In 2023, China’s economic expansion surpassed the anticipated 5%, even though consumer confidence continued to lag. As the country shifted its growth strategies towards high-tech industries following the pandemic, promoting technological innovation and industries related to sustainability became key policy focuses. In 2023, China ranked 13th in the Global Innovation Index. Clean energy consumption in China also increased from 13% in 2010 to 25.9% in 2022.

The eleventh edition of the Annual Greater China Competitiveness Report offers the latest competitiveness rankings for the 34 economies and 5 regions of China. It also delves into the impact of protectionism measures on inward FDI in mainland China.

The study finds that Guangdong, Jiangsu and Zhejiang have been ranked the three most competitive economies since 2019. Their strengths in Regional Economic Vibrancy, Government Policies and Fiscal Sustainability, and Physical Infrastructure underlie their top positions. Moreover, Eastern China has outperformed other regions across all competitiveness dimensions since 2016.

The book also features a case study examining Hunan’s move upward in its overall competitiveness ranking by more than 10 positions between 2011 and 2020, driven by increased expenditures in transportation, education, and healthcare infrastructure. However, this surge in expenditure has strained its fiscal capacity.

The policy chapter analyses the impact of rising protectionism on China’s inward FDI, which has experienced a 60% decline since 2020. Reshoring measures constitute the majority of these protectionist actions, disproportionately affecting strategic sectors such as semiconductors and medicals. Eastern coastal provinces were the most affected. The increasing number of protectionist measures does not originate from a single country targeting China exclusively; instead, it reflects a global rise in protectionist sentiment, with far-reaching indirect effects on numerous countries.

By ZHANG, Xuyao, GUO, Meiling, LU, Weilin