Hong Kong, Shenzhen and Shanghai retain their spots as the three most competitive cities, according to the latest annual report on urban competitiveness in the country.

Qingdao, a coastal city in Shandong province, makes it to the top-10 list for the first time after it hosted the sailing events of the Beijing Olympic Games last summer.

The seventh edition of the Blue Book on Urban Competitiveness was launched yesterday by the Chinese Academy of Social Sciences (CASS).

"Urbanization will become the major force behind China's economic growth in the next 30 years," Yao Jingyuan, chief economist with the National Bureau of Statistics, said at the book launch on Tuesday.

He added that the annual report provides useful information for policy makers on the country's urbanization drive.

Led by Ni Pengfei, a researcher at the CASS Institute of Finance and Trade Economics, the team surveyed 294 cities on the Chinese mainland and Taiwan, as well as Hong Kong and Macao.

They compared the cities' competitiveness mainly based on the per unit area of gross domestic product (GDP), a theory that has been adopted since 2005.

"The huge gap between the coastal cities and the inland area is widening," Ni said.

The top 10 cities are from the Pearl River Delta, the Yangtze River Delta, the Bohai Sea Rim area and Taiwan, the most robust city clusters, the report said.

The report also notes that Zhejiang province - which last year had its capital Hangzhou on the list - failed to produce a top-10 city this year.

But in the global context, the competitiveness of Chinese cities is lagging. Hong Kong, Shenzhen and Shanghai are listed only 26th, 64th and 41st on the Global Urban Competitiveness Report (2007-08) by the CASS.

But since all the data were collected before the global financial crisis, that report may not reflect the impact of the worldwide economic slowdown on China's urban competitiveness, Ni said.

The recent decision by the State Council to build Shanghai into one of the world's leading financial and shipping centers by 2020 has made competition between the largest business hub on the mainland and Hong Kong seem inevitable.

"In terms of the overall economic output, Shanghai has already exceeded Hong Kong," Ni said. "But it has a long way to go to catch up with Hong Kong in becoming a global financial center."

The cities should play complementary roles, with Shanghai focusing more on the mainland and Hong Kong on overseas financial market, he suggested.