Hong Kong remains the world's freest economy, according to the newly released Economic Freedom of the World: 2004 Annual Report.

Published by the US' Cato Institute in conjunction with Canada's Fraser Institute and 57 other international research bodies, the report compared the level of economic freedom in 123 economies.

Financial Secretary Henry Tang, who is in New York, welcomed the report.

"I am pleased Hong Kong has been topping the world's freest economy list since the index of economic freedom was first published in 1996," he said.

"A free market economy is the bedrock of Hong Kong's success. The Government will continue to create the best possible environment for business and to facilitate the market's operation and promote its development.

"In this regard, the Government will strive to maintain our institutional strengths, including the rule of law, the free flow of capital and information, a level playing field, an efficient and corruption-free Government as well as a simple and low tax regime," Mr Tang said.

Apart from the overall top ranking, Hong Kong also ranks first in the aspects of size of government, freedom to trade internationally, and regulation of credit, labour and business.