On world ranking of China's competitiveness

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Last updated at: (Beijing Time) Thursday, November 27, 2003

On world ranking of China's competitiveness

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China has seen its place down on the ranking list of WEF's Global Competitiveness Report 2003-2004. Some argued that this ranking system presented neither a precise nor a panoramic picture of real China. But it did tell us the fields on which something more should be done by China to further push forward its development. Anyhow, what's behind the ranking matters much more than the ranking itself.

The Global Competitiveness Report 2003-2004 released recently by the World Economic Forum roused great hubbubs among various circles in China. The Report placed China's growth of competitiveness at the 44th place among 102 countries and regions, and its competitiveness in business at the 46th out of 95 countries and regions in the world, indicating a respective 4 and 7 notches down from the two indices as compared with those of the previous year. This result does not seem to be in gear with the fast economic development in China. Some scholars asserted that the report does not present an accurate picture of the economic situation in China.

In fact, there is no need to make a fuss about the ranking. Dr. Augustus, chief economist and drafter of the report from the World Economic Forum, has admitted in his interview Nov.6 in Shanghai the limitations the report intrinsically bears. Results often vary with the different index systems on which they build. No single report, therefore, will be technically mature enough to give a panoramic view of China.

The International Institute for Management Development in Lausanne, Switzerland, also has its version of Global Competitiveness Report. It uses an index system different from that of the World Economic Forum, which naturally leads to different results. For example, the Global Competitiveness 2001 put the US on the top of the world while the World Economic Forum placed Finland at the first place. Then, the question is whether it means the global ranking program of competitiveness is nothing but a game? The writer of the article says no.

Too much argument about the ranking result is not necessary, as I have said. However, what the downturn movement betrays deserve our attention. What really matters is that behind the result rather than the result itself as Dr. Augustus said.

The benchmark for the ranking system of the World Economic Forum is established on the macroeconomic index, tech index, and quality of public services. China scored high for its macro-economy, being ranked at 25th place. But China stood respectively at the 65th and 52nd places for the other two. This means that it was the weak tech innovation and the low efficiency in operation mechanism for public service that dragged China's ranking down. Despite the remarkable progress China has made on the tech front, the tech gap is still widening between the developed countries and China as China has paid too much attention to tech copying and import while neglected tech innovation and software introduction. Some scholars even alarmed that China has lost its creativity in almost all industries. Japan serves a lesson for China to draw some useful experiences. The neighbor of China has been wrestling in the quagmire of bubble economy for over a decade. This is due to its too much concentration on imitation yet inadequate innovation. With regard to the public service system, 17 percent of the entrepreneurs responding to the research thought that inefficient administration is one of the problems they must face in their business campaign in China. All this justifies well the necessity for enhancing the transparency and working efficiency of the government through a further reform of the administration system in order to spur the economic and social development in China.

Another point deserves our attention is that the ��government expenditure�� is for the first time replaced by the WEF with "government waste" as its sub-index in the ranking system. It is the alteration in the ranking system that underlined China's 4 scales down on the list of competitiveness. The index actually involves the most important two aspects, referring to the government spending, the regulatory system and the efficiency of utility. An apt example is about the cars that are exclusively used by government officials for their businesses at the public expense. Statistics by department concerned shows that the transportation cost of social vehicles in China averages RMB 8215.4 yuan for every 10,000 km while that of autos for official use amounted to as high as tens of thousands. Taxis run five times more efficiently than those cars for official use at a cost of 13.5 percent of the latter. This points clearly to the low utility of the public fund in some aspects. The reason lies in the absence of effective mechanism to curb the use of public finance. Bearing this in mind, we can easily come to a conclusion that China's downturn of 4 places on the ranking list is an understandable result.

The downturn on the global list of competitiveness has served a dose of sobriety to China's brisk economy and offered many a tip good for the economic development in China. Citing the gap between China and India on the list for example, India, another large developing country like China, ranked at the 38th place in terms of its global competitiveness, being 9 places over that of China while last year it only witnessed one place ahead of China. Whoever views the problem objectively knows it to be a sign for bewaring. However, some Chinese are used to adopting a bias attitude in looking at the world. For these people, it's good for China to lead the world. If not, they would either deny the fact or insist that China has ever led the world in ancient times in this field. For example, when foreign planes took off, they said China had conducted flight trials as early as in the Ming Dynasty some hundreds of years ago. When other countries invented robots, they said China made mobile wooden cattle and horses in the period of the Three Kingdoms thousands of years ago. This arrogant mentality will land us in a predicament of lagging behind.

The ranking has other two constructive points. One is that China still has a long way to go in the development and the other being that it has come to know the Achilles' heel that needs to make up. To set off from this viewpoint, the ranking result would help China make point-to-point endeavors and decisions, instead of bringing any losses.

Article from "Global Times" and translated by PD Online staff member Lijia

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