World Economic Freedom Report: Hong Kong Drops From Top Position for the First Time

World Economic Freedom Report: Hong Kong Drops From Top Position for the First Time
In the latest World Economic Freedom Report, Hong Kong has dropped from the first position for the first time. Profile picture. weerasak saeku/shutterstock
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The Canadian think tank, the Fraser Institute, has released its latest World Economic Freedom Report. Out of 165 economies, Hong Kong has fallen from the top position for the first time, ranking second. The report states that Hong Kong’s latest score is 8.55, which has fallen by 0.4 points over the past two years, significantly worse than the global average decline. The report attributes Hong Kong’s decline mainly to the harsh new laws imposed by the Chinese Communist Party (CCP), the Hong Kong National Security Law, rather than just pandemic-related policies. It predicts further declines in Hong Kong’s future scores.

The report indicates that the CCP has introduced significant “thresholds,” restricted the employment of foreign labor, and increased the cost of doing business in Hong Kong, leading to a 0.25-point decline in the “regulation” component of Hong Kong’s score. Additionally, increased CCP military intervention in Hong Kong’s rule of law has undermined confidence in the independence and fairness of the Hong Kong judiciary, resulting in a 0.2-point decline in the “legal system and property rights” component.

The Decline in Hong Kong’s Freedom Rings Alarm Bells

The report emphasizes that the declining economic and other freedom scores in Hong Kong highlighted in recent reports have already raised alarm bells. It mentions that the Hong Kong National Security Law can impose a maximum sentence of life imprisonment and has led to arrests since its enactment. Hong Kong’s score has fallen from its peak of 9.19 in 2010 to a current score of 0.64 points lower, with 0.4 points of the decline occurring over the past two years, well exceeding the global average decline. The Fraser Institute believes this decline is primarily due to the CCP’s imposing new stringent laws on Hong Kong rather than just the government’s pandemic policies.