HSBC Holdings chairman Sir William Purves is worried that bad perceptions of Hong Kong overseas during the next two difficult years could lead to a downgrading in the territory's credit rating. The next two years would be highly charged with politics, the territory's top banker said. ''In the next two years, we will have more politics than we would like to see'' with local elections next year and Legislative Council elections the year after, he said. ''The way to go forward is far from clear. These elections will come, but under what conditions remains to be seen.'' As the public entered into more arguments and political comment, Sir William was worried that perceptions of Hong Kong overseas, particularly at international credit-rating agencies, might be affected. ''Hong Kong's rating may be downgraded,'' he said. ''Outside perception is important to Hong Kong as we still need outside investment to support our infrastructure projects.'' The US-based credit-rating agency, Standard & Poor's, warned Hong Kong this month that although it was affirming its rating, the outlook for the territory was negative because of the uncertain outcome of the Sino-British discussions on Hong Kong's political future and the airport project. A negative outlook means the rating could be downgraded if the political impasse continued and adversely affected investment optimism. Sir William said Hong Kong's future hinged on demonstrating its continued value to China. He warned: ''We delude ourselves if we think Hong Kong's various functions - its port, its financial base, its expertise - could not eventually be replicated elsewhere.'' Sir William, who is scheduled to leave for London early next month, urged that the much-needed new airport and container ports be pushed ahead. The highly developed banking and financial regulatory system should be maintained, ''not least in anticipation of the eventual full convertibility of the yuan''. Hong Kong would not be of any value to China ''if we are not in a position to help China to maximise its trade and commerce with the rest of the world'', he said. But Sir William was not all pessimistic, adding that he thought ''general predictions will most often be reliable when they err on the side of optimism''.