Shanghai loses out on rising labor costs

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Shanghai has lost its title as the most competitive region on the Chinese mainland in 2010 due to growing labor costs, and fell to third spot a report by the Chinese Academy of Social Sciences said Wednesday.

Jiangsu Province was first and Guangdong Province in the south of the country came in second, according to the report.

The calculation was based on key economic data collected between 2006 and 2010, and the results were expected to serve as a guide for the 12th Five-Year Plan from 2011-2015.

Jin Bei, an economist at the CASS, said coastal cities were less competitive compared with several years ago mainly because of rapidly growing labor costs.

"For cities like Shanghai, the development of service industry, like finance, is important. But they should also make use of their long-established advantages to explore advanced manufacturing," Jin said.

Shanghai's economy grew 8.2 percent from a year earlier in 2011, among the slowest of China's provinces and municipalities.

Regions in East China had their competitiveness evaluation enhanced by 0.51 point, while Central and West China caught up quickly.