Home / Business

Can Hong Kong afford a credit rating cut?

By Oswald Chan | China Daily | Updated: 2014-09-04 07:35

Can Hong Kong afford a credit rating cut?

Financial analysts warn that if a downgrading occurs, it will erode the SAR's economic competitiveness, reports Oswald Chan.

In its latest credit rating report on Hong Kong, Standard & Poor's Financial Services LLC said that "although the political polarization surrounding Hong Kong's (chief executive) election reform has sometimes made decision-making in the Legislative Council lengthier and more contentious than before, in our base-case scenario, we do not expect the tension to significantly affect the effectiveness of governance, given the government's strong record and the likely pragmatic approach of most politicians".

However, the global credit ratings agency said: "We could lower the ratings if Hong Kong's political polarization becomes much worse than we expected and significantly compromises policymaking (decisions) and the business environment. The issue of political polarization could amplify external risk if volatility in global financial markets increases sharply."

Can Hong Kong afford a credit rating cut?

Today's Top News

Editor's picks

Most Viewed