Tuesday, 21 January 2020

Lam on Charm Offensive in Davos

Can Carrie Lam persuade world leaders Hong Kong is open for business?
Hong Kong's fearless leader Carrie Lam Cheng Yuet-ngor is in Davos, Switzerland to attend the World Economic Forum in the hopes of persuading leading political and financial figures that our city is still open for business.

Her visit coincides with a report by Moody's Investors Service that has downgraded Hong Kong's rating by one notch to Aa3 from Aa2. In September, Fitch Ratings cut Hong Kong's sovereign rating  to AA from AA+.

"Team HK" is in Davos for the World Economic Forum
Moody's says the downgrading is due to concerns the government has not been able to quell the political and economic issues from eight months of protests.

"The downgrade principally reflects Moody's view that Hong Kong's institutions and governance strength is lower than previously estimated," said Marie Diron, managing director of Moody's sovereign risk group, and Martin Petch, vice-president and senior credit officer of sovereign risk group, said in a statement on Monday night.

"The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody's had previously assessed," the New York-based credit rating agency said.

Protests are still happening, one of the latest in Landmark
It described the government's response to demands for greater political freedoms and expensive living costs as "notably slow, tentative and inconclusive".

"It may also point to more significant constraints on the autonomy of Hong Kong's institutions than previously thought," the agency added, hinting pressure from Beijing.

This is a pretty big strike against Lam and her administration, who are bringing "Team HK", including the trade secretary, top officials from the stock exchange, airport authority, MTR Corp and the head of Swire Group to the Swiss mountain resort.

But perhaps a more eminent threat is the Wuhan pneumonia that is spreading quickly (or we just haven't been told the truth about it all along), and it is only a matter of time before the first confirmed cases are in Hong Kong.

The corona virus in Wuhan is spreading very quickly
If Hong Kong does experience another SARS outbreak, that will be a double blow to the city's economy that has already been battered by the protests.

News of the pneumonia-like virus spreading resulted in Asian stocks taking a battering, and Hong Kong more so with the downgrade from Moody's.

How is Lam going to convince world leaders that she can lead the city out of these crises? She hasn't demonstrated any kind of leadership in the past eight months...

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