Singapore beat Hong Kong to top the list, while Switzerland, New Zealand and the US rounded out the rest of the top five spots.

(Sept 20): Hong Kong’s half-century reign as the world’s freest economy has ended, according to the most recent rankings compiled by a Canadian think tank that cited eroding judicial independence as one factor.

The Asian financial hub fell to second place in the Economic Freedom of the World Index for the first time since it began in 1970. The Fraser Institute report released Tuesday is based on data from 2021, and the organisation said the city’s ranking is expected to fall even further in the following years.

“Hong Kong’s recent turn is an example of how economic freedom is intimately connected with civil and political freedom,” said Matthew Mitchell, senior fellow at the Fraser Institute, in a press release.

Singapore beat Hong Kong to top the list, while Switzerland, New Zealand and the US rounded out the rest of the top five spots.

The Hong Kong government called the report’s claims on the city’s judiciary as “totally groundless and unsupported by objective evidence,” the South China Morning Post reported Wednesday. A representative for the Hong Kong government didn’t immediately respond to a request for comment.

Hong Kong’s slip in the report signals its struggle to maintain its reputation as a global financial centre, after years of pandemic isolation and political instability.

Part of Hong Kong’s longstanding appeal to international business is the reputation of its judicial system. They city’s courts are distinct from those in China, which are opaque in their actions and effectively controlled by the ruling Communist Party.

Since President Xi Jinping imposed a national security law on Hong Kong in June 2020 their independence has been called into question. Last month, Chief Executive John Lee fanned those concerns again when he said judges should have followed his wishes and banned a controversial protest song from the internet, due to its perceived threat to national security.

The UK decided last year to withdraw top judges from Hong Kong’s highest appeals court, saying China is using the national security law to undermine fundamental rights and freedoms in the former British colony.

The Biden administration in 2021 warned investors about the risks of doing business in Hong Kong, saying China’s push to exert more control over the financial hub threatens the rule of law and endangers employees and data.