Hong Kong Welcomes Another Ratings Upgrade

by Mary Swire, LawAndTax-News.com, Hong Kong

20 December 2010

The government has welcomed Standard & Poor's (S&P's) decision to upgrade Hong Kong's long-term foreign-currency and local-currency ratings to "AAA" from "AA+", with a "stable" outlook.

In a government press release, it was reported that S&P attributed the upgrade to Hong Kong's large net external creditor position, the government's accumulated fiscal reserves, and the above-average growth potential for a high income economy. S&P also noted that strong growth in Mainland China and the deepening economic and financial links between Hong Kong and the Mainland have boosted Hong Kong's short- and long-term growth prospects.

Hong Kong’s Financial Secretary, John C Tsang, welcomed S&P's upgrade of Hong Kong's sovereign ratings to its top “AAA” rating, the highest rating ever assigned to Hong Kong. "S&P's announcement, together with the recent upgrades of Hong Kong's sovereign ratings by Moody's and Fitch, is clear evidence of the international recognition of Hong Kong's underlying economic strength and financial resilience," he said.

At the same time, S&P also improved China’s long-term rating to “AA-“ from “A+”, noting its low public debt and strong foreign asset position, together with excellent economic growth expectations.

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