HK is No. 1!: Chief Executive Tung Chee Hwa receives the report from Heritage Foundation President Ed Feulner.

Hong Kong has been ranked the freest economy in the world for the 10th consecutive year in the Heritage Foundation's 2004 Index of Economic Freedom.

Financial Secretary Henry Tang said he was pleased to see that Hong Kong remained the freest economy in the world. The Government, he said, is firmly committed to maintaining Hong Kong as a free market economy that accords maximum scope to the private sector.

"We see the role of the Government as that of a facilitator that provides a business-friendly environment where all firms can compete on a level-playing field," Mr Tang said.

"The Government will also maintain an appropriate regulatory regime to ensure the integrity and smooth functioning of a free market.

Hong Kong's strengths as cited by the Heritage Foundation are: 

*duty-free port;

*very low level of government involvement in business activities;

*very low inflation;

*very low barriers to foreign investment;

*very low level of restrictions in banking and finance;

*low level of intervention in wages and prices;

*strong property rights;

*very low level of regulation; and

*low level of informal market activity

"We will spare no effort in preserving our strengths and in further improving ourselves where we can," Mr Tang added.

As in previous years, the Index ratings reflect an analysis of 50 different economic variables, grouped into 10 categories:

* banking and finance;

* capital flows and foreign investment;

* monetary policy;

* fiscal burden of government;

* trade policy;

* wages and prices;

* government intervention in the economy;

* property rights;

* regulation; and

* informal (or black) market activity.

This year, 161 economies were rated one to five in each category, one being the best, five the worst. These ratings were then averaged to produce the overall Index score.

Hong Kong scored 1.34 - an improvement over last year's winning score of 1.44. Singapore, in second place, scored 1.61, the same as a year ago. Third-ranked New Zealand scored 1.7, up from the 1.68 it scored in 2003.

"Once again, Hong Kong is the poster country for economic freedom, both in the region and around the world," the report says. "With a duty-free port, Hong Kong is a model for free trade. It also is the world��s 10th largest trading entity. Likewise, as the world��s second freest country, Singapore has a weighted average tariff rate of approximately 0 percent.

"Singapore has a high level of government intervention in the economy and a moderate cost of government; Hong Kong has a low level of government intervention in the economy and a low cost of government. In fact, Hong Kong��s government intervention score improved this year."