Moody’s slashes Hong Kong rate after China cut

HONG Kong yesterday hit back at a decision by Moody’s to cut its credit rating on the city, which the agency said was becoming increasingly close to mainland China. The move was announced hours after the firm downgraded China for the first time in almost three decades citing concerns about its ballooning debt and slowing economic growth. Moody’s decision came as China tries to clean up a toxic brew of unregulated and risky lending that for years has fuelled the economy’s spectacular growth, though some analysts doubt Beijing’s willingness to quit its debt addiction. Beijing rejected the cut, saying Moody’s had used an “inappropriate” method to assess the risks facing the economy. In downgrading Hong Kong, the agency outlined the growing links between the city and the mainland, with banks increasing China-related lending.