With the accelerating process of urbanization, it becomes an important task to improve the competitiveness of the city
itself for social and economic development. City is a complex system which includes many subsystems. In this paper,
we establish an index system of urban competitiveness from the following aspects: the strength of economic
development, urban openness, the overall quality of the people, infrastructure and living environment. On this basis,
we use principal component analysis method to condense the index, and apply the non-equilibrium DEA method to
econometric analysis. We take seventeen cities in Shandong Province as an example, not only obtain the
comprehensive rank of urban competitiveness, but also give the direction and scale about improving the city
competitiveness. By the analysis, the competitiveness of cities in Shandong Province shows a typical "double heartshaped"
structure, Qingdao and Jinan, respectively, as the two cores. But in recent years, the gap between east and
west is expanding, and it shows a ladder-like distribution. The city competitiveness is uneven, so it is adverse for the
coordinated and stable development of economy.