The causes for China's downgrade - inefficiency in public institutions and a fragmented legal system - "can be improved over time," said Augusto Lopez-Claros, who is in Shanghai to attend the 5th Shanghai International Industry Fair.

"China will come out tops among the most prosperous countries in the years to come," said Lopez-Claros.

In the WEF survey of 102 nations and regions, China fell to 44th from 38th position on competitiveness of the economy. The survey was done among business leaders.

Technology readiness, micro-economic performance and quality of public institutions, especially government-owned, are the three components the WEF takes into account when deciding on an economy's competitiveness.

"The Chinese government got very high marks in micro-economy," said Lopez-Claros. "But the scores for China's institution quality are not high enough because of government bureaucracy. Besides, China has a lot catch-up to do to bridge a gap in technology, like the Internet usage in schools and level of company spending on technology improvement."

But he pointed out that China is committed to research and development and the country will soon generate new technologies, not absorb or copy from others.

"The share of the world economy contributed by China will rise in the next decade," Lopez-Claros said.

According to the survey, Taiwan and Singapore are Asia's best performing economies. Each moved up one place, with Taiwan rising into the fifth place due to its technology strengths and Singapore into sixth place on account of its sound economy and quality of public institutions.

According to the report, Finland is considered the world's most competitive economy followed by the United States, Sweden and Denmark.

Yesterday was the second day of the annual SIIF event, which is held at the New Shanghai International Expo Center in Pudong.

The six-day event, attracting more than 1,000 companies and institutions to display their latest products, wants to establish itself as the "Eastern Hanover Fair," an event that showcases the state-of-the-art technologies.

On the first day of the show, deals worth 3.67 billion yuan (US$442 million) covering high-tech products, assets and technology exchanges were sealed. Also, 46,000 people, attended the show on the first day.

The organizers did not reveal yesterday's trading value.