Hangzhou was named the best place to do business in China for a fifth consecutive year in a Forbes survey released on Tuesday.

Shanghai came in at No 2, with Beijing remaining in sixth position for the second straight year. Wuxi was third, Nanjing fourth and Ningbo fifth.

Forbes China short-listed 194 mainland cities from a pool of 652 candidates with an annual GDP above 19 billion yuan in 2006.

Of the top 42 cities, 10 are from Jiangsu province, nine are from Zhejiang and seven are from Guangdong. Cities in the Yangtze River Delta rated well, despite the gloomy global economic outlook, the survey said.

"In Zhejiang province alone, over 5,000 SMEs emerged this year. Jiangsu province's Changzhou, with its environmental protection industry and great market potential, has outdone other cities to move into ninth place," Chen Lan, Forbes China editor, said yesterday.

The Yangtze River Delta region was represented by Shanghai and another 23 cities from Zhejiang, Jiangsu and Anhui.

Chen said the Forbes list was based on each city's climate for business start-ups and private capital, which is why Hangzhou beat Shanghai for the top placing.

"In Hangzhou, more than 92 percent of the city's GDP is created by private companies, but Shanghai is the traditional business center for foreign investment," Chen said.

Although Beijing hosted the Olympics last month, Chen said the business and investment benefits are yet to come.

"We might see Beijing climb higher on the list in two to three years," she said.

The survey looks at the quality of the labor force, business costs, market size and capitalization to find the top business cities in the country.