HONG KONG: Hong Kong’s credit rating could be at risk after the success of a new generation of young anti-China politicians in legislative elections this month, Moody’s warned.
The first poll since mass “Umbrella Movement” protests against Beijing two years ago saw the election of five lawmakers backing independence or self-determination to the Legislative Council (LegCo).
But Moody’s said the city’s Aa1 rating, the agency’s second highest, could be in trouble if the increased ranks of opposition politicians slow down policymaking.
“With these results, filibustering, which has become increasingly common in the past two years, is likely to continue, a credit-negative development that will result in slow and less effective policymaking,” it said in a report published Monday.
It also said it expects the political divide to widen in the near future.
“In this environment, political friction is likely to continue and may intensify ahead of the chief executive election in March 2017,” it said of the city’s leadership election.
Financial secretary John Tsang said Tuesday the ratings agency should be “fair” to the city.
“If they know the situation better, then maybe they will know whether or not it will truly affect the overall economy or the workings of the government,” Tsang said.
Moody’s in March downgraded the city’s outlook from “stable” to “negative”, citing increasing political riskiness and closer economic ties with China, which is facing a growth slowdown.
The democratic camp including independence activists gained three seats in the 70-strong LegCo at the September 4 poll. That gives them the 30 members needed to veto key bills, which can only be passed with a two-thirds majority.
However, the overall make-up of the LegCo remains weighted towards Beijing under a system that makes it almost impossible for the democracy camp to take a majority.
Young campaigners have been galvanised by a number of incidents that have pointed to increased Beijing interference.
The most high-profile was the disappearance of five city booksellers known for salacious titles about Beijing politicians. They resurfaced in detention on the mainland.
Hong Kong was handed over by Britain to China in 1997 under an agreement guaranteeing its freedoms for 50 years.