Freest economy: Heritage Foundation President Dr Edwin Feulner presents Chief Executive Donald Tsang with a copy of the 2007 Index of Economic Freedom.

Financial Secretary Henry Tang welcomes the Heritage Foundation's ranking of Hong Kong as the world's freest economy for the 13th consecutive year.

The encouraging news showed that Hong Kong's efforts in upholding a free market had been once again recognised and reaffirmed by the international community.

The Heritage Foundation released its 2007 Index of Economic Freedom study today. The study covered 157 economies worldwide by assessing 10 broad factors of economic freedom.

Hong Kong retained its position as the freest economy in the world, followed by Singapore and Australia.

Hong Kong was ranked first in four broad factors - trade, investment, financial freedom and property rights.

The city also ranked among the top 10 in another four areas, namely fiscal freedom, freedom from government, monetary freedom and labour.

The report said Hong Kong's income tax and corporate tax rates were extremely low, and overall taxation was relatively small as a percentage of GDP.

It also noted Hong Kong's simple business regulation and highly flexible labour market. Hong Kong was wide open to investment, it said, with virtually no restrictions on foreign capital.

The foundation complimented Hong Kong on being one of the world's leading financial centres, with an extensive banking and services industry that was transparent and regulated non-intrusively.

It highlighted the fact that the judiciary was independent of politics, the city was virtually corruption-free, and it had an exemplary ability to protect property rights.

The Government remained firmly committed to maintaining Hong Kong as a free economy, with maximum scope accorded to the private sector, the Financial Secretary said..

"We see the role of the Government as that of a facilitator. We provide a business-friendly environment where all firms can compete on a level playing field and establish an appropriate regulatory regime to ensure integrity and smooth functioning of a free market.

"We also have an irreplaceable role in interactions with other governments, for instance, on market access negotiations," Mr Tang said.

"We will study the report carefully and strive to preserve fervently those strong aspects of our economic freedom, while enhancing those other aspects where there is room for further improvement."