Japan, S Korea share sustainable trade crownBusiness | Eurus Yiu 28 Oct 2020
Japan and South Korea are tied for the top spot in the Sustainable Trade Index 2020, while Hong Kong ranked first in the economic pillar, a survey by the Hinrich Foundation showed.
Japan and South Korea both received scores of 75.1 out of 100, placing them five points clear of Singapore in third place (70) and three other economies - Hong Kong, Taiwan and the US - in the high 60s. Singapore was number one in 2016 and Hong Kong in 2018. The United States and China are 6th and 7th due to the trade war, but separated by ten points.
The report stated that this year's economic pillar is by far the most tightly packed. The difference in scores between the top-ranked economy - Hong Kong at 69.1 - and the economy at the bottom - Laos at 44.6 - is just a little over 25 points.
Chris Clague, managing editor of The Economist Intelligence Unit, said Hong Kong's political instability would have knock-on effects for its economic sustainability.
The report pointed out that Hong Kong's presence atop the STI and many other indexes has come into jeopardy, especially over the past six months. It explained that the city's trade costs have been low not only because of its infrastructure and strategic location, but because of its political stability, integral to its position as an independent judiciary.
The report said that having "rubber-stamped" a new national security law in June, together with its poor response to the protests which had begun long before, indicates that at least political stability and an independent judiciary - along with a host of other characteristics - seem to be disappearing.
"There's zero confidence in Hong Kong government and not just about their economic abilities," says Jim Walker, chief economist at investment advisory firm Aletheia Capital. "So there's a real mood of concern and despondency that is going to be very difficult to turn around anytime soon."
Stephen Olson, research fellow of Hinrich Foundation, advised countries to avoid over-dependence on trade in the age of Covid and said political stability helps ensure public buy-in for pandemic policies.