Hong Kong topped the annual ranking of the world’s most “economically free” countries, topping the rankings for the 25th consecutive year, according to a US think tank.
It’s a “remarkable achievement,” said Edwin Feulner, founder of The Heritage Foundation, which co-published the 2019 Index of Economic Freedom with the Wall Street Journal.
An economically free society is defined as an environment where individuals can work, produce, consume and invest as they please, and governments allow workers, money flows and goods to flow freely.
Hong Kong’s achievements are even more impressive considering the city has come under increasing political pressure from Beijing in recent years.
As a special administrative region of China, Hong Kong operates under a “one country, two systems” framework which allows the territory to benefit from a certain degree of autonomy not seen on the mainland.
But since the 2014 pro-democracy protests, which saw tens of thousands of people marching through the streets and paralyzing parts of the financial center for weeks, Hong Kong has seen more and more protests against Chinese interference. This in turn prompted Beijing to harden its stance on dissent in the territory.
Hong Kong is still “clearly number one,” Feulner told CNBC’s Akiko Fujita on Squawk Box on Monday. “It’s the only country in the world to score over 90 on our index – a 100 being perfect – and it’s 90.2.”
“I mean here there is one country, two systems – Hong Kong number one, China 100,” Feulner said, stressing the territory’s independence from the mainland.
A general view shows residential and commercial buildings in the Kowloon district of Hong Kong.
Anthony Wallace | AFP | Getty Images
Despite China’s low ranking, Feulner noted, the country “did better” this year than the previous one – climbing to 100th place from 123rd last year.
The index ranks each country on the basis of four criteria: rule of law; the size of government, such as budget spending and tax burden; regulatory efficiency; and how open its financial and commercial markets are. Most of the data for the 2019 index was collected from the second half of 2017 to the first half of 2018.
When asked if China’s growing influence over Hong Kong could erode economic freedom in the territory, Feulner admitted that political pressure from Beijing is “something we are concerned about.”
Feulner also noted that the United States was “doing very well”, dropping from 18th place last year to 11th this year.
The world’s largest economy reversed its downward trend in 2018 and continued to improve due to deregulation and tax cuts, he said.