Switzerland has become the most competitive economy in the world, while the United States falls one place to second position, with weakening in its financial markets and macroeconomic stability, the World Economic Forum (WEF) said on Tuesday.

Other economies in the top 10 are Singapore, Sweden, Denmark, Finland, Germany, Japan, Canada and the Netherlands, said the Global Competitiveness Report 2009-2010, which ranked a total of 133 economies worldwide.

The Chinese mainland continues to lead the way among so-called BRIC (Brazil, Russia, India and China) emerging economies, improving by one place to 29th this year, solidifying its position among the top 30, the WEF said.

Brazil and India have also improved to 56th and 49th, respectively, while Russia has fallen by 12 places to 63rd, Geneva-based body said.

A number of escalating weaknesses have taken their toll on the U.S. competitiveness ranking and brought it down from the top position, according to the report.

The country's greatest overall weakness continues to be related to its macroeconomic stability, where it ranks 93rd, down from 66th last year.

The United States has built up large macroeconomic imbalances over recent years. Repeated fiscal deficits have led to burgeoning levels of public indebtedness, which are presently being exacerbated by significant stimulus spending, the report said.

More generally, given that the financial crisis originated in large part in the United States, it is hardly surprising that there has been a weakening of the assessment of its financial market sophistication, it added.

The rise of the Chinese mainland in the competitiveness ranking is mainly due to its enormous market and high growth rates in recent years, according to the report.

The Asian country's business environment and capacity to innovate are also improving quickly, the report said, adding that the country also enjoys an enviable fiscal situation, which allows the government to stimulate internal demand, invest in infrastructure, and pursue economic reforms.

But as China moves up the development ladder, its competitive edge can no longer be based on the use of cheap factors of production alone and increasingly must be based on efficiency improvements, the report said.

The WEF has been issuing its annual Global Competitiveness Report since 1979. The rankings are calculated from both publicly available data and a comprehensive survey of business leaders worldwide.

Source:Xinhua