Hong Kong ranked world’s freest economy for 18th consecutive year

January 12th, 2012

Hong Kong has been ranked the world’s freest economy by the Heritage Foundation for the 18th consecutive year since the index was first published in 1995.

The Financial Secretary, Mr John C Tsang, said today (January 12), “We welcome the Heritage Foundation’s high regard of Hong Kong as the world’s freest economy, a ranking we have held for 18 consecutive years. We are determined to uphold economic freedom in Hong Kong, which is the cornerstone of sustained economic stability, growth and prosperity.

“We see the role of the Government as that of an active facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field. We have sound regulatory regimes in place to ensure the integrity and smooth functioning of a free market. We also strive to remove impediments and provide support in an open and equitable manner to facilitate industries tapping into new markets or new growth industries,” Mr Tsang added.

According to the 2012 Index of Economic Freedom released today, Hong Kong scores 89.9 (on a scale from 0 to 100), well above the world average of 59.5.

Among the 10 economic freedom factors assessed, Hong Kong ranks first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.

The Heritage Foundation commended Hong Kong’s tax system as simple and efficient. It also considered monetary stability well maintained in Hong Kong.

The Heritage Foundation further complimented Hong Kong’s high-quality legal framework, which provides effective protection of property rights and strong support for the rule of law. In addition, Hong Kong’s regulatory efficiency and openness to global commerce strongly support entrepreneurial dynamism, while overall macroeconomic stability minimises uncertainty. Moreover, there is little tolerance of corruption in Hong Kong.

The Heritage Foundation also noted that Hong Kong’s economic interaction with the Mainland has become more intense and sophisticated, chiefly through strengthened financial linkages, and financial markets that are extremely well capitalised.

The study ranks the degree of economic freedom of 179 economies around the world. The 10 factors assessed are business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

Singapore and Australia remain second and third respectively according to the Index of Economic Freedom.

Of the other economies in Greater China, the Mainland ranks 138th, Macau ranks 19th and Taiwan ranks 18th.

Chinese version on next page.

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