New Zealand and Australia both moved up the IMD 2016 competitiveness ranking but the surprise in the release yesterday was the United States surrendering its lead as the world's most competitive economy.
New Zealand moved up one place to be ranked 16th this year and Australia moved up one to 17th.
The US fell two places to third behind China-Hong Kong in top place and Switzerland second.
The IMD World Competitiveness Center said the sheer power of the US economy was no longer sufficient to keep it at the top of the world ranking.
Prof Aruro Bris, of the centre, said in a statement a consistent commitment to a favourable business environment was central to China-Hong Kong's rise and Switzerland's small size and emphasis on quality had allowed it to react quickly to keep its economy on top.
"The US still boasts the best economic performance in the world but there are many other factors we take into account when assessing competitiveness.''
The common pattern among all of the countries in the top 20 was their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions, he said.
A leading banking and financial centre, China-Hong Kong encouraged innovation through low and simple taxation and imposed no restrictions on capital flows into or out of the territory.
Hong Kong also offered a gateway for foreign investment in mainland China, the world's newest economic superpower, also enabling businesses there to access global capital markets, Prof Bris said.
China-Hong Kong and Singapore aside, the research suggested Asia's competitiveness had declined markedly overall since the publication of last year's ranking.
Taiwan, Malaysia, Korea Republic and Indonesia all suffered significant falls from their 2015 positions and mainland China fell marginally but retained its place in the top 25.
Countries in Eastern Europe had made the most impressive strides and chief among them were Latvia, the Slovak Republic and Slovenia.
Each ranking was based on analysis of more than 340 criteria, derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure.
The responses from 5400 business executives who were asked to assess the situation in their own country were also taken into consideration.
"One important fact the ranking makes clear year after year is current economic growth is by no means a guarantee of future competitiveness,'' Prof Bris said.
Top 20
1. China-Hong Kong
2. Switzerland
3. United States
4. Singapore
5. Sweden
6. Denmark
7. Ireland
8. Netherlands
9. Norway
10. Canada
11. Luxembourg
12. Germany
13. Qatar
14. Taiwan
15. UAE
16. New Zealand
17. Australia
18. United Kingdom
19. Malaysia
20. Finland
