On Wednesday, the Heritage Foundation, a conservative think tank in Washington, announced its annual ranking of the world’s freest economies and left the former British colony off the list.
The organization said it was counting the city, as well as Macao – another special Chinese administrative region – as part of China, following a change in its methodology which means the index will only rank independent countries where governments have sovereign control over economics policy. ‘
‘Both Hong Kong and Macao, as well as special administrative regions, undoubtedly enjoy economic policies that in many respects offer their citizens more economic freedom than are available to the average citizen of China, but developments in recent years have unequivocally shown that these policies ultimately is controlled by Beijing, ”the foundation’s researchers said in a statement.
Before last year, Hong Kong had dominated the list for more than a quarter of a century since its inception. But it was not put in place by Singapore in 2020, “mainly due to a decline in investment exemption for Hong Kong,” according to the Heritage Foundation.
Singapore remains the best economy on the list this year, followed by New Zealand, Australia, Switzerland and Ireland. China is in the bottom half, in 107th place out of 184 countries.
The top five countries ‘have achieved a very high economic freedom point of 80 or more’, researchers from the foundation wrote. The score is judged on several criteria, including how open the markets are in each area, how effective regulators are at encouraging business and labor freedom, and how strict the rule of law is to protect property rights.
Paul Chan, Hong Kong’s biggest financial official, blew up the Heritage Foundation for excluding the city from the index on Thursday.
“I do not agree that our economic policy has been taken over by the central government,” he said during a webinar hosted by the South China Morning Post. “It seems to me that when they came to that decision, it had to be clouded by their ideological tendency and political prejudice.”
A Hong Kong government spokesman said in a statement that the exclusion of the area from the ranking was “not justified or justified.” Hong Kong is a member of the World Trade Organization, the spokesman noted, concluding trade, tax and investment agreements as an individual economy.
“Hong Kong is and will always remain an open, secure, vibrant and pluralistic international financial and business hub, underpinned by economic freedom, the rule of law and judicial independence,” the spokesman added.
Hong Kong has long been seen as an important business hub connecting East and West. Even after the city’s handover of Britain to China in 1997, it retained its image as an international gateway to the continent for decades, aided by a promise by Beijing to maintain its semi-autonomous status.
Since 2019, however, experts have warned that its unique differences could be jeopardized as Chinese authorities try to take a firmer hand in Hong Kong affairs. That was when major protests erupted in the city over a divisive extradition bill, which eventually developed into a movement demanding full democracy. Unrest of the demonstrations at the time forced shops to close, disrupt public transport and hamper the city’s economic growth.
Last summer, Hong Kong faced another test when China passed a comprehensive national security measure for the city. The law prohibits sedition, secession and undermining of Beijing, and allows Chinese state security to operate in the area.
The move raised questions about whether the city’s reputation – and its ability to attract businesses – would be eroded. However, top local officials have argued that it helps the city restore calm and order.
Tensions between pro-democracy activists and authorities continue. Earlier this week, hundreds of protesters dared to protest outside a Hong Kong court, while 47 pro-democracy activists accused of undermining national law appeared.
There are also signs that the role of the city in international finance is changing. Hong Kong has become a popular spot for Chinese technology companies to list their shares in recent years, especially as tensions remain over Chinese companies trading in the United States.
Eric Cheung and CNN staff contributed to this report.
