Chinese autonomous region loses 20-year title following ongoing political, social turmoil, says think tank
Hong Kong has lost its top slot among free economies, a new report by a Washington-based think tank said on Tuesday.
According to the 2020 Index of Economic Freedom by the Heritage Foundation, the Chinese autonomous region dropped to the position of “2nd freest” economy after months of anti-government protests that lasted until the recent outbreak of the novel coronavirus, bringing the city down to a score of 89.1.
“Its overall score has decreased by 1.1 points due primarily to a decline in the investment freedom score,” said the report.
The economy of Hong Kong, which was handed over to China by the U.K. in 1998 and has remained what Beijing calls a Special Autonomous Region, was “rated the freest in the world from 1995 through 2019.”
“The ongoing political and social turmoil has begun to erode its reputation as one of the best locations from which to do business, dampening investment inflows,” according to the report.
Hong Kong was overtaken by Singapore, where the economic freedom score remained unchanged at 89.4, making it the world’s freest economy in 2020, the report added.
The foundation pointed out that Hong Kong had experienced a recession last year after steady GDP growth over the past five years.
Its market-driven economy has become increasingly integrated with the mainland China through trade, tourism, and financial links, it added, warning: “Risks to Hong Kong’s economic freedom have grown correspondingly.”
Protests against the administration of Chief Executive Carrie Lam started in early 2019, triggered by Lam’s move to legalize extradition of convicts to mainland China.
After protests persisted, Lam withdrew the bill but protestors did not clear Hong Kong roads until the deadly coronavirus outbreak last December. There are at least 157 confirmed cases of the deadly infection in the region.
COVID-19 emerged in Wuhan, China last December, and has spread to at least 152 countries and territories. The World Health Organization has declared the outbreak a pandemic.
Out of 188,000 confirmed cases, the death toll now exceeds 7,400, while over 80,800 patients have recovered, according to Worldometer, a website that compiles new case numbers.
The current number of active cases is more than 100,000 — 93% mild and 7% in critical condition.