beyondbrics

Apparently the global financial landscape looks very different from Beijing than it does from most of the rest of the world.

In a challenge to what it called the “irrational” international rating system, Dagong Global Credit Rating, China’s first official credit rating agency, has released what it claims is the world’s first “non-western” assessment of sovereign credit and risk.

In stark contrast with the ratings of the three major internationally recognized ratings agencies – Standard and Poor’s, Moody’s and Fitch – the USA and most other major western economies are all less politically and economically stable than China, according to Dagong.

The USA received an AA rating with a negative outlook, while China’s domestic debt was rated AA+ with a stable outlook, higher than the A1 assigned to China by Moody’s and A+ given by S&P.

Only New Zealand, Singapore, Australia, Norway, Denmark, Luxembourg and Switzerland received the highest Dagong rating of AAA, while the UK, France, South Korea and Japan all scored below China with AA- ratings.

With the shadow that hangs over global ratings agencies’ reputations in the wake of the financial crisis, Dagong says it sees an opportunity, not only to remake the global credit rating landscape but to “establish China as a superpower in the international financial service system”.

“An important reflect for the great rejuvenation of the Chinese nation is China’s status and its influence in the world, which need to be realized by increasing China’s bargaining power and influence in international affairs,” Guan Jianzhong, Dagong’s chairman and president, is quoted as saying on the company’s website.

“It is crucial for China to have a powerful national credit rating agency that helps to drive the development of Chinese credit society and has the bargaining power in the international capital market,” he continues.

Despite the discredit the financial crisis has brought to the big three global ratings agencies, investors are still more likely to trust their ratings than those produced by a company that has a mission statement like that.

Related:

Guan Jianzhong statement

Dagong’s sovereign ratings for 50 countries (Chinese only)