EIU Topples Hong Kong In Asian Rankings

by Mary Swire, Tax-News.com, Hong Kong

25 April 2002

The Economist Intelligence Unit (EIU) has published its annual rankings of locations for business, showing that Singapore has taken over from Hong Kong as having the best Asian environment for business, with Hong Kong falling globally from 5th to 11th among the 60 countries covered by the survey. The Netherlands tops the rankings.

Hong Kong led the Asian rankings from 1997 to 2001, but the EIU lists a number of factors which have caused it to downgrade the SAR's attractiveness, including:

• An erosion of political autonomy from the mainland;
• Continually worsening economic conditions and a substantial budget deficit;
• Concerns about cartels and favouritism by the Government; and
• Lack of skills among the work-force including the English language.

Chief Secretary Donald Tsang Yam-kuen attempted to downplay the survey, saying: "They may conduct their assessment based on the views of the media or some individuals. Sometimes they wear the spectacles of ideal models in the Western world. Their assessment may not be that correct."

The EIU's political concerns stemmed from the interference of Beijing in overturning a judgment by the Court of Final Appeal allowed many people born on the mainland to remain in the SAR. Many commentators said that the move undermined Hong Kong's judicial autonomy. Chief Executive Tung Chee-Hwa is also seen in many quarters as little more than Beijing's puppet.

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