Hong Kong remains world's freest economy, report says

PUBLISHED : Friday, 18 October, 2013, 4:31am
UPDATED : Friday, 18 October, 2013, 4:31am

Hong Kong has retained its status as the world's freest economy despite concerns about the growth of government and a decline in respect for legal and property rights, according to the Canadian-based Fraser Institute.

The results will be welcomed by business leaders and government officials who often cite such reports when promoting Hong Kong as a business destination. Regional rival Singapore came in second while the mainland ranked 107.

The "Economic Freedom of the World 2012" report quantifies a range of "freedom ratings", including size of government, rule of law, securities, credit and labour market regulations, and hurdles to doing business.

"Hong Kong has been No1 since 1970. It means people are free to make their own choices. Investors aren't going to get tied up in red tape and there is a dependable legal system," said Fred McMahon, a Fraser Institute resident fellow.

Analysing data from the World Bank, the World Economic Forum and other third-party organisations, McMahon said the city had slipped in its respect for the rule of law.

One of the biggest movers is the US. Ranked second in 2000, it has steadily slipped to 18th. McMahon blamed this on policies started under George W. Bush, including increased regulation and an enlarged government.

While the data predates the double stamp duty this year, McMahon said that discriminating against a certain group - in this case non-permanent residents - was a cause for concern. "When talking about 14 per cent, you are beginning to talk about expropriation of property and an undermining of property rights."