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China 17th competitive economy, study finds
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China dropped two places to 17th in the latest World Competitiveness Yearbook compiled by Swiss business school IMD, but its position has generally continued rising in recent years, the compilers said yesterday.

This year's drop isn't statistically significant, and "China has been on the upward path" in recent years, IMD World Competitiveness Center research fellow Suzanne Rosselet said. In 1995, China ranked 34th.

Rosselet said many factors have contributed to the drop, such as domestic price hikes and the environmental costs of development.

The US continued to top the competitiveness rankings for the 15th consecutive year despite signs its economy is declining.

The IMD economists said the report was based on 2007 data that don't reflect the US' current economic woes. "The big question is whether the United States will be No 1 after this year," project director Stephane Garelli said.

Singapore and China's Hong Kong kept their respective second- and third-place rankings, and the gap is narrowing between these two economies and the US', the IMD study said.

Switzerland climbed two places to fourth.

Among the so-called "golden BRIC" countries, Brazil jumped six places to 43rd; Russia dropped by four to 47th; and India dropped two places to 29th.

The study evaluated 55 economies using 331 criteria to measure how those nations create and maintain favorable business conditions. Such factors as economic performance, government efficiency, business efficiency and infrastructure are major criteria for the measurement. In economic performance, China ranked No 2, and it ranked 12th in government efficiency.

"China is an economic miracle by any standard," John Wells, who became head of IMD in April, said yesterday in Beijing.

But Rosselet said China's rapid economic growth has come at a cost.

Its exports, for example, have provided inexpensive products for Western countries, but also consumed a lot of resources and produced a lot of pollution in the country, analysts said.

Rosselet also said the Sichuan earthquake, which devastated the province last Monday, would have a marginal impact on the "resilient" Chinese economy. In addition, the government's transparency and openness in dealing with the disaster would boost its international image, she added.

(China Daily May 22, 2008)

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