Beijing slid to fourth place among the mainland's most competitive cities this year, while southern powerhouses Shenzhen and Guangzhou shot up, according to the annual ranking published yesterday by the Chinese Academy of Social Sciences.

The findings, which placed Shanghai in the top spot, were unveiled by Ni Pengfei, who led 100 experts in preparing the in-depth urban development report for the yearly "City Competitiveness Blue Book."

Ni, a senior researcher with the top government think-tank, also said the country's emerging industrial clusters, a key source of city competitiveness, are a fount of solutions for economic and social woes.

Since 2003, the academy has assessed cities’ competitiveness, gauging gross domestic product growth, infrastructure building and employment among its main indicators.

The ranking generates widespread attention and is a reference for city planners and foreign investors.

This year, Ni's team factored in power and water consumption as well as environmental pollution for the first time to compile a ranking of "integrated competitiveness" among 200 of the mainland's major cities.

The new factors pushed Shenzhen and Guangzhou ahead of Beijing, to follow Shanghai at the head of the pack, though the capital still led in terms of workforce, economic structure and science and technology.

The report focused on the competitiveness of 50 leading cities, analyzing each one of these in detail and offering remedies for any shortcomings identified.

For example, the in-depth report said Beijing is not only lacking in natural resources and environment, but is as far down as number 43 when it comes to protecting property rights, market and private economic development and administrative approval.

Ni said the next five years will be crucial for the capital's development. "If it can proceed in a coordinated way in infrastructure and services construction, and grasp the opportunity of hosting the Olympic Games, Beijing can surely expect its overall competitiveness to climb."

Shanghai scored the highest marks in capital, infrastructure, location, culture and governance.

Except for Beijing, Changchun and Jinan, the country's 20 most competitive cities are on the east coast, with those in west and central China ranking very low on the list.

Another important finding was the emergence of industrial clusters, which Ni claimed are becoming engines powering the economy.

Geographically speaking, industrial clusters have formed around booming cities and towns in northeast China, Beijing-Tianjin-Hebei, Shandong Peninsula, Jiangsu-Shanghai-Zhejiang and the Pearl River Delta in the south, he said.

Cities such as Shenzhen and Guangzhou, where industrial clusters have developed, also led in terms of per capita income, Ni said.

With extensive case studies, the study shows how industrial clusters absorb labor, speed up urbanization, narrow the income gap between urban and rural areas, and help save energy.

"Therefore, with this report, we'd like to appeal to the central authorities to prioritize development of industrial clusters as a national strategy," said Ni.

Industrial clusters may also fill the vacuum left behind by the elimination of preferential policies for development zones following China's accession to the WTO. 

(China Daily March 18, 2005)