Business Hong Kong

Financial Sec. defends economy after Moody’s downgrades HK debt-outlook to ‘negative’

Hong Kong’s long-term debt and issuer ratings were downgraded by Moody’s on Saturday from “stable” to “negative”.

Risks to China’s economic stability and increasing political linkages weighing upon Hong Kong’s institutional strength were likely to undermine the city’s own financial outlook, the rating agency said.

Last Wednesday, Moody’s downgraded its outlook on China’s rising government debt to “negative” amid concerns over its falling reserves and capacity to roll out reforms.

john tsang

John Tsang. Photo: HKFP.

Hong Kong’s Financial Secretary John Tsang said that the city’s sound economic fundamentals, robust financial regulatory regime, resilient banking sector and strong fiscal position will continue to enable the economy to embrace the challenges ahead.

“Hong Kong is in a good position to benefit from the structural rebalancing in the Mainland’s economy from investment to consumption, as the increase in demand in services will create new business opportunities for a service-oriented economy like Hong Kong,” he said.

Tsang also said the One Country, Two Systems agreement had worked well and risks associated with mainland-related lending were manageable.

A government spokesperson added that Moody’s comments on political risks were “all purely speculative and subjective statements without any ground”.

Financial Sec. defends economy after Moody's downgrades HK debt-outlook to 'negative'