The Hong Kong government has hailed a report that named the city as the world’s freest economy, based on data from 2018. However, it rejected remarks that a “weakening rule of law” may undermine the city’s future ratings.
The semi-autonomous region ranked top in the 2020 Annual Report on Economic Freedom of the World published by Canadian think tank Fraser Institute on Thursday, followed by Singapore and New Zealand.
The study showed Hong Kong was considered the most supportive of economic freedom across the globe in 2018 – with the score of 8.94 out of 10. Researchers said their findings were based on statistics from two years ago.
The institute said the 2020 report did not account for the impact of last year’s anti-extradition bill protests in Hong Kong and the “sometimes brutal suppression” that followed. It also did not consider the effects of the Beijing-imposed national security law, which the researchers deemed would have a negative impact on the city’s ranking in future reports.
“The apparent increased insecurity of property rights and the weakening of the rule of law caused by the interventions of the Chinese government during 2019 and 2020 will likely have a negative impact on Hong Kong’s score,” the report read.
The study measured the degree of economic freedom by assessing five areas, including the size of government controlled enterprise and taxation, legal system and property rights, and freedom to trade internationally.
The government welcomed the report on Thursday, saying it was an “unambiguous recognition” of the city’s long-standing and steadfast commitment to building a free economy. But the authorities rejected the Vancouver-based institute’s remarks that Hong Kong’s ranking may slip owing to the what they saw as a decline in the city’s rule of law.
“It is with regret that Fraser Institute pre-empts lower future scores in this area with biased comments and unfair speculations based on selective ungrounded views,” a government spokesman said in a statement.
The government also defended the enactment of the security legislation that outlaws secession, subversion, collusion with foreign forces and interference with transport and other infrastructure. It said the law was vital in bringing the city “back on track” and safeguarding its long-term prosperity and stability.
The Fraser Institute, which works closely with the self-styled libertarian Lion Rock Institute in Hong Kong to promote economic freedom, was among a group of international think tanks from 35 countries and regions which penned an open letter in early July to condemn the passing of the sweeping security legislation.
The signatories accused Beijing of attacking the Basic Law and crushing the city’s freedoms: “We stand with the people of Hong Kong as they attempt to protect their freedoms and rights and believe a strong global response is critical.”
A questionnaire released by the American Chamber of Commerce in mid-July revealed almost 40 per cent of its members surveyed were “extremely concerned” about the national security law. Some respondents said the legislation raised questions about the city’s status as an international business hub, while interviewees were divided equally in terms of exit strategies.