Hong Kong has been ranked as the world's freest economy by the Heritage Foundation and The Wall Street Journal for the 13th consecutive year in the 2007 Index of Economic Freedom released in January.

According to the study, Hong Kong scores extremely well in almost all areas of economic freedom.

Among the 10 individual areas assessed, Hong Kong ranks first in four – trade freedom, investment freedom, financial freedom and property rights. Hong Kong also ranks in the top 10 in four other areas – fiscal freedom, freedom from government, monetary freedom and labor freedom.

The study notes that Hong Kong's income and corporate tax rates are extremely low, and overall taxation is relatively small as a percentage of GDP.

It also reports that Hong Kong's business regulation is simple, the labor market is highly flexible, and investment in Hong Kong is open, with virtually no restrictions on foreign capital.

The Heritage Foundation complimented Hong Kong on being one of the world's leading financial centers, with extensive banking and services industries which are transparent and regulated non-intrusively. In addition, the judiciary, independent of politics and virtually free of corruption, demonstrated an exemplary ability to protect property rights.

The study measures the degree of economic freedom of 157 economies worldwide by assessing 10 factors.

Within the ranking, Hong Kong was followed by Singapore, Australia and the United States.

According to the Heritage Foundation, the methodology for this year's assessment had been revised to provide a more refined and clearer picture of economic freedom.

2007 Index of Economic Freedom: http://www.heritage.org/research/features/index/