Pandemic blamed as city slips in competitiveness ranking

Hong Kong ranked seventh in the World Competitiveness Yearbook 2023, slipping two places from last year.

The city continued to rank second globally in government efficiency, and its place in infrastructure improved to number 13.

The report by the International Institute for Management Development yesterday showed Denmark topped the list for the second consecutive year, followed by Ireland and Switzerland.

"All three are small economies that make good use of their access to markets and trading partners - as does Singapore, which came fourth," the yearbook said.

Hong Kong fell to seventh from fifth overall, surpassed by Taiwan in sixth.

Hong Kong's ranking in business efficiency fell 11 places from last year and a government spokesman cited the Covid-19 pandemic upsurge as the main reason. Its place in economic performance also dropped 21 places to 36th as the economy weakened and recorded negative growth in 2022.

Hong Kong continued to top the ranking in business legislation, and was among the top five in tax policy, international investment, international trade and technological infrastructure.

The yearbook said Hong Kong needed to ensure the resumption of economic activities, address the external economic environment, seize the development opportunities in the mainland and solve the problems of brain drain and land shortage.

A government spokesman said yesterday the ranking has recognized that Hong Kong continued to be one of the most competitive economies in the world.

This was underpinned by its institutional strengths under the one country, two systems principle, he added. The common law system, an independent judiciary, a favorable business environment and a low tax system also enhanced the city's competitiveness.

"Last year, the Covid-19 pandemic posed daunting challenges to Hong Kong and weighed heavily on our economic performance. As a result, Hong Kong's overall competitiveness ranking fell by two places from the preceding year. As Hong Kong resumes normalcy and restores full connectivity to the mainland and the rest of the world, Hong Kong's economy will improve notably this year," the spokesman said.

The government said Hong Kong's overall competitiveness ranking remained at the forefront, and the slight fall in the ranking was mainly because of the pandemic. But the SAR should stay vigilant because of intense competition.

It had adopted strategies to compete for talent and enterprises, stepped up investment in infrastructure, innovation and technology, and continued to increase land and housing supply.

Chief Executive John Lee Ka-chiu said Hong Kong will continue to play up its distinctive advantages of strong support from the mainland and close connection to the world, no matter how the US-China relationship develops.

"We have unique status and advantages under the one country, two systems principle. We are an international city that is close to China and connected to the world," Lee said.

"No matter how the US-China relationship develops, the SAR government will make good use of Hong Kong's advantages to enhance connections to the world. Hong Kong will play a good role as a connector to link mainland cities to international economies."