Hong Kong’s top politician Carrie Lam said she is “very disappointed” by the Moody’s ratings downgrade for the city-state.

Speaking to CNBC’s Geoff Cutmore at the World Economic Forum (WEF) in Davos Lam said: “We are very disappointed by the downgrading by Moody’s from Aa2 to Aa3.”

The chief executive said she was even more upset by the reasons given by the ratings agency.

“If you ask me, I am even more disappointed by their assessment of the Hong Kong situation and their comment on the ‘weak institutions and governance,’ because after seven months of unrest, what has proven to be resilient is Hong Kong’s institutions and governance.”

Last week, Lam announced a $1.3 billion fiscal pledge, designed to kickstart Hong Kong’s muddling economy back into life. On Tuesday, Moody’s ratings agency appeared to dismiss that plan by cutting the city’s rating by one level. Fellow ratings agency Fitch had already downgraded the city-state in September last year.

Protests continue

Early demonstrations against a bill which could have allowed Hong Kong citizens to be extradited to Beijing to face criminal proceedings began in March 2019. Wider protests, marred by violence and the death of two people, have become a regular occurrence since early June.

Police clashed with pro-democracy supporters as recently as Sunday when authorities used batons and tear gas to disperse the crowd which had legally gathered in the financial district.

Hong Kong is a former British colony that was handed back to Chinese rule in 1997.

The city-state enjoys some autonomy under the “one country, two systems” principle. This allows citizens some degree of financial and legal independence from Beijing. Protesters fear that mainland China will eventually seek to wrest full control of the former colony.

On whether Lam had come to embody the protesters’ anger and whether she should step down, the chief executive said resigning would not solve the problem. “Walking away could cause more uncertainty and confusion in the continued governance of Hong Kong.”

On Monday, the chair of the Hong Kong Stock Exchange, Laura Cha, told CNBC she felt Beijing would resist from interfering in the handling of the protests.

“I believe that it will, and it should. It is a local issue under one country, two systems,” said Cha, who acted as a member of China’s National People’s Congress for 10 years up until 2018.