Moody's change of Hong Kong's outlook lacks factual basis: HK financial secretary

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Travellers wait in lines to check in at Hong Kong International Airport in Hong Kong, south China, Aug. 15, 2019. [Photo/Xinhua]

The change of Hong Kong's rating outlook by Moody's Investors Service lacks factual basis, Paul Chan Mo-po, the financial secretary of the government of China's Hong Kong Special Administrative Region (HKSAR), said Monday.

The HKSAR government disagrees with Moody's in the change of the outlook. Moody's argument that recent social incidents may weaken Hong Kong's institutional competitive advantage "lacks factual basis", Chan said.

Moody's kept Hong Kong's Aa2 issuer rating but changed its outlook to negative from stable in a report issued earlier in the day.

Hong Kong's core competitiveness remains unaffected by recent social incidents. It remains a top global financial hub and one of the easiest places to do business in the world with free flow of capital, goods, information and talents, low taxes, sound regulation, rule of law, judicial independence and professional service of high quality, Chan said.

Even though recent protests have caught much attention, Hong Kong's financial market and banking system remain healthy without any significant capital outflow, he said.

Deepening economic cooperation with the mainland will keep driving Hong Kong's growth in the long run, especially its highly competitive service sector, Chan added.

Moody's also recognized Hong Kong's "minimal debt burden and large fiscal reserves" in its report, saying HKSAR has strong resilience to economic and financial shocks and the ability to address long-term structural challenges. 

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