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Hong Kong rated world's freest economy

Hong Kong rated world's freest economy

Hong Kong has been named the world's freest economy for the 12th year in succession in an annual report published yesterday by the right-wing American think-tank The Heritage Foundation.

The ranking by the Washington-based organization is in stark contrast to other recent gauges of economic freedom that have downgraded the southern Chinese territory, criticising it for rising corruption and interference by Beijing.

The Heritage Foundation said Hong Kong, a British colony until 1997, had extended its lead at the top of its Index of Economic Freedom, ahead of second-placed rival Singapore.

Describing Hong Kong as the "poster economy for economic freedom around the world" the foundation and co-sponsors, the Wall Street Journal Asia, awarded the city a score of 1.28 out of 5, where 0 is equal to total economic freedom. Last year it scored 1.35

"Hong Kong did better largely as a result of the government not doing anything wrong," Danny Gittings, deputy editorial page editor of the Journal, told reporters.

"It's improvement came largely on the back of its improving economy," Gittings added.

The index ranks each economy according to the level of government intervention, public spending and income, trade and monetary policy, property rights and regulations.

Gittings said Hong Kong scored well because its economy had grown while its spending had remained steady.

Gittings warned that proposals to introduce a consumption tax and government plans to draw up anti-monopoly legislation would hurt the city's standing in the index although many support such moves as helping provide a more level playing field.

"The danger is that when you talk about competition policy you are talking about more regulation," he said.

"Providing more competition would be a good thing but (whether) you can do that with a competition policy is another matter."

The ranking comes despite criticism that Hong Kong's economy is dominated by a handful of powerful monopolies and cartels which not only control prices of particular goods but also block market access by competitors.

Further, it is out of step with other gauges of economic freedom, particularly a survey by the World Economic Forum of business leaders in September that saw Hong Kong tumble to 28th place from being top of list in 1999.

The survey marked the city down on interference from China and growing corruption.

Updated : 2021-06-15 20:07 GMT+08:00