HK marks 20 years as world’s freest economy
Print Edition
Hong Kong yesterday retained the title of the world’s freest economy for the 20th year in a row, with rival Singapore closing the gap between the two cities.
The rating shows how the southern Chinese financial hub remains one of the world’s friendliest places to do business but there were concerns populist government policies and the perceived level of corruption could tarnish that reputation.
The Index of Economic Freedom for 2014, published annually by the Heritage Foundation and the Wall Street Journal, showed that Hong Kong, along with Singapore, Australia and Switzerland were judged the freest economies in the world.
“[Hong Kong’s] overall score is slightly better than last year due to improvements in government size and regulatory efficiency that offset a decline in freedom from corruption,” the Heritage Foundation said on its website.
The Asian financial hub recorded its second-highest economic freedom score of 90.1 out of 100 and has now topped the table every year since the index was launched in 1995.
“A high degree of market openness, as measured by trade freedom, investment freedom, and financial freedom, has been complemented by a transparent regulatory environment and competitive tax regime,” the foundation said.
However, “populist policies that increase spending and empower the administrative bureaucracy, as well as an increasing level of perceived corruption,” held the city’s overall rating back, it said.
The city in 2012 implemented several measures to curb rising property prices, including an unprecedented bid to restrict the number of non-local homebuyers with a 15 percent property tax on foreign investors after residential prices had jumped 120 percent from 2008.
Hong Kong Chief Executive Leung Chun-ying’s administration has been plagued by several scandals, including illegal structures at his luxury home and the resignation of one of his ministers who was found guilty of housing fraud.
In the latest rankings, Hong Kong was closely followed by Singapore, with a score of 89.4 thanks to a more dynamic and competitive financial sector and an openness to global investment and trade.
The Chinese mainland was ranked 137th.
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