Hong Kong Economic and Trade Office, San Francisco
Hong Kong
Hong Kong ranked 2nd freest economy

Hong Kong has ranked at number two in the Heritage Foundation's 2020 Index of Economic Freedom.

The Government said it is naturally disappointed that Hong Kong, which held the world's freest economy title for 25 successive years, has dropped to number two.

However, it welcomed the foundation's continued recognition of Hong Kong's various strengths and its awareness that the city remains a dynamic global financial center with a high degree of competitiveness and openness.

The Government added that it is gratifying to note Hong Kong attained the highest score among the assessed economies in terms of Fiscal Health, Business Freedom, Trade Freedom and Financial Freedom.

Hong Kong attained high scores of 90 or above in seven out of 12 components adopted for measuring economic freedom, though the city's overall score decreased by 1.1 points from the previous year to 89.1 primarily because of a decline in the Investment Freedom score which was due to security issues arising from the social unrest in the latter half of 2019.

While the local social unrest and turbulence in the past year, and how these were perceived overseas, might have affected Hong Kong's score in the investment environment, the Government stressed that Hong Kong's institutional strengths are unscathed and its underlying fundamentals remain strong.

The Government also said it is relevant to note that Hong Kong's scores in the three components relating to the rule of law - Property Rights, Judicial Effectiveness and Government Integrity - have all increased in the 2020 Index of Economic Freedom.

It added that investors continue to have confidence in Hong Kong’s long-term economic prospects, especially given the city’s platform role for international investors to access the Mainland market.

The statement also noted that since the return to the Motherland, the Hong Kong Special Administrative Region has been exercising “Hong Kong people administering Hong Kong” and a high degree of autonomy in strict accordance with the Basic Law. The “one country, two systems” principle has been fully and successfully implemented.

Under the “one country, two systems” principle, Hong Kong's capitalist system, free economy and trusted legal system remain as robust as ever, the free flow of capital within, into and out of Hong Kong is guaranteed and Hong Kong residents continue to enjoy a wide array of freedoms, including freedom of speech, of the press, of assembly and of demonstration.

With the further opening up and deepening of economic reform in the Mainland, Hong Kong is poised to be both a facilitator and a beneficiary of important national development strategies such as the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt & Road Initiative.

The Government pointed out that contrary to the foundation's concern, such integration with the Mainland through trade, tourism and financial links will not erode Hong Kong's freedoms.

Given that free market principles have long been essential considerations of policies and the cornerstone of the Hong Kong economy, the Government will continue to uphold the fine tradition of the rule of law and judicial independence, maintain a simple and low tax system, improve government efficiency, safeguard an open and free trade regime, and build a level-playing field for all, to create a favorable environment for business to thrive and to enable the economy to prosper, it added.

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