China's economic competitiveness has risen remarkably, with its world ranking going up to the 19th place, a new study said on Thursday in Geneva.

The competitiveness of the U.S. is still the highest in the world, followed by Hong Kong and Singapore in a list of 61 countries and regions, the International Institute for Management Development (IMD) said in its annual World Competitiveness Yearbook.

But China's surge is the most outstanding, with its ranking rising from 31st last year to 19th, according to the Lausanne-based school, which is one of the world's leaders in management study.

The 2006 yearbook based its conclusions on four major factors of competitiveness, namely economic performance, government efficiency, business efficiency and infrastructure, with each contributing 25 percent of the overall ranking, according to IMD's World Competitiveness Center.

All the four factors for China have shown progress last year, with business efficiency having the most impressive jump, from a low of 50th last year to 30th this year, Suzanne Rosselet, deputy director of the center, told Xinhua in an interview.

China's economic performance has kept its outstanding place, ranked 3rd in the new list, while two other factors, government efficiency and infrastructure, stand at 17th and 37th respectively, she said.

Rosselet said China would have to overcome some major challenges in its future development.

Those challenges include diversifying the economy away from export dependency, moving up the value chain to higher added-value activities, especially in services, and diminishing high capital investment (risk of overheating), she said.

China also faces growing disparities between rural and urban areas, that could increasingly lead to greater social unrest, she said.

She added that China also faces environmental problems, urban unemployment, lack of social security network, failing infrastructure, etc..

Source: Xinhua