Hong Kong ranks second globally in economic freedom, Fraser Institute report reveals

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19th September 2023 – (Hong Kong) Hong Kong maintains its position among the top-ranking countries in the Economic Freedom of the World 2023 Annual Report (2023 Report) published by the Fraser Institute, securing the second spot globally.

The 2023 Report evaluates five key areas, and Hong Kong continues to excel in “Freedom to trade internationally,” securing the top position. Additionally, it ranks third globally in the category of “Regulation.” Notably, Hong Kong has shown improvement in its scores and rankings for “Size of government” and “Sound money” compared to the previous year.

Responding to the report, a spokesperson for the Hong Kong Special Administrative Region (HKSAR) Government stated, “We have been dedicated to enhancing market efficiency and providing appropriate regulation for enterprises, leveraging the advantages of our free market system and ensuring an efficient, open, and fair business environment.”

Highlighting Hong Kong’s business-friendly environment, the spokesperson added, “Hong Kong is renowned as one of the world’s most liberal and business-friendly locations, accommodating nearly 9,000 Mainland and overseas companies. This is a testament to our unique institutional strengths under the ‘one country, two systems’ framework, including the continuation of the common law system, an independent judiciary, efficient and transparent markets, adherence to international rules, clean governance, a simple tax system, world-class professional services, and the free flow of goods, capital, and talent. Hong Kong remains the only place where the advantages of the global and China markets converge within a single economy. The Fraser Institute’s claims regarding new barriers, restrictions on foreign labour, and increased business costs imposed by the Mainland are factually incorrect. We strongly disagree with these baseless allegations and express our disappointment. There have been no changes to the labour policy in the HKSAR. While prioritizing local workers, the HKSAR Government has separate schemes for employers to import labour based on their specific needs, helping to supplement skills not readily available in the local labour market and sustain Hong Kong’s competitiveness and development. We continue to strive for Hong Kong to be an attractive destination for workers from around the world.”

The current term of the HKSAR Government has actively implemented strategies and measures to attract strategic enterprises, global talent, and international capital to Hong Kong. The response to these efforts has been highly enthusiastic. The government aims to consolidate and enhance Hong Kong’s position as an international financial centre, promote innovation and technology, increase land and housing supply, and explore new paths of development in areas such as the digital economy, green technology, green finance, and Web3. These endeavours aim to provide new impetus, expand capacity, and enhance Hong Kong’s competitiveness for sustained economic growth and high-quality development.

Under the “one country, two systems” framework, Hong Kong enjoys strong support from the Chinese government and maintains close connections with the world. With China’s commitment to two-way opening up and its sustained high-quality development, coupled with the eastward shift of global economic gravity, the Mainland and other fast-growing regional economies will remain major drivers of global economic growth and a source of business opportunities. Hong Kong is well-positioned to reap the benefits of these trends, particularly through national strategies such as the Guangdong-Hong Kong-Macao Greater Bay Area development and the Belt and Road Initiative’s high-quality development.

Addressing the report’s claims of “Mainland’s military interference on Hong Kong’s rule of law,” the spokesperson clarified, “Such arguments are completely fictitious and contrary to the facts. Under ‘one country, two systems,’ Hong Kong enjoys a high degree of autonomy, and its rule of law is not subject to military interference. The Basic Law clearly stipulates that military forces stationed by the Central People’s Government in the HKSAR for defence shall not interfere in the Region’s local affairs. Members of the Garrison are bound by the laws of the HKSAR and national laws. Likewise, the Hong Kong Garrison is prohibited from interfering in the local affairs of Hong Kong, as stated in the Garrison Law.”

Regarding concerns raised about the erosion of confidence in judicial independence and impartiality, the spokesperson emphasized, “Hong Kong’s legal and judicial system has always been highly regarded internationally. The Constitution and the Basic Law provide constitutional guarantees for fundamental rights and freedoms, including equality before the law, supported by the rule of law and independent judicial power. The Basic Law clearly states that the courts of the HKSAR exercise judicial power independently, free from interference. Judges enjoy immunity from legal action in the performance of their judicial functions. The appointment and removal of judges in Hong Kong are free from political or irrelevant considerations. Court judgments contain detailed reasoning and are publicly available on the Judiciary’s website, ensuring transparency. Equality before the law is a fundamental principle observed in Hong Kong. Allegations against the independence and impartiality of our judiciary are baseless and lack objective evidence.”

Regarding the implementation of the Hong Kong National Security Law (NSL), the spokesperson reaffirmed, “National security falls within the purview of the Central Authorities and is an essential element of sovereignty. The National Security Law is crucial for safeguarding national security and ensuring the long-term stability and prosperity of Hong Kong. The law targets a small number of acts and activities that endanger national security while protecting the rights and freedoms of the vast majority of Hong Kong residents. Since the implementation of the NSL, Hong Kong has regained stability, and the rule of law, social order, and people’s rights and freedoms have been effectively protected.”