Hong Kong still freest economy but faces uncertainties ahead

Hong Kong is again ranked as the world’s freest economy, but Fraser Institute said interventions by Beijing will likely have a negative impact in future reports.

The institute ranked Hong Kong as the world’s freest economy in the Economic Freedom of the World 2021 Annual Report.

Hong Kong has always stayed on top since the inception of the report. Singapore, once again, comes in second.

The latest ranking is based on most recent comprehensive data in 2019. Among the five areas of assessment, Hong Kong continued to rank top in “freedom to trade internationally” and “regulation”.

“The apparent increased insecurity of property rights and the weakening of the rule of law caused by the interventions of the Chinese government during 2020 and 2021 will likely have a negative impact on Hong Kong’s score, especially in legal system and property rights, going forward,” the institute said.

It explained that as the ratings are based on data for 2019, Hong Kong’s performance still does not fully reflect all the unrest that began in 2019, nor the new security law imposed in 2020.

“Even so, we are perhaps just beginning to see the effect of policy changes in Hong Kong as the result of the 1997 establishment of Hong Kong as a Special Administrative Region within China,” it stated.

In this year’s report, Hong Kong’s overall rating fell by over one-tenth of a point to 8.91 in 2019 from 9.03 in 2018.

Almost the entirety of this decline is the result of a decline in its score for legal structure and property rights from 7.87 to 7.53.

The Hong Kong government said the report is “an unequivocal affirmation of Hong Kong’s long-standing and steadfast commitment to building a free economy with a level playing field”.

However, a government spokesman said the comments regarding Hong Kong’s rule of law, the national security law and intervention by mainland are “unfair”.

“We would like to stress that, under ‘One Country, Two Systems’, HK SAR’s trusted legal system remains as robust as ever,” he said.

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