U.S. Credit Downgrade Hongkong Smes Affect The Most

Sovereignty in the United States credit Under the haze of demotion, Hongkong's SMEs predict that the US recession will lead to a reduction in Hongkong's export trade, especially in manufacturing, and the order will be reduced by 10-15%.

Hong Kong Small and medium enterprises Liu Dabang, chairman of the Federation, said that the further weakening of the US economy will reduce export trade and have a long-term impact on Hongkong's trade. "The United States cuts expenditure, national welfare and civil service wages may be reduced, and the purchasing power of the whole country decreases and imports naturally decrease."

Europe and the United States economy is weak, manufacturing industry bears the brunt, especially in the middle grade watches, toys, clothing and other non essentials industry most seriously.

As to whether this fluctuation will exacerbate inflation, Wu Bo hung, associate professor of economics at Baptist University, points out that the pressure on the dollar will devalue the Hong Kong dollar, resulting in imported inflation and a disguised increase in the cost of imports in Hongkong. But he said that because of the decline of the stock market, the consumption confidence of Hongkong residents has declined, "buying and investing activities are decreasing, domestic demand is falling, inflation is slowing down".

The US sovereign credit rating has been lowered by the US dollar and Hongkong's import prices have been raised, but the US dollar is only one of them. inflation Therefore, inflation is not expected to soared in the short term.