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Hong Kong has been ranked the world’s freest economy for the 18th consecutive year in the 2012 Index of Economic Freedom, released on January 12 by The Heritage Foundation and The Wall Street Journal.
The Financial Secretary, John C. Tsang, welcomed the Heritage Foundation’s high regard of Hong Kongas the world’s freest economy. He stated that the government was determined to uphold economic freedom in Hong Kong, which was 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,” Mr. Tsang said.
“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.”
On a scale from zero to 100, Hong Kong scores 89.9, well above the world average of 59.5.
The index, which ranks the degree of economic freedom of 179 economies, evaluates economies in the following 10 categories: labor freedom, business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, and freedom from corruption.
Among the 10 categories assessed, Hong Kong ranks first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.
Hong Kong is ranked first out of 41 economies in the Asia–Pacific region.
Hong Kong Commissioner to the United States, Donald Tong, welcomed the index’s findings, saying: “I am happy to learn that Hong Kong’s adherence to a free-market philosophy, together with its business-friendly environment and sound regulatory regimes, has once again garnered such accolades for the 18th consecutive year. Economic freedom underpinned by a commitment to the rule of law is the bedrock of our success.
“We do not take such recognition for granted and are always working to enhance Hong Kong’s competitiveness and maintain its standing as a global business, financial, and logistics center.”
The index commended Hong Kong’s tax system as simple and efficient, and considered the city’s monetary stability well maintained.
It 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, the index found that the city’s regulatory efficiency and openness to global commerce strongly support entrepreneurial dynamism. Moreover, there is little tolerance of corruption.
2012 Index of Economic Freedom