Fraser Institute’s Economic Freedom of the World 2019 annual report ranks Hong Kong at its #1 spot – but not without a word of caution.
Photo: 9 June, 2019 million-person march.
Fred McMahon (Fraser Institute Resident Fellow and holder of the Dr. Michael A. Walker Chair in Economic Freedom) warned that the erosion of “one country, two systems” over the years and the Chinese government’s response to pro-democracy protests threaten the loss of Hong Kong’s position as a leader in economic freedom.
The most recent data available to accurately calculate the Economic Freedom of the World 2019 annual report derive from 2017. As usual, Hong Kong and Singapore claim the top two spots with their scores at 8.91 and 8.71 (out of 10.00) respectively. In contrast, China sits at 113 on the list with an overall rating of 6.42, putting it in the index’s third quartile. Other countries that occupy the lower quartiles include Russia (85th), Brazil (120th), and Venezuela (162nd) which hit the bottom of the index. From 1980-2017, the records show HK’s summary ratings span from 8.66 (1980) to 9.0 (2005), making it’s latest score the third highest it has achieved.
The study measured five broad areas to calculate each country’s economic freedom. The first area, Size of Government, has shown a gradual decrease over time with a 1.27 overall drop between 1980 and 2017. Gradings for Sound Money and Regulation have shown a steady increase over time, while Freedom to Trade Internationally remains stable. Volatility is present in Legal Systems and Property Rights which dipped from 1980 (8.13) to 1990 (5.94) before shooting back up in the 2000s. As of 2017, it stands at a rating of 7.93. Factors in this area such as Legal Enforcement of Contracts keeps this area’s score from surpassing the 8.0 mark.
China’s ever-growing presence over Hong Kong’s economic, social, and political life is certain to come to the detriment of its economic freedom. The Lion Rock Institute emphasised these concerns over the impact that recent events will have on HK’s economic freedoms during a press conference on September 24 (Tuesday). “The purpose of inviting [McMahon],” said Chairman Peter Wong, “is we hope that [he] will share his profound international experience and help Hong Kong to return to the right track of our free market system and rule of law.”
The press conference makes its point clear – whether one stands on the pro- or anti-Beijing side of the debate, Hong Kong’s economy is only free “when not shackled” by the government.
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