SINGAPORE has lost its position as the world's second most competitive economy to Hong Kong, falling to third place in the latest competitiveness rankings.

RELATED LINKS  THE WORLD COMPETITIVENESS SCOREBOARD 2009

The United States remains tops, according to a world competitiveness report of 57 countries conducted by Swiss-based business school IMD.

The economies are ranked according to how the nations and businesses are 'managing the totality of their competencies to achieve greater prosperity', said the IMD, which released the rankings on Wednesday.

It added that competitiveness is not just about growth or economic performance, but should take into account the 'soft factors' of competitiveness such as the environment, quality of life, technology and knowledge.

IMD said this is why economies such as those in the US, Japan, the United Kingdom, Nordic economies and small, open ones like Singapore, Hong Kong and Switzerland are able to maintain their rankings in the top league despite short-term disruptions.

In a free-fall economy, competitiveness is also about how countries can resist adversity and show resilience to weather the storm, said IMD.

Among the Asean countries, Indonesia made a quantum leap, moving up nine places to 42nd, Malaysia went up a notch from 19th to 18th, and Thailand from 27th to 26th.

In East Asia, China fell three places to 20th. It did not perform very well in areas including international investment, business legislation, management practices, health and environment.

Taiwan also fell 10 place to 23rd place, from 13th a year ago, while South Korea moved up from 31st to 27th.

IMD said the report took into account that the rankings were based on a majority of statistics from 2008, especially the growth period of early last year, and countries entered the economic crisis at different times.

IMD, which provides the well-known reference to analysing and ranking the competitiveness of nations every year, has been studying it for more than 20 years.