Hong Kong Drops to 7th Place in World Competitiveness Rankings 2023, Dropping From 1st Place in 2017

Cargo in Hong Kong. (Peter Parks/AFP)

Local media reported that the International Institute for Management Development had released its latest “World Competitiveness Yearbook 2023,” in which Hong Kong is ranked seventh globally, down two places from fifth in 2022. Hong Kong’s global ranking has been trending downward year by year, having been ranked first in 2017 and second in 2018.

Hong Kong's performance in World Competitiveness Rankings from 2017 to 2023. (The Epoch Times)

According to the report, Denmark ranked first for the second year in a row among more than 60 countries and regions evaluated globally, followed by Ireland and Switzerland. In the Asian region, Singapore ranked 4th, and Taiwan ranked 6th, one place ahead of Hong Kong.

It is reported that Hong Kong ranks second globally in “government efficiency” among the four competitiveness factors. Its ranking in “infrastructure” has also improved slightly. However, due to the impact of the pandemic, its ranking in “business efficiency” has slightly declined. The “economic performance” ranking also dropped due to significant economic weakness and negative growth in 2022.

Regarding sub-factors, Hong Kong ranks first globally in “business legislation” and in the top five in “tax policy, international investment, international trade,” and “technology infrastructure.”

Hong Kong's performance in World Competitiveness Rankings from 2017-2023. (The Epoch Times)

The Hong Kong government stated that the report recognizes Hong Kong as one of the most competitive economies globally. It pointed out that in 2022, “the severe pandemic significantly impacted“ Hong Kong’s economic performance, “leading to a decline in overall competitiveness ranking.” With Hong Kong returning to normalcy and restoring smooth connections with mainland China and the rest of the world, there will be significant improvements in its economy in 2023.

After losing the top spot to Singapore in 2018, the U.S. dropped to 10th place in the World Competitiveness Rankings for three consecutive years between 2020 and 2022. In 2023, it rose slightly to 9th place.

Simon Lee Siu-po, Honorary Institute Fellow at the Asia-Pacific Institute of Business, CUHK Business School, pointed out that Hong Kong’s economy has two areas of poor performance: “employment” and “local economy” in the sub-category of “economic performance,” ranking 45th and 56th, respectively. According to his analysis, the main reason for this was that the closure of Hong Kong’s border during the epidemic was too strict. “ Although it was not a lockdown at that time, a lot of activities were suspended. I think the biggest problem is that, as an international city, flights were suspended in a ’senseless’ way, during which people could not take the flight and didn’t know how to come here either.”

Simon also expressed concern about the loss of foreign business during the epidemic, which will take work to recover. “Now the Chief Executive is making a big fuss about attracting talent, but we have already lost tens of thousands of people. Besides Hong Kong, foreign investors can also consider Taiwan and Singapore, which have higher rankings. The high cost of living in Hong Kong makes the cost of doing business high. Why wouldn’t they consider other places if Hong Kong doesn’t bring significant returns for their businesses?”