Hong Kong has dropped from Asia's top place to do business to number three behind Singapore and New Zealand because of fears that China may usurp its freedoms, according to a survey by The Economist Intelligence Unit (EIU).
The SAR had held the pole position for the past four years for a wide range of criteria that include operating costs, market opportunities, tax rates and labour.
EIU spokesman Adam Aston said: 'Hong Kong's fall in rank is not the result of any dramatic change in 1997.
'Strong growth, low taxes, property rights and free trade will remain in place.
'The risk is that China may not honour its promise to maintain Hong Kong's freedoms and government intervention is likely to become more widespread.
'In contrast, Singapore is predicted to retain its standing for the next five years with further improvements pushing up its absolute score on the index.' Top Hong Kong Government officials have used local and international forums to stress the success of 'one country, two systems' and underline the SAR's commitment to hands-off administration.
Earlier this month the Heritage Foundation Index of Economic Freedom found Hong Kong, for the fourth consecutive year, to be the freest economy in the world.
