Hong Kong continues to take the top spot as the world’s freest economy in the latest index of economic freedom published by American think tank the Heritage Foundation, the 22nd year in a row the city has been awarded the title. However, the report warned that Hong Kong’s rule of law could be undermined by Beijing’s continuous attempts at interference.
Hong Kong scored 88.6, one point down from last year. It is currently 0.8 points ahead of rival city Singapore, which scored 87.8. The gap between the two cities has widened; last year, the margin stood at 0.2 points.
New Zealand, Switzerland and Australia take third, fourth and fifth places at 81.6, 81.0 and 80.3 points respectively.
The index ranks 186 countries according to their freedoms in ten different categories under four policy areas – rule of law, limited government, regulatory efficiency, and open markets. The countries’ performances in these categories are graded on a scale of 0 to 100, after which they are given an average score.
Hong Kong was praised for its open markets, strong property rights and highly competitive fiscal policies. Although the report noted that corruption rates remain low, citing the “anti-corruption prosecution of a high-profile property developer” Thomas Kwok Ping-kwong in 2014, the city’s “freedom from corruption” score, at 74.0 points, was at its lowest since 1999.
The research institute also warned that Beijing’s “ongoing efforts to erode the power of Hong Kong’s judiciary and Legislative Council and to intervene in the economy could undermine the rule of law”. For now, though, the city still enjoyed an independent judiciary and protection of private property rights, it said.
China, with 52.0 points, took 144th place and is considered “mostly unfree’. “Over the past year, China’s economy has undergone a period of financial market volatility and economic slowdown,” the Heritage Foundation said. “Deep-seated structural problems, including continued over-reliance on public investment and exports for growth, a state-controlled financial sector, and regulatory inefficiency, have become more acute.”
The Heritage Foundation said that the world average score of 60.7 is the highest recorded in the 22-year history of the index. It also noted that the situation in the Asia-Pacific region remains polarised; it is home to four of the world’s five freest economies, but also eight of its most repressed.
Speaking ahead of the Executive Council meeting on Tuesday, Chief Secretary Carrie Lam noted Hong Kong’s performance in the rankings and said the government will do their best to maintain the business environment in Hong Kong.
“The Government will continue to uphold free market principles by providing a favourable business environment, ensuring fair competition and free trade, maintaining a simple tax regime with low tax rates, and keeping an efficient public sector. The Government will also continue with our best endeavours to uphold the rule of law and an independent judiciary,” a government spokesperson also said.
Founded in 1973, the Heritage Foundation is a US public policy research institute that arose out of the Ronald Reagan era. It has a history of backing conservative policies.