beaten out Switzerland and the USA for the top spot in the IMD World Competitiveness Rankings.
The research, conducted by the IMD World Competitiveness Center, uses an analysis of over 340 indicators of economic performance, infrastructure, government and business efficiency to determine the most competitive global economies.
This is the first time since 2012 that the USA has failed to achieve first place.
The ranking has been published every year since 1989 and is widely regarded as the foremost annual assessment of its kind.
Data from more than 60 countries was collated for the 2016 study, including the UK in 18th place after a marked decline in economic performance compared with last year.
It placed just behind New Zealand and Australia, in 16th and 17th positions respectively, who suffered from consistently poor international trade figures.
China (Hong Kong) and China (Mainland) are counted as separate economies with the latter placing 25th.
Professor Arturo Bris, Director of the IMD World Competitiveness Center, said: “The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.
“Nations as different as China (Mainland) and Qatar fare very well in terms of economic performance, but they remain weak in other pillars such as government efficiency and infrastructure.”
|IMB World Competitiveness Rankings|
|1. China (Hong Kong)|
|7. Republic of Ireland|
|8. The Netherlands|
The study suggests some of the most impressive strides in Europe have been made by Eastern countries, namely Latvia, the Slovak Republic and Slovenia.
Western European economies have also continued to improve, with researchers highlighting the ongoing post-financial-crisis recovery of the public sector as a key driver.
However, with the exception of Hong Kong and Singapore, the research also suggests that Asia’s competitiveness has suffered an overall decline as Taiwan, Malaysia, Korea Republic and Indonesia have all dropped significantly since 2015.
Hong Kong's success as a leading banking and financial sector has reportedly been largely due to a focus on innovation, low and simple taxation and a lack of restrictions on capital flows into or out of the territory.
The historical data from the rankings, spanning more than 25 years, has lent credence to fears that 'the rich are getting richer and the poor poorer'.
Professor Arturo commented: "Unfortunately, the problem for many countries is that wealth accumulation by the rich doesn’t yield any benefits for the poor in the absence of proper social safety nets.
“Innovation-driven economic growth in poorer countries improves competitiveness, but it also increases inequality. This is obviously an issue that demands long-term attention."