HK still world's freest economy: Survey

HK still world's freest economy: Survey

Helen Luk, Associated Press, Hong Kong

Hong Kong remains the world's freest economy, but the Asia-
Pacific region overall became more tightly controlled
economically during the last year, according to a survey released
on Friday.

It was the 10th consecutive year that Hong Kong has topped the
annual survey by the Heritage Foundation and the Wall Street
Journal because of its low regulations and low taxes.

The Heritage Foundation, a U.S.-based conservative think tank,
said small, free economies like the Chinese territory of Hong
Kong offer a good example for poorer governments seeking to
improve their economies.

Small countries were prominent in the top ranks in the survey.
Southeast Asian city-state Singapore was ranked No. 2, followed
by New Zealand, Luxembourg and Ireland. The United States was
ranked 10th.

Overall, Asia-Pacific fared worse than the previous year, with
16 economies scoring lower and only 11 improving. The region has
six of the world's most controlled economies, including North
Korea, Laos and Burma, the survey said.

"This represents an unwelcome reversal of the trend reported
in the 2003 Index, which found economic freedom gaining in Asia,"
the foundation said in a statement.

The survey, which gauged the economies of 155 countries or
territories this year, ranked them according to 10 factors,
including trade policy, government intervention in the economy
and the size of the underground economy.

Nearly half, or 75 of the economies ranked, were freer than
the previous year. But 84 economies remained "mostly unfree" or
"repressed," the survey found.

Although Hong Kong has enjoyed Western-style freedoms since
returning to Chinese rule in 1997, it remains only partially
democratic. China treats its territory as a separate economy.

Mainland China slipped one place to 128th this year, scoring
worse in government intervention. The foundation said Chinese
leaders seemed to have slowed massive economic reforms and levied
new rules to hamper foreign investment in the retail sector.

Hugo Restall, editorial page editor at the Asian Wall Street
Journal, said Beijing's reluctance to allow Hong Kong to speed up
democratic reforms may spell trouble for the former British
colony's economic freedom.

On Wednesday, Hong Kong leader Tung Chee-hwa pledged to
consult the central Chinese government on political reforms - a
move that drew fire from opposition leaders, who accused him of
undermining Hong Kong's autonomy and ignoring growing calls for
full democracy.

Beijing said later in the day that it hopes to participate in
the discussion of reforms before Hong Kong works out the details.

A lack of political freedom "does tend to undermine the road
to economic freedom," Restall said. "Unless Beijing reconsiders
its approach, I have to say that I'm pessimistic that Hong Kong
will remain the world's freest economy."

The government did not immediately respond to Restall's
comment.