China ranks 46th out of 104 economies evaluated in the Geneva-based World Economic Forum's latest World Competitiveness Report, dropping two places from last year. The report was released on Wednesday.

China excels in terms of its macroeconomic environment, which reflects the strength of economic activity and the absence of major imbalances, according to Augusto Lopez-Claros, chief economist and director of the World Economic Forum's Global Competitiveness Program.

The country ranks first in the national savings rate, 14th in recession expectations and 17th in the inflation rate.

However, it lags on such indicators as soundness of the banking system, irregular payments in public utilities and protection of intellectual property rights.

In technology, although the information and communication industry has been developing very rapidly, the penetration rates of the Internet, cellular phones and telephone lines are still relatively low, largely owing to the country's huge population, Lopez-Claros said.

Lopez-Claros predicts that China's position will be stable during the next few years. He expects economic growth to remain strong and to continue providing a range of benefits.

"What is very impressive about this growth performance is that it has been accompanied by a large opening up to the rest of the world, and also has been characterized by a dramatic reduction in poverty -- literally hundreds of millions of people have been lifted out of poverty as a result of this high growth rate," he said in a video statement.

The report says that Finland remains the most competitive economy in the world, topping the rankings for the second consecutive year. The United States placed second and Sweden third.

The rankings are drawn from an opinion survey, which this year polled over 8,700 business executives in 104 economies worldwide. The survey is designed to capture a broad range of factors affecting an economy's business environment, which are key in determining sustained economic growth.

The final rankings were based on dozens of smaller indicators in three main categories: the macroeconomic environment, the quality of public institutions that underpin the development process, and the level of technological readiness and innovation.

(China Daily October 14, 2004)