Beijing is also rewarded with an upgrade for policy successes
Hong Kong's foreign currency sovereign rating was yesterday upgraded to its highest level by Standard & Poor's
But the global credit-ratings agency, which raised the rating to AA-minus from A-plus, urged the government to expand its fiscal base by introducing a sales tax.
The upgrade is linked to Standard & Poor's upgrade of China's foreign currency rating to A-minus from BBB-plus which it attributed to the central government's aggressive restructuring of the financial sector and improved profitability of state-owned enterprises.
Sovereign ratings are an indicator of the certainty that a government will repay government bonds and other debt obligations. Hong Kong's ratings outlook was upgraded from stable to positive in May in anticipation of yesterday's rating rise.
Financial Secretary Henry Tang Ying-yen said the upgrade was an affirmation of the government's ability to control public spending, and the advantages of integrating Hong Kong's economy with the mainland's.
'We will continue to work on improving the flow of funds, the flow of people as well as the flow of goods between the two places,' he said.
