Gov't Rejects Credit Rating

The Government today disagreed with Moody’s Investors Service’s decision to change Hong Kong’s credit outlook from “stable” to “negative”.

Financial Secretary Paul Chan said Moody's decision was not founded on facts.

“We disagree with its decision to change Hong Kong’s credit outlook to ‘negative’ on the ground that the recent social incidents may have eroded Hong Kong’s institutional strength."

Mr Chan pointed out that Hong Kong’s financial markets and banking system have been functioning normally in the past few months, despite concerns over the social incidents.

He emphasised Hong Kong remains an international financial centre and the best place to do business, adding that the social incidents have not affected the city's core competitiveness.

He also rejected Moody’s concerns that closer links with the Mainland may affect Hong Kong’s legal and regulatory regime as well as policy effectiveness.

“We must point out that since Hong Kong’s return to the Motherland, the Basic Law has provided a strong safeguard to the ‘one country, two systems’ principle and the continued prosperity of the Hong Kong Special Administrative Region.

“Hong Kong’s deeper economic and financial ties with the Mainland of China are a positive driver for the city’s long-term development. China is one of the key sources of growth for the global economy."

Moody’s affirmed Hong Kong’s long-term issuer rating at “Aa2”, the third-highest rating, due to the city’s strong fiscal position and large foreign currency reserves.

“Hong Kong’s strong economic fundamentals and ample reserves enable us to navigate through the current challenges and ensure continued macroeconomic and financial system stability,” Mr Chan said.

“The HKSAR Government will make use of its considerable fiscal space to introduce measures to support the economy when needed.”