The US still has a few days to avert the fiscal cliff, but a prominent Chinese ratings agency is not waiting around. Dagong has already served notice of what failure might mean, putting the US sovereign rating on its negative watch list.
It is tempting to dismiss the Dagong statement as a publicity stunt, its latest in a long line of downgrades and warnings directed at the US. But Dagong’s criticism is a good reflection of views that are commonly expressed in Beijing. And given that China is the biggest foreign holder of US government bonds, these views deserve a hearing.