Hong Kong retains crown as world's freest economy for the 37th year

The city bested 116 other economies in international trade freedom and regulations.

Hong Kong retained its spot as the world’s freest economy, a position it has occupied for 37 years, according to the 2019 edition of Fraser Institute's Economic Freedom of the World report.

It was also the highest-rated economy in the 1950-1965 mark, Frasers Institute noted.

Also read: Hong Kong retains title as world's freest economy

Close regional competitor Singapore continues to occupy the second spot, topping both the credit market and business regulation subareas, followed by New Zealand, Switzerland and the United States of America.

Hong Kong topped both the freedom to trade internationally as well as regulation areas of the study index. It also achieved first place for both its credit market and labour market regulation subareas, even gaining a perfect score (10.0) for the former. It was also second for business regulations.

However, Frasers Institute warned that interference from China could threaten its long-held position.

“Whilst Hong Kong remains the most economically-free jurisdiction in the world, interference from China—including the violent crackdown on pro-democracy protests—severely threatens Hong Kong’s rule of law, which helps ensure equal freedom for all, and endangers Hong Kong’s top position,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute, in a press release.

Also read: Hong Kong economy may post 0% growth in 2019

In a statement, the Hong Kong government said that it “takes exception” on McMahon’s comments about the rule of law in Hong Kong, saying that “such comments are entirely ungrounded and not borne out by objective facts.”

“The robustness of Hong Kong’s rule of law is consistently reflected in the relevant reports of other international ranking institutions since 1997,” the government stated in a press release.

The study index measures the degree to which the policies and institutions of countries are supportive of economic freedom, according to the Frasers Institute. Its cornerstones are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property.

Five broad areas were measured in the study: “size of government”, which focuses on spending, taxation, and the size of government-controlled enterprises; “legal system and property rights” or the protection of persons and their rightfully acquired property; “sound money”, which refer to the nature of inflation and value of earned money; “freedom to trade internationally”; and “regulation”, divided into credit market, labour market, and business regulation.