Despite the protests for months, the role of Hong Kong in global finance remains intact, says global credit rating agency Fitch Ratings, adding that there’s little evidence to suggest that such prolonged protests and social unrest have greatly affected the role.
However, the agency also maintained that these continual protests are weakening the perception of Hong Kong being a stable international business hub. It also fears that such a weaker view of Hong Kong’s governance can directly affect its credit rating in the long run.
Chinese-ruled Hong Kong has been facing wide demonstrations and protests for over six months now. The demonstrations were lit up by the controversial extradition bill, which has later been withdrawn due to the massive backlash. The violent protests now have transformed into a craving for greater democratic freedom.
And the protesters are now manifesting their demand for an end to Chinese meddling into the semi-autonomous regime, which formerly happened to be a British colony.
Earlier in September, following the protests, Fitch made a downgrade in the rating of the long-term foreign-currency issuer default of Hong Kong. The rating went down from “AA+” to “AA”.
Moreover, the protests began to take place in March amid fears within the locals that China is eroding the autonomy of Hong Kong, which was also granted by China when it was handed over in 1997 after 156 years of British rule.
Protesters believe that China is meddling into their affairs and crumbling their autonomy by exercising its influence and power. China, however, has denied the charge that they’re meddling and said that the issue of Hong Kong is an internal affair.
About the economy, Fitch remarked that while Hong Kong’s short-term view is facing a deterioration, the prospects of a longer term doesn’t seem negative. In its history of a decade, this is the first time Hong Kong’s economy is observing a recession.
Also, the businesses have been going under pressure due to the protests and the trade war between USA and China.The famous rating agency also added that the recent listing of Alibaba Group in the Hong Kong Stock Exchange clearly depicts Hong Kong’s role to be a “flagship offshore financing center” for companies of China.
On the matter of recent United States legislation supporting the protesters, Fitch remarked that it’s largely symbolic. It added that the alteration of international perceptions of Hong Kong could hinder its economy.