Flying free as top spot for business (hktdc.com)


	(Left) Heritage Foundation President Dr Edwin Feulner presents Chief Executive Donald Tsang with a copy of the 2007 Index of Economic Freedom

2007 is off to a flying start with Hong Kong being ranked the world's freest economy for the 13th consecutive year, topping in four broad categories – trade, investment, financial freedom and property rights.

The Heritage Foundation, which gave top ranking to the city in its survey of 157 economies worldwide, also gave Hong Kong high marks in fiscal freedom, freedom from government, monetary freedom and labour.

"Hong Kong has become so successful being free, by not trying to redistribute income or protect its workers. If it goes down that path, it will lose points," said Tim Kane, Director of the Foundation's Centre for International Trade and Economics. "Countries that have tried to protect its workers have not grown as well as Hong Kong has; they're not as wealthy as Hong Kong is today. That's an important lesson to bear in mind."

IP protection

The foundation highlighted the fact that the judiciary was independent of politics, the city was virtually corruption-free, and it had an exemplary ability to protect property rights. Singapore and Australia ranked second and third respectively in the 2007 Index of Economic Freedom study.

Hong Kong has also maintained its leading position as the preferred destination for foreign direct investment (FDI). According to the UN's World Investment Report 2006, Hong Kong remains the second largest FDI recipient in Asia after the Chinese mainland, with FDI inflows valued at HK$261 billion (US$33.5 billion) in 2005.

Foreign companies continued to use Hong Kong as their preferred base for their operations in Asia. As at June 2006, there were 3,845 companies that were regional headquarters or regional offices.

FDI grows

Invest Hong Kong, the Government agency tasked with spearheading investment promotion, reported a year of steady growth. The agency assisted 246 overseas, Chinese mainland and Taiwan companies set up or expand operations in Hong Kong, up by 6 per cent over 2005, itself a record year. More than HK$10 billion was invested in Hong Kong by these companies last year.

InvestHK's Director-General of Investment Promotion Mike Rowse said investment was fairly evenly spread across all sectors with the consumer, retail and sourcing sectors accounting for 16 per cent of total investment. Europe accounted for 30 per cent of the investing companies, North America 25 per cent, and the Chinese mainland 17 per cent.

Record arrivals

Numbers were also up at the Hong Kong International Airport. The Airport Authority (AA) which manages HKIA said passenger numbers rose to a record 22.45 million last year, 9 per cent higher than 2005. It also handled a record 3.58 million tonnes of cargo, 5 per cent more than 2005. Aircraft movements rose 6 per cent to 280,490 trips.

"Hong Kong International Airport benefited from robust demand, fuelled by continued economic expansion in both Hong Kong and the mainland," said AA Chief Executive David Pang. "We saw solid growth in passenger volumes from SouthEast Asia and the mainland, and the outlook for 2007 remains positive."