Hong Kong tops ‘economic freedom’ chart despite political pressure from Beijing
(CNBC) – Hong Kong came in first in an annual ranking of the world’s most “economically free” countries, topping the chart for the 25th straight year, according to a U.S. think tank.
That’s a “remarkable achievement,” said Edwin Feulner, founder of The Heritage Foundation, which co-published the 2019 Index of Economic Freedom with The Wall Street Journal.
An economically free society is defined as an environment where individuals can work, produce, consume and invest in any way they please, and governments allow workers, money flows, and goods to move freely.
Hong Kong’s achievement is even more impressive considering the fact that the city has come under increasing political pressure from Beijing in recent years.
As a special administrative region of China, Hong Kong operates under the “one country, two systems” framework which allows the territory to enjoy a certain degree of autonomy not seen on the mainland.
But since the pro-democracy protests of 2014, which saw tens of thousands march through the streets and paralyze parts of the financial hub for weeks, Hong Kong has seen more and more protests against Chinese interference. That’s in turn prompted Beijing to harden its stance on dissent in the territory.
Hong Kong is still “clearly number one,” Feulner told CNBC’s Akiko Fujita on Squawk Box Monday. “It is the only country in the world that scored above 90 in our index — a 100 being perfect — and it’s 90.2.”
“I mean here is one country, two systems — Hong Kong number one, China 100,” Feulner said, highlighting the territory’s independence from the mainland.
Despite China’s low ranking, Feulner noted, the country was “doing better” this year than the last — climbing up to 100th place from last year’s 123rd position.
The index ranks each country based on four criteria: rule of law; government size — such as fiscal spending and tax burden; regulatory efficiency; and how open its financial and trade markets are.
Most of the data for the 2019 index were collated in the second half of 2017 through the first half of 2018.
Asked if China’s growing influence on Hong Kong could erode economic freedom in the territory, Feulner acknowledged that political pressure from Beijing is “something we worry about.”
Feulner also noted that the United States is “doing very well,” moving up the ranks from 18th place last year to 11th this year.
The world’s largest economy reversed its downward trend in 2018 and continued to improve because of deregulation and tax cuts, he said.
