According to the report, Hong Kong scored highly across all of the five categories which are used to calculate index scores, including size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor, and business.
Hong Kong has topped the Fraser Institute’s 141-country ranking every year for the past three decades. This year, Singapore, New Zealand, Switzerland, and Australia were placed after Hong Kong in the top five.
The United States experienced one of the largest drops in economic freedom, according to the report, falling to 10th place overall from sixth in 2010. Much of this decline is attributed to higher spending and borrowing on the part of the US government, and lower scores for legal structure and property rights.
“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life,” said Fred McMahon, vice-president of international policy research at the Fraser Institute, a Canadian public policy think tank.
Commenting on this year’s index results, Hong Kong Chief Executive Donald Tsang remarked that economic freedom was “part of Hong Kong’s DNA”.
“In such testing times, it is important for an externally-oriented economy such as Hong Kong to remain true to our philosophy. That means strong fiscal discipline, low taxes, open markets, free flow of information, goods and capital, clean government and a level playing field for business,” Tsang said in a speech September 20.
“The fact that we have held true to these beliefs for decades is no doubt one reason why Hong Kong has consistently ranked so highly in the league tables of economic freedom. As the old saying goes: ‘If it ain’t broke, don’t fix it.'”