Hong Kong has lost its status as the world's freest economy for the first time in 25 years as a top business survey said the "investment freedom" in the city has dipped.
The Heritage Foundation, which had ranked the SAR as the best place to do business in the world from 1995, cited the social unrest and exposure to the mainland as reasons for a drop in the territory's overall score.
"Its overall score has decreased by 1.1 points due primarily to a decline in the investment freedom score," the foundation said in its Index of Economic Freedom report.
"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," the conservative research institution based in Washington said.
It said Hong Kong’s traditionally open and market-driven economy has "become increasingly integrated with the mainland through trade, tourism, and financial links".
It said the "risks to Hong Kong’s economic freedom have grown correspondingly".
The foundation's latest report also said the "independence of Hong Kong’s judicial system was seriously imperilled in 2019 by a government proposal for an extradition law (since withdrawn) that could have permitted political dissidents to be arrested and transferred to the mainland".
The report also noted that though corruption is generally low, "Hong Kong residents perceive the government as lagging in the fight against corruption".
But the report hailed Hong Kong as a dynamic global financial centre with a high degree of competitiveness and openness. But warned that the "sense of risk is also heightened".
Singapore is now the world's freest economy although its overall score remained unchanged from a year ago at 89.4.
HK loses tag as top spot for business after 25 years
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