By Serving-the-people Ox
The Fraser Institute issued the "Economic Freedom of the World: 2023 Annual Report" (EFW report) on 19 September 2023. Upon publication, some argue that Singapore supplanted Hong Kong's economic status. Their worry is, nevertheless, unnecessary. We should be critical of the EFW report, for the reasons below.
For the first time in the history of the EFW report, Singapore edged out Hong Kong for the number one in ranking. However, if we take a closer look at the report, the result is satisfactory. Very few people notice that Singapore gets 8.56 while Hong Kong obtains 8.55 in the overall scores, which means the difference is extremely minimal. Among the five assessment areas, Hong Kong ranks number one in "freedom to trade internationally", and third in "regulation". Compared with last year, Hong Kong's scores and rankings in "size of government" and "sound money" also improved. For details, readers can refer to pages 13 and 157. It is evident that Hong Kong continues to rank among the top.
Its less favorable performance is dragged by the so-called "military interference" to the judiciary and "integrity of the legal system"; yet, the Fraser Institute drew a large proportion of the data for these items from secondary or tertiary sources which were mostly collected from opinion surveys. The subjective scores do not objectively show the facts of Hong Kong's judiciary situation. Article 85 of the Basic Law stipulates that judicial independence in Hong Kong is protected. The appointment and removal of judges are free from political or other irrelevant considerations. Judges are immune from legal action when performing judicial functions. The public can access the courts' judgments with detailed reasoning on the website at any time.
The EFW report also highlights the implementation of national security law (NSL) and the so-called "political crackdown" in Hong Kong that affected the ratings. But this assessment is biased. National security is a matter within the purview of the central authorities. It is the responsibility and right of every country to safeguard its national security. Riots in 2019 and 2020 disrupted public order and business activities. Without the implementation of the NSL, the livelihood and economic activities of the Hong Kong community at large would not be resumed to normal. Law enforcement agencies have been taking actions based on evidence and strictly following the law regarding the acts of the persons or entities concerned, and have nothing to do with their political stance or background.
Over the years, Hong Kong's institutional strengths remained unscathed. The strengths include the continuation of the common law system, a simple and low tax system, world-class professional services, free flow of goods and factors of production, a favorable business environment with efficient and transparent markets, a regulatory regime in line with international rules, an efficient and clean government, and so on. Around 9,000 enterprises have selected Hong Kong as their primary business base. To attract more strategic enterprises and capital, the government has also implemented new measures to lure global talents and enterprises. Response to these measures has been very enthusiastic.
The city's competitiveness will be further bolstered, thanks to its proximity to Mainland China and connection to the world. There are 20 free trade agreements signed, primarily with ASEAN, EU member countries, and the United States. Its advantageous geographical location, in proximity to key markets in the region and within a 4-hour flight of Asia's major business cities, has yielded substantial business dividends. Hong Kong is also positioned to reap the benefits of the world economic trend, in particular the development opportunities brought by national strategies, including the Guangdong-Hong Kong-Macao Greater Bay Area development and the high-quality development of the Belt and Road Initiative.
In short, most of the accusations in the EFW Report do not hold water. Compared with other cities, Hong Kong possesses unique strengths that will be reinforced over time. We should view the EFW report objectively and be clear-minded toward eye-catching headlines.
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