The World Economic Forum has ranked Finland and the United States at the top of a list of the world's most competitive economies. The annual survey says Italy and China are struggling to keep up.

The annual survey lists, in order, the 104 most productive economies in the world, according to factors including the stability of a country's public institutions and the level of its technology.

The World Economic Forum says Finland tops the list for the third time in four years because of its low level of corruption, well-managed economy and culture of innovation. The United States ranks second, followed by Sweden, Taiwan, Denmark and Norway.

On the other hand, China ranks 46th despite its growing economy. Chief economist at the World Economic Forum, Augusto Lopez-Claros, says China faces technology challenges.

"It is a country that has made a lot of progress on the technology side, but it is still, I do not want to say technologically backward, but there is a significant gap in technological sophistication and the ability of business enterprises to adopt new technologies with respect to the more developed countries of the industrial world," he notes.

According to economist Michael Porter, Japan was among the most impressive countries, where a growing business sector led it into the top 10 for the first time. He says one of the biggest losers this year is Italy, which has dropped more than 20 places since 2001 and ranks lowest among European Union countries, largely because of corruption.

"Italy, in contrast, is really in an alarming decline mode right now as measured by our sense of the business environment and the perceptions of that in the business community," Mr. Porter adds. "Italy has dropped a large number of ranks and really a disturbing pattern there."

Most Latin American economies also declined with the exception of Chile, which the World Economic Forum calls the most competitive economy in Latin America.