Financial News
Written by: Zhang Weilun
2020-07-20 18:09
Last update date: 2020-07-20 18:09Standard & Poor's, an investment rating agency, pointed out that in the past, Hong Kong had unique advantages combined with a variety of factors, which made her unique in the global economic and financial system and cannot be replicated. However, related advantages are already at risk of erosion. With increasing political uncertainty, weakening cohesion and increasing competition from the mainland, Hong Kong's particularity has declined. It is expected that by 2030, the trend growth will be halved to around 1.1%.
However, Standard & Poor's pointed out that this report will not take any action on Hong Kong's ratings.
The bank also pointed out that the long-term economic prospects of Hong Kong are declining, especially the rapid deterioration of Sino-US relations, which has led to the decoupling of the US dollar and RMB financial system. The second risk is that the mainland risk is that the mainland will accelerate the opening up of the financial industry, which will weaken Hong Kong's role as an intermediary. The worst case is that the trend growth will be zero in the next 10 years. The best case is that the mainland slows down its opening up, and Hong Kong can benefit from the mainland's expanding offshore financial business.
Standard & Poor's also pointed out that three types of uncertainties affecting Hong Kong's economy are increasing. The first is that people's views on China-Hong Kong relations are changing. Whether the new practice of China-Hong Kong relations is successful is unknown. The third is how countries around the world view Hong Kong under the new China-Hong Kong relations.
Regarding the economic outlook of Hong Kong, S&P expects that Hong Kong will experience a cyclical recovery in the short term; it is expected to shrink by 4.7% this year and rebound by 4.9% next year, but the trend growth is expected to slow down.
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