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Hong Kong economy

‘Chinese interference’ a threat to Hong Kong’s ranking as top free market economy, institute says

Fraser Institute of Canada report second in as many days to bring heighten scrutiny of the independence of Hong Kong’s courts

PUBLISHED : Friday, 29 September, 2017, 11:54am
UPDATED : Friday, 29 September, 2017, 10:41pm

Hong Kong once again ranked as the world’s the freest economy, but a Canadian institute warned its long-held position at the top could be threatened by Beijing’s perceived interference in the city’s affairs that could undermine the rule of law.

The Fraser Institute of Canada ranked Hong Kong first in its Economic Freedom of the World report on Thursday. The report carried an ominous warning, a day after the World Economic Forum downgraded the city’s judicial independence score, heightening scrutiny of the city’s courts.

“While Hong Kong is again the most economically free, there is a valid concern that interference from mainland China will ultimately lead to deterioration in Hong Kong’s top position, particularly in rule of law, which helps ensure equal freedom for all,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom at Fraser Institute.

The World Economic Forum on Wednesday lowered Hong Kong five places in its judicial independence score despite the city’s overall rise to sixth in the forum’s annual competitiveness index.

This prompted justice minister Rimsky Yuen Kwok-keung to defend the city’s courts, claiming there were some “subjective perceptions” in international community.

Hong Kong has held the top position on the institute’s Economic Freedom report since 1980. Singapore continued to rank second, followed by New Zealand. China ranked 112th.

McMahon gave a similar warning last year, saying that Hong Kong’s ranking will drop “if China encroaches on its one country, two systems relationship with Hong Kong”.

His latest comments came at a sensitive time. Local courts have been increasingly accused of being influenced by politics after the recent jailing of democracy activists and the ousting of opposition lawmakers who insulted China or failed to take the oath of office properly.

Last week, the city’s leader, Chief Executive Carrie Lam Cheng Yuet-ngor, hit back at “disrespectful” and “disturbing” remarks by British politicians and commentators who objected to the jailing of three democracy activists last month.

The jail terms were prompted by a successful push by Yuen for a sentencing review after the activists were initially given more lenient punishments.

Still, Hong Kong’s score in the Canadian report’s “legal system and property rights” category remained unchanged from last year.

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While the Hong Kong government welcomed the institute’s recognition of the city as the world’s freest economy, it defended itself saying, “there are no objective facts showing judicial independence has been undermined”.

“We remain highly confident about the rule of law in Hong Kong, and will endeavour to enhance the proper understanding of the international community in this respect through different channels,” a government spokesman said.

The research institute measures economic freedom of 159 territories based on factors such as levels of personal choice, ability to enter markets, security of privately owned property and rule of law. The 2017 report was based on data in 2015.