US, UK losers as China rates the world

The United States, Britain and France have lost their triple-A credit rating – that’s according to China’s Dagong Global Credit Rating.  

This is a pretty unique piece of research by a credible organisation which is challenging the dominance and ideology of the big three – Fitch, Moody’s, and Standard and Poor’s.

“Intrinsically, the reason of the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor’s repayment ability and provide the wrong credit rating information to the world,” Guan Jianzhong, Dagong’s chief executive, said.

Dagong is echoing concerns raised by Hu Jintao, the Chinese president, about Western credit rating agencies.

At the G20 summit in Toronto he said: “We must develop an objective, fair, reasonable and uniformed method and standard for sovereign credit rating, so that the rating result can precisely reflect a country’s economic situation as well as its level of credit risk.”

Dagong is hoping Chinese institutions start using its ratings when they plan their investments.

The research probably came too late to stop China’s State Administration of Foreign Exchange from investing one billion euros in Spanish bonds.

This is how China sees the world, but has Dagong handed out the right ratings? 

Rating	Countries
AAA	Norway, Australia, Denmark, Luxembourg, Switzerland, Singapore, New Zealand
AA	China, Germany
AA	United States, Saudi Arabia
AA –	France, United Kingdom, Korea, Japan
A –	Belgium, Chile, Spain, South Africa, Malaysia, Estonia, Russia, Poland, Israel, Italy, Portugal and Brazil.