Hong Kong slips to 5th in World Bank rankings as best place to do business
Hong Kong has tumbled out of the top three in the latest World Bank tracking of the best economies to do business
Hong Kong is no longer in the top three best places to do business worldwide, according to a new World Bank report, as Singapore continues to maintain its top spot.
In the World Bank’s 2016 Doing Business report, Hong Kong now ranks fifth, as construction permits became harder to maintain and cross border trading more difficult.
Hong Kong was overtaken by Denmark and South Korea who now rank third and fourth respectively, as Singapore and New Zealand maintained their top rankings.
It came less than a month after Hong Kong lost its crown as best financial sector in the world, according to the World Economic Forum, again falling behind Singapore and New Zealand.
While the World Bank gave Hong Kong improved rankings for both ease of starting a business and paying taxes, it found construction permits had become harder to obtain.
According to the report, it now takes on average 11 procedures over 72 days to obtain a permit compared to only five procedures in the prior report.
China slightly increased its ranking since the previous report, now place 84th in the world compared to 90th in the prior report.
Daiwa chief economist for non-Japan Asia Kevin Lai said Hong Kong’s reputation had been damaged as a business centre over the past two years.
“The impression [is that] judicial independence has been compromised a little bit by indifference from the government and Beijing,” he said.
Lai said other countries including Singapore and South Korea had been improving their transparency, while Hong Kong was going backwards. “The Chinese government has been talking about cooperation of the three powers - that’s very bad news for Hong Kong,” he said.
International Finance Corporation East Asia and Pacific director Vivek Pathak said while a change of methodology was partly to blame for Hong Kong’s new position, the city needed to work on making trading across borders easier.
“The factors we took into account where the time it takes for goods to go across borders and the cost,” he said. “Hong Kong didn’t do very well on that.”
Still, he said Hong Kong was closing the gap with Singapore on a number of important measures.
“It has actually done better in many ways because the distance between it and the top country has reduced this year,” he said.