• Wed
  • Jul 23, 2014
  • Updated: 7:33pm
BusinessEconomy

Hong Kong's status as world's freest economy threatened by Singapore, says Heritage Foundation

City tops world rankings again, but with Singapore snapping at its heels, American think tank says

PUBLISHED : Tuesday, 14 January, 2014, 1:20pm
UPDATED : Wednesday, 15 January, 2014, 1:43am

Hong Kong has been ranked the world's freest economy for the 20th consecutive year by a right-wing US think tank.

But the free-market-orientated Heritage Foundation has warned that increasingly populist policies, perceived levels of corruption and potential political instability mean the SAR's lofty position is being threatened by Singapore.

Hong Kong's overall score, at 90.1, rose 0.8 points year on year - but the rate of growth was weaker than Singapore's 1.4 points, which brought its score to 89.4.

The foundation says today's policy address by Chief Executive Leung Chun-ying could hold the key to the future standing of the city, as an expected increase in public spending to tackle poverty could weaken its position in the eyes of its annual index of economic freedom.

"In recent years, populist policies that increase spending and empower the administrative bureaucracy, as well as an increasing level of perceived corruption, have held back Hong Kong's overall rating," the conservative think tank said in its 2014 Index of Economic Freedom report.

Business interests had also exerted "a strong influence" on the legislative and executive branches of the government.

Terry Miller, director of the foundation's centre for international trade and economics, warned against further populism as the city plots its future democratic development.

Political turmoil could occur here as we move towards direct election … in 2017
FOUNDATION DIRECTOR TERRY MILLER

"A lot of potential political turmoil could occur here as we move towards direct election of the chief executive in 2017," Miller said.

"Turmoil ... can pose risks for economic freedom. [The foundation] will keep a close eye and make sure there is not a growth of populist measures to curry favour with certain segments of the electorate."

On the Occupy Central civil disobedience plan, Miller said its impact on next year's index "would depend on the disruption of Hong Kong society that took place", but he placed emphasis on the city's "ultimate respect of the rule of law".

Freedom from corruption fell a "significant" 1.7 per cent, recording 82.3 points (on a scale of one to 100). It was the city's second-weakest criterion on the index after monetary freedom, at 82 points.

The Independent Commission Against Corruption said it would continue to tackle graft to provide a level playing field for businesses. It said "isolated" cases that had attracted media coverage "may have affected" public perception recently.

Financial Secretary John Tsang Chun-wah said the government "is committed to maintaining the key elements of economic freedom".

The report said Singapore's openness to global investment had encouraged a more competitive financial sector. Mainland China dropped a place to 137th.

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patrick.gifford.180
In Singapore , you have like 12 different companies of taxis to choose from , different fares, different cars, hong kong , no choice .
patrick.gifford.180
Hong kong A free economy? , it is more like a cartel /rigged monopoly type economy .
A few families control everything, property , supermarkets , electricity, hotels , schools etc etc .
Sure you can open a small shop in sham shui po selling stuff, but if you really want to business big time and compete with big names , its more like fxxx yxx.
raglan
Why do every year HK pays so much attention to what a bunch of neo-con globalist clowns posing as a serious thinktank think?.......To our elite: is the craving for western approval really that great? Grow a brain and grow a pair, but that would be asking the impossible....
honger
What a joke. To start with, just compare the way the Med Council shuts off competition from foreign doctors while Singapore takes in 400 annually.
The list goes on....the property market, the supermarkets, even the universities now............
Sticks Evans
Well put. Also no nurses or technicians dare apply. Even though they sponsor recruitment junkets for the medical cadres.
In Singapore they have adopted a % quota for foreign talent. It at least provides a pathway for foreign talent.
But don't dare show up a an HK medical worker. Just never will be allowed/
DinGao
Air Pollution will soon drive away more foreign companies than might be attracted by any new economic policies.
dynamco
follow the money
who paid the Heritage Stink Tank to do the report
$$$ = how the report gets written
$$$ = tobacco does not kill people
$$$ = climate change does not exist
what a load of absolute bull crxp - go write a report about USA instead
XYZ
With the HK economy controlled by a handful of family-run companies and an ever-more intrusive government, the claim that HK is the freest economy is a cruel joke.
daily
Big deal...........but we've got the world's worst politicians and government as well..........kind of equates to nothing.
yellow_lynx_cat
Singapore has their share of lousy politicians and government, but they improved because the people have a bigger say and have a chance to decide who to govern them - Hong Kong has to settle for whoever is handpicked for them (even who could be chosen are handpicked).

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