China competitiveness report raises lots of doubts

What's that again? China’s central Henan province, whose per capita GDP is way below the national average, is more competitive than Hong Kong?

Well, that's the conclusion of a report by the China Institute of City Competitiveness, which came out on Tuesday.

And it's not only Henan. Hong Kong is also eating the dust of 10 other places in China, according to the institute's report.

The report, which ranks China’s provincial divisions (including Hong Kong, Macau and Taiwan) according to their competitiveness, puts Hong Kong at No. 12.

Those occupying the top five spots are Guangdong, Jiangsu, Shandong, Zhejiang and Shanghai (in that order). Also ahead of Hong Kong are Taiwan, Beijing, Henan, Fujian, Liaoning and Tianjin.

Beijing mouthpieces in the city like Wen Wei Po have rushed to conclude that the resounding veto of the government’s 2017 election package last week and the political rift stirred up by pan-democrats were the main reasons for the city’s worrying decline in competitiveness.

Now, if this ranking is presenting a genuine account of Hong Kong’s diminishing might amid the shifting economic landscape, then how do we explain another report by the prestigious International Institute for Management Development in which Hong Kong has moved ahead of Singapore and Switzerland to be named the world’s second most competitive economy this year, next only to the United States among 61 economies?

The Lausanne-based business school has rated China in the 22nd position.

Separately, on the 2014-15 global competitiveness chart of 144 economies compiled by the World Economic Forum, Hong Kong sits in the 7th place while China ranks No. 28.

Our readers can surely judge for themselves which ranking is more reliable.

A closer look at the China Institute of City Competitiveness will help us understand better how the rankings are prepared as well as its methodology.

The institute was founded in Hong Kong in 1998 “to carry out assessment and research of city competitiveness and assist city governments in solving problems of economic growth and regional competition”, according to its website.

Just like the online portals of many mainland government agencies, the institute's website does provide an English version, which is nothing more than clumsy word-for-word translation of the Chinese content with spelling errors and links either broken or unavailable.

The same level of language is also seen in the English title of Tuesday’s news conference: “China’s urban classification advantages ranking and the basic evaluation of competitiveness of Hong Kong press conference under the new normal”.

Only Putonghua was used as all members of the expert panel are from the mainland and the conference was mainly attended by pro-Beijing media.

As the institute notes, it applies a self-developed “GN system” to gauge competitiveness with indexes measuring economic, social, environmental and cultural well-being of each city, and a wide spectrum of factors — from infrastructure and financial development to rather intangible concepts like the extent of picturesqueness of a city’s natural environment and the marketability of industrial and tertiary products — are also examined.

Most of the indexes are actually taken from the Chinese National Statistics Bureau’s classification of industrial activities and definitions used in national census.

Since China and Hong Kong adopt mostly different standards, concepts and classifications in data dissemination and analysis, one wonders how the institute has managed to compare figures of two different statistical regimes — fiscal, capital flow, trade and median income data, in particular — to determine Hong Kong’s position. Nor did it explain what GN stands for.

The institute even failed to provide a formal press release on the latest rankings. A link to details about data collection and corresponding weightings under the “GN system” turns to an “Error 404 not found” webpage.

The reporter failed to contact the institute for comment.

China Institute of City Competitiveness has indeed raised lots of doubts and suspicion for years.

It claims that numerous surveys in the form of questionnaires are conducted among chambers of commerce to collect data and the business sector’s views on competitiveness and economic outlook.

One of those surveyed, according to the institute, was Hong Kong International China Commerce Community Association Co., Ltd. (香港國際華商聯合會).

Through a search at the Companies Registry, Cable TV found that the association’s largest shareholder is a mainlander named Gui Qiangfang (桂強芳), president of the China Institute of City Competitiveness, and, the association’s registered office shares the same address with the institute.

Gui later said they also contacted members of the Chinese Manufacturers Association of Hong Kong (CMA), but a CMA executive told Cable TV that they had no ties with Gui.

Gui’s personal credentials and qualifications are also amusing.

According to his curriculum vitae, he has a Ph.D. in management from the University of California, but in truth he obtained the degree from the California Southern University which only offers distance education and training programs, as Gui himself later admitted to the broadcaster.



He also holds an MBA diploma from the International East-West University based in Hawaii, which is particularly notorious in China as a diploma mill. It is widely known that its alumni include Communist Party cadres who want to buy an academic degree to polish their resume for promotion.

One of Gui’s many “classmates” from that university was the disgraced Shenzhen mayor Xu Zongheng (許宗衡), who has been sentenced to life imprisonment for fraud and embezzlement.

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CG