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FS disagrees with rating decision

September 22, 2017

Financial Secretary Paul Chan says he does not agree with S&P Global Ratings' decision to lower Hong Kong's credit rating following a similar action on the Mainland's rating.

 

In a statement today, he said he disagrees with S&P's assessment that the Mainland's credit growth has increased economic and financial risks, and that Hong Kong may be correspondingly affected.

 

"Mainland China's credit growth has shown signs of moderating. The increase in the overall debt to GDP ratio has slowed down, with corporate and government debt to GDP ratios stabilising. Shadow banking activities have receded thanks to tightened supervision by regulators," he said.

 

He added Hong Kong has built up robust markets and strong regulations over the years to safeguard against any spillover risk from Mainland China.

 

"As the second largest economy in the world, Mainland China will continue to be a key source of growth for the world," Mr Chan said, noting the multitude of cross-boundary investment channels with the Mainland will enhance Hong Kong's two-way platform for overseas investors seeking to tap into the Mainland markets and for Mainland enterprises going global.

 

"Hong Kong is also well positioned to take advantage of the implementation of the Belt & Road Initiative."

 

The statement highlighted Hong Kong's fiscal and financial strength, saying its strong economic growth prospects, sizeable fiscal reserves, strong external position and credibility in monetary policy are acknowledged by S&P.

 

"Our banking system remains healthy as banks in Hong Kong have a strong capital base, sound liquidity management and healthy asset quality," Mr Chan added.



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