The narrative of Hong Kong declining while Shanghai and other financial centres in the Mainland rise is being born out on a new list of China’s most competitive cities compiled by the China Institute of City Competitiveness.  Hong Kong has dropped from sixth position to 12th this year, the first time the Special Administrative Region has fallen out of the top ten. The study ranked 358 cities for competitiveness and growth potential.

Despite the drop in overall ranking, Hong Kong remains unsurpassed in other ways. Hong Kong is still China’s top city for per capita wealth, food safety, cleanliness, and is named as China’s most international city. In addition to this, Hong Kong is recognized as the center of the Asia-Pacific region for finance, trade, shipping, and tourism.

However, all of these competitive advantages is not enough to rank Hong Kong as one of China’s most competitive cities. Director of the research group behind the study Gui Qiangfang noted that other mainland cities have surpassed Hong Kong in gross national product (GDP) while its own economy has matured and stagnated.

Hong Kong’s GDP has been overtaken by Shanghai, and Beijing, and will soon be overtaken by Shenzhen and Guangzhou as well.Hong Kong’s GDP has been overtaken by Shanghai, and Beijing, and will soon be overtaken by Shenzhen and Guangzhou as well.

Gui explained Hong Kong’s poor showing among Chinese cities is due to Hong Kong’s reliance on the core industries of finance, shipping, tourism and professional services. Gui also said societal friction, the ineffectual nature of local government, an imbalance of local supply and demand, and no capital for new industries also compound Hong Kong’s ability to be competitive. Gui added that many Hong Kong industries enjoy a monopoly in their market, while Hong Kong residents have shown themselves to not be willing to take risks as entrepreneurs.

But before you associate other Hong Kong news with this report, Gui emphasized that the findings have nothing to do at all with the events of Occupy Central.

Meanwhile, Hong Kong’s neighbor to the north, Shenzhen, did remarkably well on the ranking of competitive cities, coming in first for innovation and livability.

According to the report, Shenzhen’s livability is due to its planning and eco-friendly living environment while its innovation is due to a deep commitment by the city to make it a priority.