Hong Kong government responds to Fitch's rating: Fully affirms the resilience of Hong Kong's financial system and confidence in Hong Kong

On May 23, ratings agency Fitch Ratings released a report today, maintaining Hong Kong's credit rating at "AA-" with a "stable" outlook. A spokesperson for the Hong Kong government stated that Fitch's report fully acknowledged Hong Kong's strong credit fundamentals, including its substantial fiscal buffer space, good external financial conditions, and low government debt levels. At the same time, it also pointed out that Hong Kong's banking system is quite resilient, with ample capital and liquidity. The spokesperson noted that Hong Kong's financial system remains sound, with the overall asset quality of the banking system consistently at a good level by international standards. Bank deposits continue to grow, with total deposits in Hong Kong banks nearing HK$18 trillion as of the end of March, an increase of 11% year-on-year. The data clearly shows that Hong Kong's status and function as an international financial center are continuously strengthening, and global investors' confidence in Hong Kong is increasing. The capital markets are active, with the Hang Seng Index rising 18% last year and over 15% since the beginning of this year, surpassing a total market value of HK$41 trillion. The average daily turnover in the first four months of 2025 exceeded HK$250 billion, a 144% increase from the same period last year. The new stock market is also hot, with cumulative fundraising in the market exceeding HK$60 billion, and HKEX welcomed the largest IPO globally so far this year. Furthermore, the financial situation of the Hong Kong Special Administrative Region government remains sound, and in the 2025-26 Budget, it has proposed a strengthened fiscal consolidation plan to gradually restore balance to government accounts through cost-cutting measures primarily and revenue enhancement secondarily. According to the government's mid-term fiscal forecast, the operating account (day-to-day government income and expenditures) will be roughly balanced in this fiscal year and return to a surplus from the next fiscal year (2026-27 onwards). As for the non-operating account, it mainly involves capital expenditure for future investments, such as the construction of the Northern Metropolis Region, so the government will flexibly use market resources, including expanding bond issuance, to accelerate the development of related projects. Nevertheless, the deficit in the non-operating account will gradually decline from the 2026-27 fiscal year onwards. Overall, taking into account net proceeds from bond issuance, the government's comprehensive account is expected to return to a surplus in the 2028-29 fiscal year. The escalating tariff war has increased global economic uncertainty, and the global economy is facing challenges. However, international trade tensions have eased recently, and with the mainland economy continuing to grow steadily under a more active fiscal policy and moderately loose monetary policy, this is beneficial for Hong Kong and regional trade performance. The mainland's ongoing promotion of high-level two-way opening up to the outside world, coupled with efforts to drive green transformation, innovative technology, and digital economy development, will continue to bring business and investment opportunities to Hong Kong. With its unique advantages under the "One Country, Two Systems" framework, Hong Kong will flexibly adjust in the global trade realignment and seize opportunities. In fact, more domestic and foreign companies are establishing international headquarters, research and development centers, and regional offices in Hong Kong to expand global business. For example, in 2024, the number of overseas and mainland subsidiaries domiciled in Hong Kong increased by about 10% to nearly 10,000, reaching a historic high. The Invest Hong Kong agency has also achieved good results in attracting key enterprises' offices and investment promotions. As a "super connector" and "super value-adding player," Hong Kong will continue to actively connect the mainland with the world, strengthen traditional market ties, actively engage with new markets, especially in the global south, establish economic and investment networks, deepen integration with the Guangdong-Hong Kong-Macao Greater Bay Area, explore new growth areas, and inject greater momentum into the Hong Kong economy.