Hong Kong remains the world's freest economy, but its claim to that title is weakening because of a ballooning budget deficit and fears of more government intervention, according to a survey released yesterday.
It was the ninth straight year that Hong Kong has topped the annual study by the Heritage Foundation and the Wall Street Journal, which praised the territory's lack of trade barriers, low taxes and strong property rights.
But the gap with No. 2 Singapore is getting smaller, the authors said. Luxembourg and New Zealand tied for third in the survey, Ireland was fifth, and the US tied for sixth with Denmark and Estonia.
"The difference between No. 1 Hong Kong and No. 2 Singapore is closer than it's ever been before," said Edwin Feulner, president and chief executive of the Heritage Foundation, a Washington-based conservative think-tank.
The survey ranks countries according to 10 factors, including trade policy, government intervention in the economy and the size of the black economy.
A jump in public expenditure hurt Hong Kong's rating in terms of government intervention in the economy, while Singapore scored better due to a tax cut, foundation executives said.
The Hong Kong government took exception to the downgrade, releasing a statement saying it had an "important role" to play in enabling the market to work better.
"We disagree that such a role constitutes adverse intervention in the economy," the statement said, adding that the Hong Kong government is committed to tackle its fiscal deficit.
Feulner also expressed concern about a proposed anti-subversion law unveiled in September. The plan has drawn fire from critics who worry that the law will gradually erode Hong Kong's freedom of expression, a holdover from British colonial days before the city reverted to Chinese rule in 1997.
"One of our potential concerns is that if the implementing details include restrictions on the free flow of economic information, then that in fact could adversely impact on Hong Kong's economic future," Feulner said. "The devil is in the details."
The territory's security chief Regina Ip, however, dismissed the concern as groundless.
"I don't think there are really valid grounds for concern," she told reporters. "People have not been able to pinpoint specific aspects of our package which truly affects freedom of information."
Feulner told Dow Jones News-wires that he met with Financial Secretary Antony Leung to discuss Hong Kong's response to the territory's budget deficit, which stood at a record HK$70.8 billion (US$9.08 billion) at the end of September, halfway through the fiscal year.
"I think they know what they're up against," Feulner said of the meeting. "But there are some tough calls ahead in the near future."
China finished with the same score as last year but slipped six places to 127th. The foundation said China's accession into the WTO had not yet led to any substantial policy changes.
"In fact, in some sense, there's been some backsliding," said Gerald P. O'Driscoll, director of the foundation's center for international trade and economics.
"We've had a lot of complaints that suddenly it's become more difficult to export agricultural commodities into China," he said.
The report asserts that 74 out of 156 countries surveyed, or nearly half, are economically freer than before, despite a global economic downturn and instability ignited by the US-led war against terrorism.
But 85 of the countries rated remained "mostly unfree" or "repressed," with North Korea ranked the most economically repressed country in the world.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique