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One of the major factors behind China's competitiveness rising is its strong economic performance, which is ranked only second to the United States among a total of 55 economies, the Lausanne-based business school said in the 2007 edition of its World Competitiveness Yearbook.

China's government efficiency and infrastructure score also shows dramatic increase in IMD's annual competitiveness report.

IMD experts believe that China's overall competitiveness ranking could keeping on going up in future, but China needs to tackle a series domestic problems, including environment protection, imbalance of development, etc., if it wants to enter the top 10 list of most competitive economies.

The IMD business school has published the World Competitiveness Yearbook annually since 1989. The yearbook analyses and ranks the ability of economies to create and maintain an environment that sustains the competitiveness of enterprises and contributes to upgrading of living standards.

This year's report lists the U.S., Singapore, Hong Kong, Luxembourg, Denmark, Switzerland, Iceland, Netherlands, Sweden and Canada as the world's top 10 most competitive economies, out of a total of 55 economies.

The results of the 2007 edition of IMD's World Competitiveness Yearbook highlight a big shake-up in economic and business power, IMD said in a statement.

Emerging nations such as China, India and Russia are quickly catching up in competitiveness. They now contest the long-standing competitive supremacy of industrialized nations, it said.

"This could lead to an increase in protectionist measures in Europe and the U.S.," said Professor Stephane Garelli, director of IMD's World Competitiveness Center.

In 2007 and beyond, economic relations will be more tense than ever as emerging markets turn into emerging powers and challenge the established order for competitiveness, Garelli said.