Hong Kong ranks No 2 in global competitiveness with best showing in 7 years
City trails first-place Singapore out of 70 economies surveyed by Switzerland-based International Institute for Management Development
Hong Kong has ranked as the second-most globally competitive economy – its best performance in seven years – climbing one spot from last year to place behind Singapore.
The ranking, released by the Switzerland-based International Institute for Management Development (IMD) on Thursday, placed the city ahead of 68 other economies among the 70 surveyed.
Hong Kong was surpassed only by Singapore, but ranked ahead of Switzerland and Taiwan.
The IMD said Hong Kong’s rise to second place was built on three consecutive years of improvement and “reinforced the dominance of Asian economies at the top of the ranking”.
The city’s overall performance marked a rebound from 2023 when it was ranked No 7, and matched its No 2 position in 2019. In 2017, it was ranked No 1 among 63 economies.
The report said the city’s rise reflected sustained performance across the four competitiveness factors measured: government efficiency, infrastructure, economic performance and business efficiency.
Hong Kong was ranked first for its tax policies, underpinned by zero consumption and employer social security tax rates, as well as business legislation.
“Government efficiency remains its defining competitive strength, keeping second place for the second consecutive year,” the IMD said.
The index covers economic performance, government efficiency, business efficiency and infrastructure, each of which has five subcategories.
The report highlighted several challenges in 2026 based on information from the Hong Kong Trade Development Council.
These included navigating geopolitical tensions, shifting global trade and investment flows to capture emerging opportunities.
Hong Kong also needed to address its ageing population by boosting workforce vitality and productivity, the report said.
Mainland China climbed four places to 12th. It improved in three of the four main areas of assessment – government efficiency, business efficiency and infrastructure – while its ranking in economic performance fell from fifth to seventh.
Despite the decline in its economic performance ranking, the dynamism of the mainland’s economy remained the top factor in the country’s attractiveness, according to executives surveyed by the report, followed by policy stability and predictability, a skilled workforce, reliable infrastructure and cost competitiveness.
Hong Kong finance chief Paul Chan Mo-po said it was good news that the city’s overall core competitiveness had further consolidated and strengthened.
“Its development momentum is sound, and its advantages as a ‘safe harbour’ and a ‘port of growth opportunities’ are becoming more prominent, making it increasingly attractive to domestic and foreign capital, businesses and talent,” the financial secretary said.
The government said the index reaffirmed Hong Kong as one of the “most competitive economies” in the world.
It added that the city’s ranking reflected the government’s “ongoing efforts to promote free and open, stable, predictable and business-friendly economic policies, as well as the international community’s trust in Hong Kong’s legal and regulatory environment”.
“Hong Kong’s business efficiency is ranked third globally, reflecting the strong support for industry development rendered by our robust financial ecosystem, as well as the seamless alignment of the city’s business practices and environment with international best standards,” a spokesman said.
“Amid rapidly evolving geopolitical dynamics, Hong Kong, with its close connectivity to both the Chinese mainland and the world under the ‘one country, two systems’ principle, and its sound institutions, open markets and sustained investments in innovation, has become a ‘value hub’ that offers both security and growth opportunities.”