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Bush Institute Hosts Hong Kong Government Economists
On June 14, the Bush Institute had the pleasure to welcome two senior economists from the Hong Kong government, Helen Chan and Eric Shum, for a discussion about the structure and condition of the Hong Kong economy. During the course of our visit, we came to realize that the main ingredient necessary to create a highly competitive economy might simply be economic freedom.
Despite lacking natural resources or a robust manufacturing sector, Hong Kong has achieved one of the world’s ten highest levels of GDP per capita. Even though the economy is 93% service-based, it has grown at a 3.7% compound annual rate over the past 5 years, and the current unemployment rate rests at just 3.4%. This densely populated territory of a little over 7 million people has become one of the world’s leading business, financial, and trade hubs by combining a high level of market openness with low taxation, fiscal discipline, regulatory efficiency, rule of law, and limited government interference in the free market.
Hong Kong levies no tariffs on imported goods, and neither corporations nor individuals pay tax rates higher than 17%. Public debt is virtually nonexistent, and the government consistently maintains budget surpluses despite providing subsidized healthcare, education, and public housing for its people. Even though government spending as a percentage of GDP is relatively small in Hong Kong, the regulation that does exist is sufficient and highly effective. Corruption is prosecuted fiercely, and private property rights are well defined and protected. Not a single bank failed or called upon government support in Hong Kong as a result of the worldwide financial crisis of 2007-2009, due in large part to careful oversight that had already been enacted before the crisis.
Hong Kong’s ranking in the Bush Institute Competitiveness Scorecard solidifies its status as one of the world’s most free and competitive economies. Since 2007, Hong Kong has received the highest grade of A+ in each of the annual Scorecard rankings. Hong Kong particularly shines in measures of business environment, investment environment, and trade environment, with average percentiles scores in 2015 of 95.6, 94.1, and 99 respectively. Two of the four indices that contribute to the Bush Institute Competitiveness Scorecard, the Fraser Institute Economic Freedom of the World index and the Wall Street Journal/Heritage Index of Economic Freedom, currently rank Hong Kong as the world’s freest economy.
Undoubtedly, one of Hong Kong’s principal economic advantages is its close proximity to Mainland China. However, above all else, Hong Kong has become one of the most developed and competitive economies in the world because of its commitment to preserving an economy where labor, capital, and goods move freely, and individuals and businesses are free to choose, work, consume, trade, invest, and compete in any way they see fit.
Hong Kong’s prosperity serves as a reminder to North America and the rest of the world that fiscal discipline, regulatory efficiency, and freedom to trade internationally are the pillars of a resilient and competitive economy.
Nicholas Saliba is a consultant for the George W. Bush Institute and a Fellow with the Maguire Energy Institute in the Cox School of Business at Southern Methodist University in Dallas, Texas. He graduated Magna Cum Laude with Honors from Southern Methodist University in May 2014, receiving a B.B.A. in Finance, B.S. in Economics with Financial Applications, and B.A. in Public Policy. He also received minors in History and Political Science, along with a concentration in Energy Management.
Mr. Saliba has been a writer and researcher for the 4% Growth Project, the North America Scorecard Project, and the North America Working Groups of the George W. Bush Institute. He has co-authored numerous studies, and spoken on issues pertaining to finance, economics, and public policy in the energy sector. In 2013, Mr. Saliba was the co-author of the book "The Energy Logjam: Removing Regulatory Obstacles to Fuel the Economy," published by the George W. Bush Institute. Additionally, he has consulted on issues pertaining to energy, economics, and public policy for organizations including Consumer Energy Alliance, Texas Education Service Centers, D Magazine, Bracewell & Giuliani LLP, the Ohio Oil & Gas Association, and Energy Future Holdings.
Mr. Saliba is a member of Delta Sigma Pi Professional Business Fraternity, Omicron Delta Epsilon International Honor Society in Economics, and Phi Beta Kappa.
To explore and learn more about the Bush Institute North America Competitiveness Scorecard, visit http://www.bushcenter.org/scorecard/.
TARIFF-IED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
How Trade Spreads Holiday Cheer
It is projected that the average American household will spend more than $1,000 during the holidays this year.
Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.