The fifth annual ranking of the ‘Best Countries for Business’ by Forbes financial magazine has placed Hong Kong in the second spot after Denmark and ahead of developed economies such as US, UK, Australia, New Zealand, Canada, and Singapore. The rankings compared 128 economies across 11 parameters including property rights, technology, corruption, red tape, investor protection, stock market performance, trade freedom, monetary freedom, personal freedom, tax burden, and market performance.

A quick analysis of Hong Kong’s rankings in the 11 pillars indicates that the economy’s strengths lie in its trade freedom, taxes, investor protection and monetary freedom. It also scored high on technology and lack of corruption.

While Hong Kong climbed up the ranks from its previously held ninth position to the second spot, the US was displaced from its secure second rank to the ninth spot. In contrast to Hong Kong, the US scored low on trade freedom, tax burden, market performance, and monetary freedom.

It is evident that it no longer makes sense for businesses to expand in the West, given that the western economies are imposing higher taxes, tightening their credit standards and enforcing stricter regulations for doing business. On the other hand, Asia has proved to be more resilient to the crisis and is roaring ahead on the path to economic recovery. Asia’s stronger than expected economic recovery fueled by a resurgence in its exports and a large domestic consumer market has ramped up its GDP. For instance, Hong Kong’s GDP alone grew by 7.2% in the first half of 2010 over a year earlier. Furthermore, business confidence has been rising since the beginning of this year. As a result, an increasing number of foreign businesses, entrepreneurs and investors are now turning to Asia, more specifically Hong Kong to invest, establish, and expand their business.

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With a population of about 7.00 million in mid- 2009, is a small but dynamic city which has earned an international reputation as a leading commercial and financial centre as well as a highly efficient entrepot. Hong Kong has also seen a rapid expansion of its services sector in the past two decades, contributing up to 92 per cent of Hong Kong’s Gross Domestic Product (GDP) in recent years.

The Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China (PRC) was established on July 1, 1997. Under the principle of “One Country, Two Systems”, Hong Kong’s previous capitalist system and way of life shall remain unchanged for 50 years and the HKSAR will be run by Hong Kong people. The HKSAR enjoys a high degree of autonomy except for the foreign and defence affairs.

The Chief Executive (CE) is the head of the HKSAR. According to the Basic Law, the CE shall be selected by election or through consultations held in Hong Kong, and be appointed by the Central People’s Government. At present, the Election Committee which is responsible for selecting the CE is composed of 800 members. Most members of the Election Committee are returned by election.

The success of Hong Kong as a leading trade, finance and business centre stems from a policy of free enterprise and trade, industrious workforce, well-developed infrastructure and excellent telecommunications. Over the past 20 years, the Hong Kong’s GDP has grown by an average annual rate of 3.8 per cent per annum in real terms. In 2009, GDP at current
market prices amounted to $1,633.5 billion, while per capita GDP has reached $233,239.

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