Hong Kong Economic and Trade Office, San Francisco
Hong Kong
Gov't rejects credit rating

The Hong Kong Special Administrative Region Government expressed deep disappointment with Moody's Investors Service’s decision to downgrade Hong Kong's credit rating.

Moody’s downgraded Hong Kong's long-term issuer rating to Aa3 from Aa2 and changed the city’s credit outlook to stable from negative.

In a statement on January 21, the Hong Kong SAR Government strongly disagreed with the rating company's assessment of Hong Kong's current situation. 

Since the city’s return to the Motherland, the Hong Kong SAR Government has been implementing “one country, two systems”, “Hong Kong people administering Hong Kong” with a high degree of autonomy in strict accordance with the Basic Law, it said.

Although Hong Kong has faced the most severe social unrest since its return to the Motherland in the past seven months or so, the Hong Kong SAR Government, with the staunch support of the Central Government, has firmly upheld the “one country, two systems” principle and handled the situation in accordance with the law to curb violence on its own to restore social order as soon as possible, the statement said.

The persistent social unrest shows that there are deep-seated problems in society, the Hong Kong SAR Government said, adding that it will conduct an independent review on it soon.

On the financial front, the Government said the rating falls way out of line with the city's sound credit fundamentals.

It pointed out that Hong Kong’s fiscal performance and external positions have long been amongst top-rated economies and act as a strong buffer for the city to withstand shocks.
  
Confidence in the Linked Exchange Rate System has remained strong, it said, adding that banks are well-cushioned and capital markets have had a good run in the past year with initial public offerings and bond financing activities continuing to thrive.

The statement also noted that the Government has been proactively handling social issues that Hong Kong is facing, including wealth inequality and an ageing population.

On people’s livelihood, the Chief Executive's Policy Addresses over the last three years announced initiatives to help the underprivileged, including various social security schemes with cash allowances and welfare services for those in need.

Regarding the issue of an ageing population, the Chief Executive has announced major improvements to the Higher Old Age Living Allowance by substantially increasing the standardized asset limit of the payment to benefit more seniors.

On housing, the Government strives to increase land supply through short to long-term means and manages demand when necessary to minimize adverse consequences that may arise from an overheated market.

To meet housing needs, the Government has increased the ratio of public housing from 60% to 70%, introduced a starter home scheme for middle-income families and delinked the sale prices of subsidized flats from market prices.

The statement added that the Government will continue to humbly listen to members of the public, overcome these challenges and help relaunch Hong Kong.

 


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