Hong Kong is nominally now under communist control, yet has a low income tax rate of 16%, a free market economy and limited government. This combined with its free trade port status makes it a reform model for the developing post-communist world.

It consistently tops the Reaganite Heritage Foundation’s Index of Economic Freedom. Judging by reports Vince Cable would love it here – at an off-the-record* post-budget briefing he gave to clients of pollsters ComRes, he lauded Nigel Lawson’s tax reforms and Ronald Reagan’s rolling back of big government. Vince was happily quoting Reagan’s dictum that the most chilling thing you can be told is “We’re from the government and we are here to help you.”

As George Osborne promises to stick to Gordon Brown’s tax and over-spend policies, maybe the most fertile political ground for the LibDems to stake out is to be liberal on economics rather than social democrat. The centre-right German Free Democrats and the Irish Progressive Democrats have been in government more often than not since the late 80s, despite being small liberal parties. Something to think about as we contemplate a hung parliament…

UPDATE : Have just discovered that the Hong Kong finance minister has now abolished all taxes on wine and beer. How refreshingly civilised…

They have also introduced Green tax cuts! Financial Secretary John Tsang also announced last month tax incentives for “Greener” vehicles and a concessionary profits tax reduction for capital expenditure on “Greener” machinery and equipment. Corporate taxes were also reduced this year 1% to 16.5%. Pay attention Osborne at the back.