Letters | To help Hong Kong regain its edge, first admit its decline

In the Global Financial Centres Index released last week, Hong Kong rose by one place to fourth. In contrast to its apparent unconcern about being dropped from the Index of Economic Freedom earlier in the month, the city government appeared enthusiastic about the latest ranking result.

Laurence Li, chairman of the Hong Kong Financial Services Development Council, wrote the report’s foreword, while Christopher Hui, secretary for financial services and the treasury, spoke at the launch webinar. In its official statement, the government stressed that Hong Kong was ranked among the top five in all the five areas of competitiveness and noted the positive effects of the city’s connection to the mainland.

However, this does not help cover up the fact that Hong Kong’s competitiveness is diminishing. If one looks at the other two popular rankings – The Heritage Foundation’s Index of Economic Freedom and the IMD World Competitiveness Ranking – Hong Kong is indeed in decline.

In the Index of Economic Freedom, Hong Kong lost its first place, a position it had held for 25 years, to Singapore last year, and was even dumped from the table this year as it was considered no different from China. The government’s reaction was to accuse The Heritage Foundation of, in Financial Secretary Paul Chan Mo-po’s words, “ideological inclination and political bias”.

Compared to The Heritage Foundation that has a close relationship with Washington, the Institute for Management Development is a Swiss academic institution and more neutral. In the 2020 IMD World Competitiveness Ranking, Hong Kong was shown to have also fallen, from the top spot in 2017 to fifth, and the government blamed the social unrest for the drop. As Hong Kong’s rank is unlikely to improve this year, Covid-19 may be to blame when the report is issued in June.