HK world’s freest economy
Hong Kong, January 5:
Hong Kong has again been ranked the world’s freest economy, but critics say the city could be in danger of slipping from its perch, according to a survey released today.
It was the 11th consecutive year that Hong Kong, with its free port, low taxes and little government intervention, has topped the annual survey by a US think tank, the Heritage Foundation, and the Wall Street Journal.
The Southeast Asian city-state of Singapore ranked second and Luxembourg came third.
Estonia, formerly part of the Soviet Union, took a surprising fourth place, highlighting the rapid progress in the country’s economic reforms. Hong Kong returned to Chinese rule in 1997, but has a separate economy and enjoys Western-style freedoms and considerable autonomy. Edwin J Feulner, president of the foundation, warned that Hong Kong’s advantages are no longer as distinctive as they once were as other economies liberalise.
“A lot of other countries are making the right moves in the right direction,” Feulner said in an interview, “Hong Kong can never take its standing as number one for granted.” Feulner said he disapproved of the prospects of introducing new taxes in Hong Kong. His comment came after Hong Kong’s financial chief Henry Tang repeatedly said he favors introducing a sales tax.
Feulner also criticised the government for proposing expensive property projects in recent years as ways of boosting Hong Kong’s international standing in technology and the arts.
He cited the failure of a technology zone development called Cyberport — touted as Hong Kong’s answer to Silicon Valley — and a controversial multibillion cultural park project as examples of what he called the government’s poor use of capital.
Other critics accused officials of not doing enough to liberalise the economy.
Andrew Work of the Lion Rock Institute, a Hong Kong-based think tank that advocates free-market policies, said the sectors of public utilities and gambling remain monopolised.
Financial Secretary Tang welcomed Hong Kong’s ranking, saying the government was committed to preserving its free market economy and making further improvements if necessary. He did not elaborate.