Hong Kong: The Hong Kong government has hit back after its international credit rating was downgraded for its inability to tackle the city's ongoing political unheaval.

The news comes after another weekend of violence that saw the second legal assembly of the new year prematurely shut down by police amid scenes of tear gas, chaos and violence.

"We strongly disagree with Moody's assessment of Hong Kong's current situation and are deeply disappointed by Moody's decision to downgrade Hong Kong's credit rating," a government spokesman said in a statement.

Moody's investment rating, changed from Aa3 from Aa2, could damage Hong Kong's long-term economic reputation and destablise the city's financial institutions.

The assessment said the rationale behind the downgrade was an ineffective response by Hong Kong's executive and legislative branches of government to recent unrest, indicating "weaker institutions and governance strength than Moody's [had] previously assessed."

Riot police stand guard outside a department store in Causeway Bay.Credit:Getty Images

At the same time, the agency also returned the city's outlook to "stable," having downgraded it to "negative" in September, showing a modicum of confidence in the city's ability to maintain its seasoned financial strength.

But it concluded that the Hong Kong government's reponse to political demands and concerns by the population were "insufficient".

Hong Kong has seen demonstrations and unrest since June, when anti-government protests broke out over a now-withdrawn extradition bill widely seen as a threat to the city's autonomy from mainland China.

The downgrade followed the arrest of prominent Hong Kong pro-democracy activist Ventus Lau on Monday, after a protest he helped organise in the financial district a day earlier turned violent.

Lau was charged with "obstruction of police administration" and violating the terms set when permission was granted for the protest.

At the weekend rally crowds swelled and spilled onto surrounding streets and some protesters briefly barricaded roads with umbrellas, traffic cones and other street furniture and dug up bricks from the pavement.

DPA

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