BEIJING, Mar. 18 -- Beijing slid down to fourth place among the mainland's most competitive cities this year, while southern powerhouses Shenzhen and Guangzhou shot up.

    An annual ranking of competitiveness among mainland cities was published yesterday by the Chinese Academy of Social Sciences.

    The capital still led in terms of workforce, economic structure, and science and technology.

    The findings were unveiled by Ni Pengfei, who led 100 experts to prepare an in-depth urban development report for the annual "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 fountain of solutions for China's economic and social woes.

    Since 2003, the institution has assessed the competitiveness of Chinese cities, gauging gross domestic product growth, infrastructure building and employment among the 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 China's major cities.

    The new factors pushed Shenzhen and Guangzhou ahead of Beijing, to follow Shanghai at the head of the pack.

    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 the Chinese capital is not only lacking in natural resources and environment, but Beijing 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 Beijing's development. "If it can proceed in a co-ordinated way in (infrastructure) and (services) construction, and grasp the opportunity of hosting the (2008) Olympic Games, Beijing can surely expect its overall competitiveness to climb."

    The country's economic hub of Shanghai again dominated the comprehensive competitiveness list, scoring the highest marks in capital, infrastructure, location, culture and governance.

    Except for Beijing, Changchun and Jinan, the country's 20 most competitive cities are invariably on the east coast.

    Cities in West and Central China all rank very low on the list.

    Industrial clusters

    Another important finding of the "Blue Book" is the emergence of industrial clusters in China, which Ni claimed are becoming engines powering the country's 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 labour, speed up urbanization, narrow the income gap between urban and rural areas, and help economize on 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 World Trade Organization.

(Source: China Daily)