Shanghai has pipped Hong Kong in English-language proficiency again, after logging a big improvement over the past five years, according to a new report.
In another standout result from the EF English Proficiency Index (EPI) for 2016, Singapore became the first Asian country to crack the highest proficiency band for English, placing 6th overall in the index. English is the first language in the city-state, which operates a bilingual language policy in state schools.
The Netherlands ranked first in the index, while Scandinavian countries Denmark, Sweden, Norway and Finland rounded out the top 5.
The EPI, compiled by education company EF Education First, was based on the results of 950,000 adults who took an online English test administered by EF. A total of 72 countries and territories were ranked in this year's edition of the index, which was revealed exclusively to CNBC.
While China was ranked 39th out of 72 countries, compared to Hong Kong's 30th place in the worldwide rankings, the Chinese financial capital Shanghai logged better test scores than Hong Kong, a special administrative region of China and regional financial hub.
Shanghai recorded an EPI score of 55.54, compared to Hong Kong's score of 54.29 in 2016. However, China's capital, Beijing, came in slightly lower than Hong Kong, with a score of 53.49.
In terms of improvement in EPI scores, Shanghai experienced a 5-year score change of 4.35, compared to Hong Kong's 0.64 improvement. Shanghai's scale of improvement was similar to Singapore's, with the latter clocking a 5-year score improvement of 4.87.
Shanghai has previously bested Hong Kong in English proficiency only once before, in 2014.
Minh Tran, senior director of research and academic partnerships at EF, said Shanghai's improvement was due to the growing importance of English in China in response to an increasingly internationalized business and employment world.
"Chinese companies, such as Alibaba and Huawei, that are looking to operate abroad or attract foreign capital are expecting higher English proficiency levels from their applicants," Tran explained.
He attributed Hong Kong's stagnation on English proficiency to the elevated status of Cantonese in the territory since it was handed over by Britain to China in 1997. Hong Kong adopts a trilingual policy, which promotes the use of Cantonese, Mandarin and English.
However, an increased emphasis on Mandarin - which is more commonly spoken in mainland China than Cantonese - in recent years has resulted in controversy, as Hong Kongers fear the loss of local culture, especially given the ongoing backdrop of pro-Beijing and pro-democracy tensions.
"Though the rising importance of Mandarin has not devalued English in the Hong Kong job market, it follows logically that when the focus shifts from a single foreign language to two, there is less time allocated to English study than previously," Tran said, adding that Hong Kong's reputation as an international finance hub could potentially be at risk if it lost out to other Asian cities on English proficiency.
China as a whole lags Hong Kong in the EPI, which Tran said was due to varying English proficiency across the country in line with development and income levels, with Tier 1 cities performing better than their inland counterparts.
ASEAN countries performed fairly well in the index. Malaysia and the Philippines took 12th and 13th places respectively, and ranked in the second-highest proficiency band.
Vietnam and Indonesia were surprisingly strong performers, EF's Tran said, coming in at 31st and 32nd places. He cited the competitive education system in Vietnam for the headway the country had made in improving English proficiency. Vietnam rolled out an ambitious $450 million national program in 2008 to improve English language proficiency by 2020.