Shenzhen was selected as the most innovative city in China, according to a report released by the China Institute of City Competitiveness.

Hong Kong came in second, followed by Shanghai.

The institute released its 2008 report Wednesday, ranking Chinese cities in seven categories, including innovation, tourism, livability, investment, harmony and environment. It was the first time the institute compiled an innovation ranking.

Shenzhen's innovation score of 72.04 barely edged out Hong Kong's rating of 71.89, said Gui Qiangfang, director of the Hong Kong-based institute. Shenzhen holds the edge over Hong Kong in technological innovation and cultural and environmental aspects, Gui said.

In other categories, Beijing was named the most beautiful city and best tourism destination, followed by Hong Kong and Shenzhen. Hong Kong offers the best investment environment among the Chinese cities for its sound financial system and efficient governance. Shenzhen came in fourth place in the investment category after Shanghai and Beijing.

When it comes to livability, Hangzhou won first place, followed in order by Hong Kong, Shenzhen, Zhuhai and Dalian. These cities are safe, culturally advanced and offer comfortable living environment, according to the study.

The study also ranked cities in terms of environment in which Sanya of Hainan Province topped the list.

Editor: Yan