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.