Hands On or Hands Off?: The Nature and Process of Economic Policy in Hong Kong

2. Fretting over the Image: External Perceptions and Relations

2 Fretting over the Image: External Perceptions and Relations League tables Hong Kong brands itself as 'Asia's world city' and is much concerned with its image and reputation to the outside world. Sometimes this concern seems to verge on paranoia. Thus, the Hong Kong government takes great pride in having been in first place for more than ten years in the global league table of economic freedom produced by the Heritage Foundation, the US-based right-wing pressure group, and in having been ranked the world's freest economy for the past 35 years by the Cato Institute. Table 2.1 summarises rankings taken from those and a variety of other sources, not all of which are quite so flattering. Scores and league tables of this nature need to be viewed with a sizeable pinch of salt. Some, such as the Heritage Foundation's, are produced with a deliberate political agenda in mind. Others are rather narrowly focused in particular fields. All are open to debate as to the methodology. For example, the indicators used by the United Nations Conference on Trade and Development (UNCTAD) to assess inward investment perfornunce are likely to favour small highly open economies, while its measurement of the friendliness of the environment for such investment includes somewhat contentious indicators such as energy consumption and mobile phone penetration. The World Bank's governance indicators are constructed with painstaking thoroughness, but the authors are themselves the first to admit to significant margins of error (which they even quantify in the source documentation). The Global Entrepreneurship Monitor gauges entrepreneurship essentially according to the formation ofnew finns, thereby 14 Status and Image Table 2.1 A selection of rankings for Hong Kong Compilers and reference years Cato Institute & Fraser Institnte," 2004 Heritage Fonndation," 2006 World EconolTuc Fonun,· 2006 International Institute for Management Development (Lausanne),' 2006 Chinese Academy of Social Sciences," 2005-06 UNCTAD,f averages, 2003-05 2002-04 2003-05 World Dank,' 2006 World Bank." 2005 Indicator world's freest economy index of econolTnc freedolll overall global competitiveness growth conlpetitiveness business COlllpetitiveness world COll1petitiveness rankings urban cOlnpetitiveness anlong cities in greater China global competitiveness anlong econolllies performance of inward direct investment potential for inward direct investment performance of outward direct investment ease of doing business (prospectively in 2007) governance-related indicators voice and accountability' 'political stability' governnlent effectiveness 'regulatory quality' 'rule of law' 'control of corruption' Hong Kong's ranking 1st of 130 1st of 161 11th of 125 28th of 117 10th of 121 2ndof60 1st of200 11th of 100 3rd of 142 15th of 142 1st of 88 5th of 175 percentilc rank (()-100) across 213 economies 52.2 89.6 92.8 100.0 91.3 92.1 CLSA and Asia-Pacific & Asian Corporate Governance Association,' 2005 corporate governance in Asian economies 2nd of 10 Global Entrepreneurship Monitor/ 2004 (London Busi"css School aHd Babson College) Economist Intelligence Unit,' 2005 Mercer Human Resource Consulting,I 2006 UBS,m 2006 ECA International," 2005-06 total entrepreneurship activity quality of business environment desirability as business trip location cost of living, cities quality of living, cities cost of living, cities best city location in world for Asians best in world for west Europeans best in Asia for Asians Sources: Economic Freedom of the World, \vvvw.cato.org; www.frasennstltute.ca. h Index of economic fiTed0111, "\vww.heritage.org. 'Global Competitiveness Report 2006-200T, www.weforum.org. d 'IMD World Competitiveness Yearbook 2006', www.imd.ch. As reported by Xinhua news agency, 23 March 2006, w\vw.china.org.cn. t UNCTAD 'World Investment Report 2006', www.unctad.org. 32nd of 34 8th of82 39th of 127 4th of 144 68th of 350 27th of71 32nd of257 66th 5th g 'Doing business 2007: How to reform', World Bank Group, \V\vw.doingbusiness.org. h 'Worldwide Governance Indicators: 1996-2005', W\V\v.worldbank.org. www.acga-asia.org. www.gemconsortium.org. Ie 'Viewswire' for Hong Kong, www.viewswire.c0111; and 'The world in 2006', www.economist.c0111. I 'Cost of living survey' and 'Quality of living survey', Mercer Human Resource Consulting, www. mercerhr.com. m 'Prices and earnings: A comparison of purchasing power around the globe', 2006 edition, www. ubs.com; comparison based on western European consumption patterns. n Press release of 3 April 2006, www.eca-internationa1.com. Fretting over the Image 15 biasing towards less mature economIes or those experiencing profound structural change, while ignoring...