A Race with Obstacles

Japan is ascendant again, but China is wobbly. That's the surprising assessment of the World Economic Forum's (WEF) Global Competitiveness Report 2004-2005, which ranks 104 economies on whether they have what it takes to keep growing. Japan, which placed 21st in 2001, has muscled its way back into the top 10 on the strength of renewed confidence and improved public-sector transparency. But China has fallen to 46th place, behind Latvia and Botswana. "The message to China is you've grown really well," says WEF senior economist Jennifer Blanke, "but if you want to continue to grow, you have to improve your institutions, cut down on corruption, improve property rights and ensure your work force is extremely educated." Even in an epochal boom, China hasn't fully secured its status as an economic superpower.