Chinese Rating Agency: “The Whole World Will Be In Great Danger” If We Keep Trusting U.S. Rating Agencies

High Volate, Danger, Electrocute

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The head of Chinese rating agency Dagong slammed the major three ratings agencies, telling Der Spiegel, “If we keep using this rating system, the whole world will be in great danger.”In particular, Guan Jianzhong criticised agencies’ emphasis on ideology and values rather than “what actually causes risks to creditworthiness.”

He has called the recent U.S. downgrade by Standard & Poor’s a “catastrophe.”

Nonetheless, his rating agency preceded S&P’s in downgrading U.S. debt. This contrasts with China, which has “good all-around performance.”

“China is characterised by a real economy, unlike like the United States, which mainly depends on the financial industry. Though China’s financial industry is developing, China relies on its real economy to create value and money. If we can draw some lessons from the Western experience, we should insist on letting real economy create value and money while discouraging the Chinese from borrowing too much money.”