Moody’s downgraded Hong Kong’s credit rating one notch to “Aa3″ from “Aa2″ on Monday, saying its view on the strength in the city’s institutions and governance is lower than previously estimated.
The move came after Fitch Ratings cut Hong Kong’s sovereign rating by one notch to “AA” from “AA+” in September.
In my opinion, the downgrade has been made for good reason.
Take a look at the slow and inadequate government response to the Wuhan coronavirus, and it’s not hard to understand why rating agencies made the move.
“Too little, too late” best sums up the performance of our officials.
When the pneumonia outbreak emerged in Wuhan last month, authorities did not arrange for the body temperature of passengers arriving from the mainland city to be checked. No travel alert was issued either.
Such a relaxed government stance might have misled the public to underestimate the threat from the virus.
It was only after the situation in Wuhan worsened, with the number of cases growing along with the number of deaths, and Hong Kong saw the number of suspected infections rising to over 100, that Hong Kong authorities decided to step up measures regarding the outbreak.
From Tuesday, all passengers arriving on flights from Wuhan are required to fill in health declaration forms, declaring any symptoms and putting down their contact information for follow-up action. Wuhan authorities later suspended transport out of the mainland city and urged residents not to leave.
It will be recalled that in 2015, during the outbreak of Middle East Respiratory Syndrome, Hong Kong authorities did not lose time and raised the Red Outbound Travel Alert on South Korea.
This time around, the government officials waited until the lives of the city’s 7 million people are at risk before acting.
To understand why officials apparently dragged their feet on the Wuhan virus, perhaps we can look at the situation from a political angle.
If Hong Kong took immediate action, it could be regarded as overreacting, and such action might be seen as negative for China’s image and stability, therefore politically incorrect.
Such government mentality is becoming more prevalent in recent years, which may have eventually led the rating agencies to conclude that Hong Kong is increasingly unable to make its own policies and thus has less reason to enjoy a premium rating over mainland China.
This article appeared in the Hong Kong Economic Journal on Jan 22
Translation by Julie Zhu with additional reporting
[Chinese version 中文版]
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