HK faces downward rating pressures

Business | Kevin Xu 23 Jan 2020

Hong Kong's credit rating will face downward pressures over a one to two-year horizon, says Stephen Schwartz, head of sovereign ratings for Asia Pacific at Fitch Ratings.

"As a special administrative region, Hong Kong does enjoy a degree of autonomy over its economic affairs and governance. But over time, we've seen an increasing integration on both fronts - an economic integration and governance integration with some of its autonomy that we thought was very strong being eroded over time. An example of that is the mainland government being more vocal than in the past about Hong Kong affairs. So over time, one way to think about it is some degree of convergence of the rating of mainland China with that of higher-rated Hong Kong. We now have a two-notch separation and over time, that could convert further," he said.

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