A Canadian think tank has ranked Hong Kong as the most economically free jurisdiction out of 159 in the world, but warned of a potential deterioration in its leading position because of interference from mainland China.
The new ranking by the Fraser Institute, based on data from 2015, gave Hong Kong 8.97 points out of 10 in total, a slight drop from 8.99 in the 2014 result. Singapore and New Zealand were at second and third place at 8.81 and 8.48 points respectively. China stood at 112th place with 6.4 points.
In the main areas of the study, Hong Kong ranked high in regulation and freedom to trade internationally, in first and second place respectively. Hong Kong also ranked sixth in terms of size of government.
“While Hong Kong is again the most economically free, there is a valid concern that interference from mainland China—which ranks 112th in economic freedom—will ultimately lead to deterioration in Hong Kong’s top position, particularly in rule of law, which helps ensure equal freedom for all,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom at Fraser Institute.
In last year’s report, McMahon warned that Hong Kong’s ranking would drop should it be that “China encroaches on its one country, two systems relationship with Hong Kong.”
The government welcomed the ranking as the freest economy, which “reaffirms Hong Kong’s long-standing commitment in upholding economic freedom and sustaining a favourable business environment.
“In light of keen global competition, we will continue to uphold the principles of economic freedom, which is vital for Hong Kong to maintain its competitiveness,” a spokesman said.
The spokesman said the government rejected the institute’s concern that mainland Chinese interference will lead to a deterioration of the rule of law.
“We must point out that there are no objective facts showing that the rule of law or judicial independence in Hong Kong has been undermined. We remain highly confident about the rule of law and judicial independence in Hong Kong, and will endeavour to enhance the proper understanding of the international community in this respect through different channels.”
The spokesman added Hong Kong’s performance in the broad area of “legal system and property rights” in the report – at 11th place – remained largely the same as that of last year.
On Thursday, the latest Global Competitiveness Report by the World Economic Forum put Hong Kong in sixth place, rising from nineth last year. But the city’s ranking for judicial independence dropped five places to 13th place.
In response, Secretary for Justice Rimsky Yuen said that there had been no damage to Hong Kong’s judicial independence over the past year.