Global Economic News

Chinese Rating Agency Downgrades U.S. and U.K.

July 13 (EIRNS)—The United States and Great Britain have been stripped of their triple-A sovereign credit rating by a Chinese credit rating agency. The Chinese Dagong Global Credit Rating Co. has downgraded the sovereign credit ratings of several major Western economies, downgrading the U.S. rating to AA, and the U.K. and France to AA-. Belgium, Spain, and Italy were rated A-. China is at AA+ along with Germany, the Netherlands, and Canada.

In keeping with a recent statement by Chinese President Hu Jintao, who called on credit-rating agencies to use methods "not affected by ideology," Dagong uses criteria that give greater weight to "wealth-creating capacity" and foreign reserves, according to Ambrose Evans-Pritchard, writing in today's Daily Telegraph.

Guan Jianzhong, the chairman of Dagong, said, "The reason for 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."