Hong Kong loses ranking as world’s freest economy due to months of unrest
- City falls into second place in index compiled by Heritage Foundation, which pointed to upheaval sparked by extradition bill as reason for downgrade
- Hong Kong commerce chief brushes off the criticism, saying Hong Kong’s key strengths remain intact
Months of social and political unrest have knocked Hong Kong off the top of a widely regarded index ranking the world’s freest economies, a position the city held for 25 straight years.
Regional rival Singapore climbed from second into first place in the latest Index of Economic Freedom published on Tuesday by the conservative Heritage Foundation think tank based in Washington. The city state scored 89.4, beating Hong Kong’s 89.1.
“Hong Kong’s economy was rated the freest in the world from 1995 through 2019,” the foundation said. “The ongoing political and social turmoil has begun to erode its reputation as one of the best locations from which to do business, dampening investment inflows.”
The city was pulled down by a decline in its investment freedom score, which stood at 80, compared to 90 last year.
Rounding out the top five were New Zealand, Australia and Switzerland.
Researchers examined 186 economies across 12 areas: property rights, government integrity, judicial effectiveness, government spending, tax burden, fiscal health, freedom in business and labour, as well as monetary policy, trade, investment and financial freedom.
Hong Kong saw its scores increase for property rights, government integrity and judicial effectiveness over last year. But the foundation did flag up some concern over the courts, saying the “independence of Hong Kong’s judicial system was seriously imperilled in 2019 by a government proposal for an extradition law”.
The extradition bill would have allowed for the transfer of suspects to mainland China, among other jurisdictions. The proposal triggered months of protests across the city, which often descended into violent clashes between demonstrators and police officers that continued long after the administration withdrew the bill.