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This study analyzes PISA 2022 data using a two-level hierarchical linear model (HLM) to explore the impact of a competitive learning atmosphere (CLA) on East Asian students’ cognitive and non-cognitive abilities, with comparisons to OECD countries. CLA shows a significant negative effect on both outcomes across the full sample, with weaker impacts in East Asia. However, moderate CLA levels may enhance academic performance but offer no benefits for non-cognitive abilities. When CLA is further disaggregated into standardized testing and ability grouping, the results remain consistent. In summary, CLA negatively affects students' overall development, though it provides limited academic advantages under specific conditions.