MONTREAL, Nov. 19, 2013 /CNW Telbec/ - In just a few decades, Hong Kong
has hoisted itself up among the wealthiest economies in the world. A
veritable doorway to China and the rest of Asia for foreign investors,
it owes its success to the application of the basic principles of
capitalism, says the Montreal Economic Institute (MEI) in a new Economic Note published today.
"To extricate themselves from debt, leaders all around the world are
desperately trying to stimulate growth. To do so, they should take
inspiration from the example of Hong Kong, which has steadfastly relied
on economic freedom for 50 years," suggests Jean-François Minardi,
public policy analyst at the MEI and author of the Note entitled "Hong Kong: The Ongoing Economic Miracle."
The freest economy in the world since 1970 according to the Fraser
Institute, Hong Kong clearly distinguishes itself from other markets
with a low flat income tax rate of 15%, a low level of government
spending at just 19.2% (compared to 42.9% for Canada) and the absence
of a sales tax, dividend tax or capital gains tax. In addition, Hong
Kong levies no customs duties and imposes no quotas. There are no
restrictions on the inflow or repatriation of capital, on the
conversion or transfer of profits or dividends from direct investment,
or on foreign ownership.
"By applying the broad classical principles of the free market—economic
freedom, a non-interventionist state and openness to trade—Hong Kong
has clearly shown not only that capitalism works, but that it remains
far and away the best formula for creating wealth," explains Mr.
Hong Kong has achieved remarkable economic successes. Although
completely devastated following the Japanese occupation that ended in
1945, Hong Kong lifted itself back up from 1950 to 1970 by betting on
exports and, starting in the 1980s, on services, commerce with mainland
China helping. Between 1961 and 2009, GDP per capita was multiplied by
nine, reaching 13th place in the world. Hong Kong has also become the third largest
financial centre in the world after New York and London.
According to MEI President Michel Kelly-Gagnon, "Hong Kong is a model to
emulate, and without necessarily expecting our political leaders to go
as far in liberalizing the economy, they should at least strive toward
this ideal. As for Canadian exporters and investors, the good news is
that Hong Kong remains a first rate doorway to developing the Asian
The Economic Note entitled "Hong Kong: The Ongoing Economic Miracle" was prepared by
Jean-François Minardi, public policy analyst at the MEI. This
publication is available at http://www.iedm.org/e.
The Montreal Economic Institute is an independent, non-partisan,
not-for-profit research and educational organization. Through its
publications and conferences, the MEI stimulates debate on public
policies in Quebec and across Canada by proposing wealth-creating
reforms based on market mechanisms.
SOURCE: Montreal Economic Institute
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