China is one of the big movers in Bloomberg's annual innovation index, while Australia has slipped one place to 19th on the list.
Bloomberg analyses each country in a range of areas including education, research and development, and manufacturing before coming up with a list of the 60 most innovative countries.
South Korea topped the chart for a sixth time with Germany a close second, while China jumped three places to 16th thanks largely to patent activity.
It's the first time China has finished ahead of Australia.
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