Competitive edge dulled by concerns on judiciary
Concerns about judicial independence, rising corruption and intellectual property rights have led to Hong Kong's fall down the rankings of the world's most competitive economies, according to the World Economic Forum.
Hong Kong has dropped seven places to 28th out of 117 economies in the World Economic Forum's Global Competitiveness Report 2005-2006.
The city has been sliding down the WEF's annual economic competitiveness report since dropping out of the top three in 1999, with a slight rebound last year.
'Hong Kong saw a weakening in perceived judicial independence, the protection of property rights, and in government favouritism in policy-making', as well as rising concerns about corruption, the WEF report states.
Finland was ranked the most competitive country in the world for the third consecutive year and the United States was ranked second, followed by Sweden, Denmark, Taiwan, Singapore, Iceland, Switzerland, Norway and Australia. Malaysia rose to 24th place from 31st in the report, which is based on a poll of 11,000 business leaders and hard economic data.
The government claimed the WEF's concerns regarding Hong Kong were unfounded.
'Our firm commitment to rule of law, a level playing field, and efforts and achievements in respect of anti-corruption are internationally recognised,' a government spokesman said. 'The World Economic Forum's accusation of weakening in Hong Kong's judicial independence, property rights protection and a rise in favouritism in government decisions and corruption is unfounded.'
He cited rankings by other organisations that ran contrary to the WEF's, including the rating of Hong Kong as the world's freest economy by the US-based Heritage Foundation and two North American think-tanks, the Fraser and the Cato institutes.
Meanwhile, the mainland has slipped three places, from 46th to 49th, continuing last year's slide.
'When we ask the business community about the institutional environment, there is a sense of caution,' WEF chief economist Augusto Lopez-Claros said about China.
'There are questions about property rights [and] about the judicial environment. Over the longer term, there is concern about the social safety net, the pension system and the banking sector.'