Hong Kong improves its competitiveness ranking

Written 19.06.2005 17:45 by Esther Russell Print Send article

Hong Kong has jumped from fourth to second place in the IMD World Competitiveness Yearbook, a leading league table of the world's most competitive economies. The first place spot continues to be held by the United States.

Hong Kong?s comparative advantages are their business-friendly government policies, high productivity as well as overall business efficiency. However it was their poorer ratings in health and education that made them lose out on the number one slot.

The World Competitiveness Yearbook by the Swiss business school IMD placed Singapore, Iceland, Canada, Finland and Denmark in 3rd to 7th place.

On the whole, European economies remained "slightly disappointing" but stable putting Britain 22nd, Germany 23rd and France 30th. The report urged them to "revive domestic private consumption to sustain competitiveness as a whole".

Orthodox economic thinking about the link between taxation's role in generating or hindering competitiveness and growth was also questioned by the report.

The most competitive nations in the list include economies with a mixture of both high tax burdens (Luxembourg, Denmark, Finland, Norway and Sweden) and low ones (Australia, Estonia, Ireland and Switzerland).

"Tax policy is no substitute for competitiveness. The level and type of taxation can enhance or hinder competitiveness but cannot create it," Stephane Garelli of IMD said, underlining that only low corporate taxes may have a direct impact.

"The real 'engines' of competitiveness are science, technology, entrepreneurship, finance, logistics and education," he added.

Source: Channelnews Asia Business News