Did the
Heritage Foundation ever send its experts into the streets of Hong Kong to meet
ordinary people and ask them how free the city's economy has become in recent
years?
The
right-wing US think tank ranked Hong Kong the world's freest economy for the
20th consecutive year last week, but many expatriates and locals in the city
are taking the survey result as a bit of a joke.
There are a
tonne of examples we could use to tell the Heritage Foundation the real story
of Hong Kong's so-called
"free economy".
The
government has tightened its control on many sectors, from the old-fashioned
property business to broadcasting services in the digital era.
Chief
Executive Leung Chun-ying's stance on Hong Kong Television Network's
free-to-air licence saga is a sign of how things have changed in a society that
had been proud of its economic freedom for years.
In Hong
Kong, Leung effectively said, the Executive Council led by the chief executive
has the ultimate say on a lot of things, and we don't need to explain
everything in detail to you. In other words, listen to us rather than the
public or market demand.
In the
property business, the interests of developers, buyers and sellers have been
significantly affected by the government's new tax policies.
At a recent
business forum, Shan Weijian, a professor-turned-private-equity-tycoon, asked
the government: "Regarding the new 'hot policy' on properties, does New
York or London have such policies? New York and London are both financial
centres [that need] to attract talent, too. Their attitude is very open."
The
"hot policy" mentioned by Shan, an influential businessman on Wall
Street and the mainland, refers to the additional tax non-permanent residents
of Hong Kong must pay when buying a property in the city. The measure is widely
considered as a move by Leung to boost his popularity.
A few days
after the Heritage Foundation released its global ranking, the Economist group's advisory
service unit for senior corporate executives issued a warning on the
outlook for Hong Kong's business. It said the city was "at serious risk of
losing its position as a pivotal business centre in Asia".
Meanwhile,
the mainland was becoming a standalone business region for many multinationals,
the Economist survey found.
Yes, Hong
Kong is still the regional headquarters of many Fortune 500 firms, but the
growth trend looks weak.
Pressure and
competition for Hong Kong is coming not just from the north. The Heritage
Foundation noted the growing challenge from Singapore.
While Hong
Kong's overall score in the ranking, 90.1, rose 0.8 point year on year,
Singapore's added 1.4 points to 89.4. It seems only a matter of time before
Singapore is the new king of the free market.
If the late
economist Milton Friedman, who once praised Hong Kong as a model of a free
economy, could revisit the city, would he be disappointed?
Or perhaps,
as I hear more and more from friends around me, is Hong Kong just destined to
see its fortunes wane?
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