The Hong Kong Special Administrative Region Government welcomed Standard & Poor’s (S&P’s) decision to upgrade Hong Kong’s ratings outlook to “Positive” from “Stable”. The agency also affirmed Hong Kong’s credit ratings at “AA”.

According to S&P, Hong Kong’s economic strength, the government’s large net creditor position, and Hong Kong’s large net external creditor position are the key strengths of its credit quality. Recent improvements to Hong Kong’s fiscal position, particularly the discipline shown by the administration in controlling expenditure, have further reinforced this support.

S&P also noted that as a Special Administrative Region of the People’s Republic of China, Hong Kong enjoys a large degree of autonomy over domestic policy, international economic relations, and external trade and investment affairs, which are enshrined in the Basic Law.

Welcoming the news, the Financial Secretary, Mr. John C. Tsang, said the upgrade reflected international recognition of Hong Kong’s strong economic fundamentals.

“We are committed to further strengthening Hong Kong’s public finances with our usual prudence and discipline,” said Mr. Tsang.

“On the external front, we remain vigilant in guarding against sudden shocks. We will also continue to work with the Mainland authorities to develop further proposals to capture the tremendous potential arising from the Mainland market,” he added.

S&P last upgraded Hong Kong’s long-term foreign-currency and local-currency sovereign ratings to “AA” from “AA-” in July 2006, with a “Stable” outlook.