Moody’s cut Hong Kong’s credit rating by one notch to Aa3 yesterday. The ratings agency also changed the outlook to “stable” from “negative.” In a statement, Moody’s said “the absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed.”
Protests in Hong Kong has now lasted for more than seven months. The first demand was met with the China extradition bill withdrawn after months of protests. Yet, there was no clear measures to address the rest of the “five demands” of the protesters. In particular, the government continuously refused to set up a commission of enquiry on policy brutality and corruption. In the meantime, there is increasing call for an independent and international inquiry into the Hong Kong police.
In response to Moody’s downgrade, the HKSAR government 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 HKSAR 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”.
