Hong Kong is the world's third most competitive economy

It topped macroeconomic stability, health, financial system and product market categories.

Hong Kong climbed four places to clinch the title of world’s third most competitive economy in 2019 with a score of 83.1, a 0.8-point improvement since last year, according to the World Economic Forum’s (WEF) 2019 Global Competitiveness Index.

Singapore took the crown of world’s most competitive economy at 84.4, whilst the US bowed out from the top spot after its score dropped 2 points to 83.7.

Also read: Hong Kong trails behind Singapore in economic competitiveness

Hong Kong features in the top 10 of eight pillars—a record—and outperforms the OECD benchmark on every pillar. Hong Kong ranks first on four pillars—the most of any economy—in which it is at, or near the frontier score of 100: macroeconomic stability (100), health (100), financial system (91.4) and product market (81.6).

The island city also ranked 3rd on the infrastructure as well as information and communications technology (ICT) adoption, with scores of 94 and 89.4, respectively.

However, WEF said that the city showed weakness on its limited capability to innovate, where it only ranked 26th. With a score of 63.4, it lags behind Singapore by 12 points.

Also read: Hong Kong fails to rank amongst the world's top innovative cities

Hong Kong was also penalised for “the lack of worker rights’ protection,” only scoring 10 to place 116th out of the 141 countries studied. This dragged down its labour market score to 75.8, or seventh overall. In contrast, Singapore’s workers protection score is 89, or 18th globally.

East Asia and the Pacific was identified as the most competitive region in the world, followed by Europe and North America. Japan also featured in the top 10, falling one place to rank sixth in the world; whilst Vietnam’s score improved the most globally, jumping 10 places to 67th place. But WEF noted that it is also home to economies with significant competitiveness deficits such as Cambodia and Laos, who placed at 106th and 133th respectively.

On a yearly basis global competitiveness improved by 1.3 points, driven mainly by the increase in information and communication technology (ICT) adoption. WEF calls the pace of global improvement “modest” as there is still a 40-point gap that is needed to bridge.

A large gap remains in health and macroeconomic stability. “Advanced economies perform consistently better than the rest of the world, but overall, they still fall 30 points short of the frontier,” the report read. On the innovation capability pillar, their average gap is over 40 points.

Global performance on product market slipped 0.6 points compared to 2018, which WEF said reflected the rise in international trade tensions—which reduce the markets that countries can access.