Washington, Jan. 24 (CNA) Taiwan ranked 10th out of 180 countries in terms of economic freedom, placing ahead of Japan and South Korea, according to the 2019 Index of Economic Freedom released Thursday by the Heritage Foundation.
Taiwan's overall score was 77.3, an increase of 0.7 points from 2018, with improvements in labor freedom and monetary freedom outpacing declining scores for government integrity and the tax burden.
Taiwan is ranked 5th among 43 economies in the Asia-Pacific region, with its overall score above the regional and world averages.
A relatively well-developed commercial code and open-market policies that facilitate the flow of goods and capital have made small and medium-size enterprises the backbone of Taiwan's economic expansion, said the Heritage Foundation, a conservative public policy think tank based in Washington, D.C.
However, the foundation also said that to reduce dependence on China by increasing commerce with other Asian countries, Taiwan will need to increase competitiveness and openness by, for example, reducing the state's "strategic" involvement in the export sector and liberalizing regulation of the fragmented financial sector.
In response, Taiwan's National Development Council (NDC) said the government has since last year vigorously promoted programs to encourage Taiwanese businesses in China to return home and invest.
Taiwan also set up a window designated for Taiwanese companies in China, while integrating land, water, electricity, manpower, tax and funds policies, the NDC added.
To improve Taiwan's ranking in investment and financial freedom, the NDC said amendments to the Statute for Investment by Foreign Nationals and the Statute for Investment by Overseas Compatriots, which would remove more hurdles for foreigners and overseas compatriots seeking to invest in Taiwan, have been submitted to the Legislative Yuan for review.
Meanwhile, China's economic freedom score is 58.4, making its economy the 100th freest in the Index.
Despite still impressive growth rates, Beijing adopted looser economic policies in 2018 to mitigate mounting risks to future growth. China remains "mostly unfree," the foundation noted.
"The official ideology of 'Socialism with Chinese Characteristics' has chilled liberalization, heightened reliance on mercantilism, raised bureaucratic hurdles to trade and investment, weakened the rule of law, and strengthened resistance from vested interests that impede more dynamic economic development," it added.