Shanghai has beaten Beijing and Guangdong again to remain the most competitive provincial or municipal economy.

Government think tank Chinese Academy of Social Sciences (CASS) annual competitiveness report, released yesterday, shows western provinces and regions are still far behind their eastern counterparts, but the central provinces are catching up.

Northwest China's Shaanxi province's rank fell sharply, while Anhui province in the east made impressive strides.

The latest CASS study includes sustainable development and cultural competitiveness as ranking criteria for the first time, said Li Jianping, the report's editor-in-chief and president of the Fujian Normal University.

Official figures were used in the calculations and the 207 criteria were divided into nine categories.

"There is a geographical pattern of competitiveness - the eastern coast is still the strongest, the western region is the weakest and the central provinces are in the middle. The competitiveness of the western provinces is not even half that of the eastern ones," he said.

"It (the pattern) has been that way for a long time and those behind cannot hope for a change in the short term."

A major change could only be triggered by carbon trading, said CASS senior economist Chen Dongsheng, though he was not part of the report.

"Western provinces like Qinghai can hardly experience an economic miracle because they shoulder a far greater responsibility, of environmental protection and ecological restoration, as part of the State Council's recent plan to set different development goals for different places," he said.

"For example, development is forbidden or restricted on more than 80 percent of Qinghai's land, which is the origin of the Yellow River, the Yangtze River and the Lancang River. But the province and several others will be compensated almost for sure through carbon trading when the market gains momentum a few years from now."

Industrial development, though, remains the key to economic power, and eight provinces shot up in the rankings. Anhui improved the most, climbing from the lower end of the list to the middle.

The central government policy of reviving industrial bases in Northeast China has had different effects on the three provinces there. Liaoning is now in the front part of the list and Heilongjiang is in the middle. Jilin, however, is still among the bottom ones.