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Wednesday, September 16, 2015

Hong Kong retains top spot as ‘world’s freest economy’ for 21st year in a row

Hong Kong has been ranked the world’s freest economy for the 21st year in a row – but the city is weighed down by perceived corruption and eroding public trust, according to the US think tank Heritage Foundation.
Hong Kong scored 89.6 out of 100 points in overall economic freedom, down by 0.5 points from last year. But the territory's lead over its closest rival has further narrowed, with economic freedom just 0.2 points higher than second-placed Singapore
New Zealand was ranked third, followed by Australia, Switzerland, Canada and Chile in the overall rankings.

The index measures economic freedom in 186 countries based on 10 quantitative and qualitative factors, such as rule of law and regulatory efficiency, on a scale of 0 to 100.
The foundation noted that Hong Kong showed small improvements in business freedom, labour freedom and fiscal freedom but these were outweighed by a higher level of perceived corruption.
Its scoring in “freedom from corruption” fell 7.3 points to 75 points, a record low since the 1997 handover.
In its 2015 report, the foundation said Hong Kong continued to thrive on the free flow of goods, services and capital.
“As the economic and financial gateway to China, and with an efficient regulatory framework, low and simple taxation, and sophisticated capital markets, the territory continues to offer the most convenient platform for international companies doing business on the mainland,” it said.
Hong Kong’s “impressive level of resilience” enabled it to weather global economic swings and domestic shocks, said the conservative US think tank, funded by a variety of companies and individuals, including the billionaire Koch brothers.
However, the foundation said the Hong Kong economy’s uniqueness, based on its commitment to economic freedom and the autonomy afforded it by mainland China, had “faded” slightly.
“Although Hong Kong maintains the features of an economically free society, economic decision-making has become somewhat more bureaucratic and politicised, and the government’s administrative scope and reach have expanded,” it said in the report.
“Recent political events appear to have undermined public trust and confidence in the administration,” it said.
The Hong Kong government welcomed the latest ranking. “The government will continue to uphold our fine tradition of the rule of law, a clean society with a level playing field, an efficient public sector, and a simple tax regime with low tax rates,” a spokesman said.
On the perceived corruption rating, the government spokesman said high-profile cases might have influenced this, but insisted the cases “are isolated since the levels of corruption in Hong Kong remain very low”.
“The way these cases were handled in accordance with the law clearly demonstrates our determination to fight corruption without fear or favour, regardless of the background, status and position of those involved,” he added.
Former chief secretary Rafael Hui Si-yan and property tycoon Thomas Kwok Ping-kwong were convicted last year for misconduct and bribery in the city’s biggest graft trial.
Former chief executive Donald Tsang Yam-kuen has also been placed under investigation in another case by the Independent Commission Against Corruption (ICAC) over allegations that he accepted inappropriate favours from local tycoons, including trips on luxury yachts and private jets.
A spokesman for the ICAC said extensive media coverage on some cases, including the prosecutions and convictions of a former senior government official and senior executives of a listed company, might have affected respondents’ impression.
“Yet, these are isolated cases and should not be seen as an indicator of deterioration in the probity situation in Hong Kong,” he said.
Director of Public Prosecutions Keith Yeung said on Monday that the probe into Tsang was complete and that the Department of Justice would decide later whether to prosecute, according to Chinese state news agency Xinhua, in a rare report on the progress of the investigation.
Xinhua also reported that current Chief Executive Leung Chun-ying refused to comment on the case.

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