Hong Kong has maintained its position as the world’s freest economy in The Heritage Foundation’s Index of Economic Freedom for the 21st consecutive year.
Hong Kong retained top position in business freedom, financial freedom and trade freedom; received the second-top score in investment freedom; and saw a minor improvement in its scores for labour freedom and fiscal freedom.
A Hong Kong Government spokesman said: “We are committed to the free market principles which are the foundation of Hong Kong’s sustained economic stability, growth, and prosperity. We are pleased to see that our efforts to maintain Hong Kong’s economic freedom have been reaffirmed internationally for 21 years in a row.”
The Heritage Foundation highlighted Hong Kong’s efficient and transparent regulatory framework along with its low and simple tax regime, sophisticated capital markets, and its status as the most convenient platform for international companies on the main land which are doing business.
On the other hand, it also remarked that the institutional uniqueness of the Hong Kong economy had “faded a bit.” In this regard, the Government spokesman added that “the Government will continue to … safeguard our free market principles along with our fellow citizens and maintain Hong Kong’s status as an international city.”
The Index of Economic Freedom of 2015 ranks the degree of economic freedom in 178 economies from all over the world. The following ten factors are assessed: business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, labour freedom and freedom from corruption.
In 2015, Hong Kong achieved an overall score of 89.6 which was based on a scale from 0 to 100, noting a decline of 0.5 points compared with the previous year. This score was significantly above the global average of 60.4. Singapore ranked second with 89.4, followed by New Zealand (82.1), Australia (81.5) and Switzerland (80.5).
In respect to the narrowing gap between Hong Kong and Singapore in 2015 the spokesman commented “We are keenly aware of competition from other economies within and outside the region,” he confirmed. “We always try to keep up with the latest global economic developments and strive to enhance our competitiveness.”
Although Hong Kong maintains the features of an economically free society, economic decision-making has become somewhat more bureaucratic and politicized, and the government’s administrative scope and reach have expanded. Recent political events appear to have undermined public trust and confidence in the administration.
Just above the United Kingdom, The United States scored 76.2, making its economy, for the second successive year, the 12th freest in the 2015 Index. The United Kingdom (75.8) at six places below Canada (79.1). Its score is 0.7 points higher than last year, with modest gains in six of the ten economic freedoms, including control of government spending and fiscal freedom, overshadowing a minor decline in business freedom.
In conclusion, although the downward spiral in US economic freedom since 2008 came to a halt in the 2015 Index, it was noted that “a 1.6-point decline in overall economic freedom over the past five years reflects broad-based deterioration in key policy areas.”
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