China joined the world’s top 20 most innovative economies for the first time while the United States fell out of the top five, according to the Global Innovation Index 2018. Switzerland is in the No 1 spot, followed by the Netherlands, Sweden, Britain and Singapore. The U.S. fell from fourth place in 2017 to sixth this year, while China jumped from 22nd to 17th in the rankings. This year, also among the top 10 innovative economies are the Netherlands, Sweden, Britain, Singapore, Finland, Denmark, Germany and Ireland. In this year’s survey, China ranked second in the number of science & technology clusters (16) after the U.S. (26), followed by Germany (eight), Britain (four) and Canada (four). Again, Tokyo-Yokohama of Japan tops the overall innovation cluster ranking, followed by Shenzhen-Hong Kong.

Francis Gurry, Director General of the UN World Intellectual Property Organization (WIPO), said China’s ranking represented a breakthrough for its economy, which was rapidly transforming and prioritizing research and ingenuity. “China’s rapid rise reflects a strategic direction set from the top leadership to develop world-class capacity in innovation and to move the structural basis of the economy to more knowledge-intensive industries that rely on innovation to maintain competitive advantage,” Gurry said. Now in its 11th edition, the index ranks 126 economies based on 80 indicators ranging from the creation of mobile applications to education spending, scientific and technical publications, and intellectual property filing rates. The index is sponsored by WIPO, Cornell University’s SC Johnson College of Business in New York, and INSEAD, the graduate school of business with campuses in France, Singapore and Abu Dhabi.

The report said that “China’s innovation prowess becomes evident in various areas”, with some of its greatest improvements coming in global research and development companies, high-technology imports, the quality of its publications, and enrollment in graduate education. “In absolute values, and in areas such as research and development expenditures and the number of researchers, patents and publications, China is now first or second in the world, with volumes that overshadow most high-income economies,” it read.

The report stated that China’s rapid rise in the rankings over the last few years had been spectacular and that it showed the way for other middle-income economies, the South China Morning Post reports. China’s capability to innovate won’t be affected by the trade war with the United States, though such a war would pose a challenge to the international flow of knowledge, experts said.