China moves up the global ladder

The nation's ranking improved by two notches on the back of advances made in the financial sector and the massive infrastructure construction, said the Global Competitiveness Report (GCR) 2010-2011, released by the World Economic Forum (WEF).

China has also increased its lead over other emerging economies like Brazil, Russia and India, whose rankings remained stable, the report said.

The nation is now ranked 27th in the GCR compared with 29th place a year back, the report said.

The GCR was based on the Global Competitiveness Index, which includes the 12 pillars of competitiveness such as infrastructure, macroeconomic environment, health and primary education.

"China has been rising and rising in recent years," said Jennifer Blanke, chief economist of the WEF. She said the gap between China and other BRIC nations (Brazil, Russia, India and China) is also increasing.

Brazil, India and Russia were ranked 58, 51 and 63 in the WEF report. Switzerland dislodged the US to grab the top slot.

"The biggest strength of China is its large and growing market," said Blanke. She expressed confidence that China will continue to rise in the ranking.

According to the report, China has scored well in several assessment factors such as market size and microeconomic environment, with rankings of second and fourth respectively. But in areas such as higher education and training, technological readiness and financial market development, the country still needs to make more advances.

"Most of the BRIC nations have been improving. But China's improvement has been more faster," said Robert Greenhill, managing director and chief business officer of WEF.

Speaking to China Daily, Greenhill said the global economy still faces uncertainties, as the present economic downturn is something that the world has never experienced before.

"We have avoided the fallout from a great depression. But we are still sailing in uncharted waters," he said.

The need of the hour is to enhance and enlarge the scope of cooperation between nations, he said.

China has made rapid advances in shifting its economic focus to innovation rather than efficiency, but it will take some time before the efforts bear fruit, said Greenhill.

Policy instability, and corruption and access to financing are still the major issues confronting investors in China, the report said.

Lingering concerns

For the US, the WEF report was not exactly a rosy one. The nation slumped to the fourth position as macroeconomic imbalances increased, public and private institutions weakened, and concerns remained about the state of the financial market.

Earlier this week, US President Barack Obama unveiled a new $350 billion stimulus package to alleviate the pressure on the American economy and boost domestic demand.

But Greenhill said other countries may not follow Obama's move, as it is becoming increasingly clear that most of the nations don't have the wherewithal for more stimulus packages. What is needed are smarter and more focused stimulus packages, rather than broad-based measures, he said.