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China is elevating its digital competitiveness on the world’s stage, according to the latest rankings from a Swiss academic institute, while those behind the findings caution that trade fragmentation is weighing on economies’ digital prowess globally. The world’s second-largest economy has reached an all-time high of 12th place among 69 economies in terms of overall performance, improving by two places from 2024, according to this year’s edition of the World Digital Competitiveness Ranking, published by the International Institute for Management Development (IMD). The rise was driven by China’s top-10 performance in several subfactors under the “knowledge” and “technology” categories – two of the three key pillars used to measure a country’s digital competitiveness. The third category is “future readiness”. China ranked third in “scientific concentration” – a subfactor under the “knowledge” category – topping the world in research and development productivity by publication, AI-related patent output, and the use of robots in education and research, according to the research findings published on Tuesday. This is the ninth year the institute has released its rankings. China also ranked seventh globally in “capital”, which is under the “technology” category, supported by its second-place standing in artificial intelligence private investment. Hong Kong, which was assessed separately from the mainland, rose three places to fourth this year, driven by strong performances in talent and education. Switzerland, the United States and Singapore were deemed the most digitally savvy economies due to their infrastructure, talent and innovation ecosystems, but IMD cautioned that this could be set to change, “as trade tensions are increasingly encroaching on data flows, technical standards and investment priorities”. And the negative impact of geopolitical fragmentation on digital competitiveness comes particularly through trade and investment barriers, according to the institute. “Trade conflicts have evolved to such an extent that they now affect intellectual property, data flows and technical standards at the national level,” IMD said in a press release. Generally, countries least affected by such fragmentation are advancing rapidly in terms of their digital competitiveness this year, while those highly exposed are falling behind in the rankings, according to the findings. For example, Qatar – shielded from the trade tensions seen this year – climbed six places from last year, while Australia, which has been more exposed to trade disruptions, fell eight spots in the ranking, the IMD said. Despite its ranking rise, mainland China still faces challenges in its digital development amid geopolitical headwinds. Among the executives surveyed, those from economies deeply integrated into cross-border innovation networks showed the greatest concern over how international trade conflicts have hurt their organisations’ innovation and R&D strategies. In China, 47.95 per cent of respondents viewed conflict over trade as a “significant constraint”, ranking fifth globally. China has ramped up “aggressive” domestic R&D investment to offset reduced access to US technologies amid the tech wrestling between the two countries, the report said. However, it noted how innovation output – measured by patents, collaborations and commercialised breakthroughs – has not always risen proportionally, citing 2024 research by Chinese scholars. The country still ranks in the middle to lower range globally in categories such as “AI publications” and talent with “international experience”, according to the report.
