Hong Kong has been ranked seventh in competitiveness among 64 economic entities, falling two places from year, according to the latest report by Switzerland’s International Institute for Management Development (IMD).
In a statement, the government attributed the decline to last year’s pandemic upsurge, adding that the economy would perform better as the city restored connectivity with mainland China and the world.
The 2023 edition of the World Competitiveness Yearbook – an annual report that since 1989 has ranked economic entities – named Denmark, Ireland and Switzerland as the top three, with Denmark topping the chart for the second consecutive year.
Hong Kong, ranked the world’s most competitive economy in 2018, saw its position slip to seventh place this year.
The city’s ranking in three out of the four major categories – economic performance, government efficiency and business efficiency – had dropped. It used to be the global winner in government efficiency before falling to second place since 2022.
In 2019 Hong Kong was ranked second in business efficiency and 10th in economic performance: these rankings dropped to 11th and 36th respectively this year.
However, its position in the infrastructure category has been moving up gradually since 2019 – from 22th in 2019 to 14th in 2022. This year, Hong Kong was ranked 13th.
The report also suggested that sub-categories such as press freedom, democracy and population growth were the weak spots for Hong Kong. The rankings of press freedom, democracy and population growth were 55th, 53rd and 62nd respectively.
In a statement released on Tuesday, the government said the report recognised Hong Kong as one of the world’s most competitive economies, adding that its competitiveness was underpinned by “its distinctive institutional strengths” under One Country, Two Systems.
It said the slight fall in the overall competitiveness ranking was due to the epidemic upsurge and the weak economy last year.
“As the city resumes normalcy and restores full connectivity to the Mainland and the rest of the world, its economy will improve notably this year,” its statement read.
Simon Lee, an economist and honorary fellow at the Asia-Pacific Institute of Business at Chinese University, said on a radio programme he thought the fall in the ranking was due to the government’s delayed effort to resume normal operations, especially the delay in scrapping the flight suspension mechanism.
“What worries me the most is that some businesses may have already relocated to other regions, and it could be challenging for us to attract them back,” Lee said.
He said enterprises might consider Taiwan over Hong Kong despite the government’s efforts to attract talent and businesses, adding that Hong Kong was ranked lowest of all the economies in price competitiveness.
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