Policymakers have to deepen reform and spend more funds on R&D to make the country a mature competitor in the global market

China has moved up the global competitiveness ranking, but since it is ranked only 28th, it needs to accelerate its systemic reforms to become a real competitive force in the global arena.

China's ranking edged up one place in the 2014 Global Competitiveness Index of the World Economic Forum, which "assesses the ability of countries to provide high levels of prosperity to their citizens" by measuring "how productively a country uses available resources".

The good news is that China leads other major emerging economies, or BRICS member states, by a wide margin. But there is no room for complacency because it lags far behind developed countries in some key sub-indexes, such as technology and innovation ability.

Although China has improved in some sub-indexes, its rankings are still very low and out of line considering that it is the world's second-largest economy. As the WEF report says, China is becoming more innovative (32nd), but it is not yet an innovation powerhouse. It also lags far behind in a number of other sub-indexes such as higher education and training (65th), functioning of the market (56th), corruption (66th), transparency (43rd) and technological readiness (83rd).

China's relatively high overall ranking can be attributed to its good standing in market size (2nd) and macroeconomic environment. Its performance in transport and connectivity (21st), too, has helped improve its ranking. If not for the high scores in these sub-indexes, China's place could have been even lower.

Indeed, China has a stable macroeconomic environment. Its consumer price index is less than 3 percent, below its target of 3.5 percent, and its public debt-GDP ratio is 22.4 percent, which is among the lowest in the world. Thanks to the massive investments, it boasts of sound transport infrastructure. And because of the large scale of its economy, it is expected to maintain its high ranking in the sub-index of market size.