Hong Kong's Economy Remains The World's Freest, Study Says

ByJohn S. McClenahen Although it's now a special economic zone within China, the former British Crown Colony of Hong Kong continues to have the freest economy in the world, says a just-released joint study by the Washington-based Heritage Foundation, a politically conservative think tank, and the Wall Street Journal, a unit of Dow Jones & Co. Inc., New York. In Hong Kong's favor are a minimum of government intervention (a point some other analysts dispute), supportive monetary policy, foreign-investment freedom, strong banking and finance institutions, and protected property rights, the study contends. Singapore, increasingly a high-tech manufacturing and telecommunications center, has the world's second freest economy, the study says. The U.S. ties for fifth with Luxembourg, behind Ireland (No. 3 in the rankings) and New Zealand (No. 4). The big negatives for the U.S. are high corporate and individual income-tax rates, the study asserts. Other economies ranked relatively high among the 155 surveyed are the UK (No. 7), the Netherlands (No. 8), and Australia, Bahrain, and Switzerland (tied for No. 9). Because of the ties for Nos. 5 and 9, there's no No. 6 or No. 10. The lowest ranked economy: North Korea. Heritage and the Journal did not rank Sierra Leone, Somalia, and four other African economies because of their economic and political instability.