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Hong Kong risks losing its 'world's freest economy' title, says report

Think tank says the small-government method that has served the city so well over the years is increasingly being undermined by bureaucrats

PUBLISHED : Friday, 11 January, 2013, 12:00am
UPDATED : Friday, 11 January, 2013, 4:24am

Hong Kong risks losing its prestigious title as the world's freest economy if the government presses ahead with its populist policies, the Heritage Foundation warned, in the release of its annual index yesterday.

The conservative American think tank wrote in its 2013 Index of Economic Freedom that Hong Kong, the winner of the title every year since the ranking started in 1995, scored the lowest for rule of law among the world's five freest economies.

The city ranked 12th in "freedom from corruption" and 2nd in "property rights", the two measurements for rule of law.

Describing the city's economic freedom as having been eroded in recent years, the report said: "Any further implementation of populist policies that empower the bureaucracy or undermine the principle of limited government could threaten its standing in future."

It was the first such warning since Leung Chun-ying became chief executive in July last year. Leung has proclaimed a need to adopt "big government", partly to explore alternative economic opportunities, a departure from his predecessors' attempts to stick to the small-government approach. He already introduced measures to curb property and health care demands.

Researcher Terry Miller said: "It's a very risky thing for governments to substitute their own judgments for the judgment of the market."

Hong Kong's score in the index dropped 0.6 points from last year to 89.3, a seven-year low. The foundation attributed the fall to increases in government spending relative to gross domestic product, and inflation.

This also drew the city closer to its key regional rival, Singapore, the world's second freest economy. Singapore scored 88, up from last year's 87.5. The gap between the two narrowed from 2.4 points to 1.3 points.

The next three freest economies, based on the index, are Australia, New Zealand and Switzerland. The US is in 10th place and the UK is 14th. Taiwan made 20th place and the mainland 136th, of the 177 countries and regions surveyed.

Chong Tai-leung, a Chinese University associate professor in economics, said: "Compared to the rest of the world, Hong Kong still looks pretty free. But internally, [it] has lost some freedom.

"I expect Hong Kong's rating to drop in the coming five, six years."

The acting financial secretary, Professor Chan Ka-keung, responding to the ranking, said: "The government will continue to provide a business-friendly environment while establishing an appropriate regulatory regime to ensure the integrity and smooth functioning of the free market."

The global average score was 59.6 points, a tenth of a point higher than the average last year.

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johnyuan
Carrefour tried twice to serve Hong Kong. It closed shop when its common suppliers to other supermarkets in Hong Kong which were warned to be dropped if continued to be Carrefour’s supplier. It was reported in SCMP. The second time for Carrefour failing to set its foot in Hong Kong was due to landlord’s refusal in leasing space. It was also reported in SCMP. Yet the Heritage Foundation read and saw no evils. It really had destroyed its own credibility long time ago by forestalling yearly since its inception of the dubious adulation of world's freest economy title to Hong Kong. In return all the previous Hong Kong officials lied too yearly by boosting of its false honor to the world. But all said one still may not know exactly the truth if it was a territory arrangement for Carrefour to go north without much competition of the likes from Hong Kong.
Byebye
If freedom scored at the expense of the ordinary / working class people of Hong Kong, such freedom is not freedom. Why is Hong Kong always compare to Singapore? Hong Kong does not have a PM who was or is still in power for all his life. Hong Kong's freedom means : a small roof over one's head after a hard day's work, good living environment, less poverty especially among the very young and the aged, the vast gap between the wealthy and the poor, good medical, good education, healthy air..... Do not waste time in trying to gain that little percentage just to beat another country to be better, without consideration to well being of the people who put in the hard work.
elledgeg1
Does this mean that the interests of the market and business are more important than the welfare of the people of `hong Kong?
CatInAFlap
This story fails to point out that the Heritage Foundation has an agenda far further to the right than that of coffin-dodger Thatcher and her evil and illegitimate US neo-con spawn.
SpeakFreely
This is probably a bigger liar than saying no june 4 but PD is not coming out to challenge the survey...and keep letting the government and developers ripping off all of us...does it makes sense PD? where are you Mr. long Hair and Ho? Are you too busy suing CY and totally forgot about those 200k plus people living in coffin, cage home and subdivided flats? Come on...
SpeakFreely
If Hk is so free, I would like Walmart and Carefour to come in to reduce our grocery price! How about getting international developers here to compete and reduce housing price? Are you dreaming or out of your mind? Where is the freedom?
SpeakFreely
This probably give more bullets to developers to rip off more HK people.
honkiepanky
Informed Americans know Heritage as a propaganda organ of the Republican party and its backers. There is absolutely no reason for anyone in HK to take them seriously.
maecheung
"Hong Kong risks losing its prestigious title as the world's freest economy if the government presses ahead with its populist policies".......What's the BIG DEAL? If Hong Kong families and working people can find a decent affordable housing, and decent standard of living, no one really cares what title it has!
low_cn
Economic freedom implies that the rich controls the economy and gets richer at the expense of the poor.

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