The head of Dagong Global Credit, China’s largest rating agency, is not best pleased with his western rivals.
In an interview with the FT, the agency’s chairman Guan Jianzhong didn’t mince words about the likes of Moody’s, Fitch and S&P:
The western rating agencies are politicised and highly ideological and they do not adhere to objective standards
And:
The financial crisis was caused because rating agencies didn’t properly disclose risk and this brought the entire US financial system to the verge of collapse, causing huge damage to the US and its strategic interests
And:
“The US is insolvent and faces bankruptcy as a pure debtor nation but the rating agencies still give it high rankings ,” Mr Guan said. “Actually, the huge military expenditure of the US is not created by themselves but comes from borrowed money, which is not sustainable.”
And crucially (emphasis ours):
China is the biggest creditor nation in the world and with the rise and national rejuvenation of China we should have our say in how the credit risks of states are judged
Dagong, of course, is the agency that issued a AA rating on the USA (which is rated triple-A by those nefarious western agencies) and a AA-minus rating on the UK (also a triple-A credit).
This is one to watch.
Related links:
Sovereign ratings made in China – FT Alphaville
China Wins Higher Debt Rating Than U.S. in First Report by Chinese Company – Bloomberg