* China moves up two places to 27th (Adds quotes and details)

BEIJING, Sept 9 (Reuters) - Switzerland remains the world'smost competitive economy, while the United States has fallen fromsecond to fourth after losing the top spot last year, accordingto the World Economic Forum's annual rankings issued on Thursday.

Sweden, in second spot, and Singapore in third leapfroggedthe United States in the WEF's Global Competitiveness Report2010/2011.

Last year the Asian city-state ranked third and Swedenfourth. There were no newcomers in the WEF's top 10, althoughGermany climbed to fifth from seventh.

The WEF said America slipped in the ranking due to a build-upin U.S. macroeconomic imbalances, a weakening of the country'spublic and private institutions and concerns about the state ofits financial markets.

"There are weaknesses in some areas in particular, which wehave discussed for some time before, and they deepened somewhatsince last year," Jennifer Blanke, the lead economist of theWEF's Centre for Global Competitiveness and Performance, told anews conference to release the report.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^http://www3.weforum.org/docs/WEF_GCR_Highlights_2010-11.pdf?mc_id=^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The report said a lack of macroeconomic stability continuesto be America's greatest area of weakness, with repeated fiscaldeficits leading to burgeoning public indebtedness.

It also said that U.S. business leaders show less trust inpoliticians and the government's ability to maintain anarm's-length relationship with the private sector.

The WEF bases its assessment on a dozen drivers ofcompetitiveness, including institutions, infrastructure, healthand education, market size and the macroeconomic environment.

The report also factors in a survey among business leaders,assessing the government's efficiency and transparency.

Switzerland retained first place thanks to its high capacityfor innovation and sophisticated business culture.

Nordic countries continued to do well in the WEF's leaguetable, with Finland and Denmark joining Sweden in the top 10.

China moved up two places to 27th and was the mostcompetitive of the major emerging economies.

"China continues to show great strength, not in terms of thesize of the economy but in terms of the quality of the economy,"said Robert Greenhill, managing director and chief businessofficer of the WEF.

He attributed China's climb up the rankings to its largemarket size, strong macro-economic management and improvedfinancial markets.

"China is moving up the value chain of global competitivenessand in addition it has made great progress in businesssophistication and innovation," he added.

The Geneva-based group released the report ahead of a meetingnext week in the port city of Tianjin near Beijing. (Reporting by Aileen Wang and Alan Wheatley; Editing by KenWills)