Outside ranking tells only part of China's story

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Last updated at: (Beijing Time) Wednesday, November 19, 2003

Outside ranking tells only part of China's story

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China's slide in ranking in the Global Competitiveness Report reveals that there is a pressing need for the nation to sharpen its commercial competitive edge and for the Chinese Government to change its role in directing the economy, said an article in the Beijing-based periodical International Finance.

In the latest Global Competitiveness Report covering 102 countries and regions, China's competitiveness in economic growth and in commerce ranked 44th and 46th, respectively, compared to 38th in both areas a year ago. It fell from the 33rd to 44th in comprehensive competitiveness in the Global Competitiveness Rankings.

The report is published yearly by the World Economic Forum to analyze countries' current economic situation and probe into their growth potential.

The article said China still has a long way to go in bringing technological innovation and its public institutions up to international standards.

"What counts is not the rankings, but the problems hidden behind them," the article quoted Lopez Clara, a celebrated economist, as saying.

On the surface, talk of a blunting of China's commercial competitiveness seems to contradict the picture of China's spectacular economic development. This has led many scholars to argue that the reliability of the report is questionable.

Such doubts may have some justification, but China should take a deeper look at itself, said the article.

The Global Competitiveness Report ranks each country or region after analysis of a variety of areas such as the macro economic climate, the legal system, public services, and the consistency of government policies.

The report pointed out that many of China's industrial technologies are more imitative than they are creative.

A more serious problem is that China scores very low in the report's rating of corporate governance and the overall commercial environment, which led to China's fall in the ranking of commercial competitiveness, according to the article.

The old measure of gauging the government's performance merely by country's economic growth rate is not correct, the article said, adding that the quality of public policies and the protection of property rights are more important measures of the government's work.

In the report's survey of Chinese entrepreneurs, 17 per cent of respondents complained that poor financing services are the biggest problem hindering commercial activities.

Although China has taken bold moves to downsize government bodies and has deregulated many social and economic matters in recent years, low efficiency, inconsistent policies and corruption are still major concerns of entrepreneurs.

"The key to China's reform has shifted from fostering business to improving the work of government," economist Wu Jinglian commented recently at a forum.

The article said government regulation is necessary in many areas as the market is still immature, but the misuse of government power should be checked.

It is time for China to step up the fight to curb corruption and improve the efficiency of government, said the article.

Beyond the global competitiveness ranking, China must look within the operations of government administration and the ways of doing business in the country if it is to find ways to improve itself. The focus of concern has to be within, the article said.

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