China's Dagong Global Credit Rating became the first non-Western rating agency to assess sovereign credit risks countries around the world. This move is aimed at removing the reliance on foreign agencies, some of which played a role in exacerbating the financial crisis.

Dagong Global Credit Rating issued its first sovereign credit report for 50 countries Sunday.

The 50 countries' GDPs account for 90 percent of the world's economy. According to the report, China's credit rating beat several developed countries including the US, Germany, the UK, Japan, and France, based on the political stability and econom-ic performance.

Dagong rated China AA+ for yuan-denominated investment grade and AAA for foreign currency-denominated investment grade, higher than the ratings of A1, A+ and AA- given by Moody's, Standard Poor's, and Fitch Ratings.

"(China's own rating report) is meaningful politically and economically," said Ding Jianping, professor of finance at Shanghai University of Finance and Economics.

"This sovereign report provides a new reference to the world, breaking the monopoly of the major three agencies," said Guan Jianzhong, chairman and president of Dagong Global Credit Rating.

Currently the three international credit rating agencies occupy around 90 percent of the global market share. Their credibility was widely questioned by the international community following the global financial crisis.

They were also accused of further fuelling the European debt crisis by releasing credit-ratings cuts even after Greece got other EU countries' financial support. European leaders and other emerging countries were reportedly pushing for a new bond-rating agency after this.

The new ratings are helpful to protect the interest of the creditor countries, Guan said, adding that the big three agencies provides ratings based on similar standards which value a sovereign country's ability to borrow more than its ability to repay debt.

"China needs to voice its own opinions on credit ratings," Shanghai University of Finance and Economics' Ding said.

But it will take time to get the credit agency and its ratings recognized internationally, Ding said.American credit rating agencies have now controlled most Chinese credit ratings agencies. Moody's acquired a 49 percent stake of CCXI in 2007, Fitch Ratings purchased 49 percent of equities of China Lianhe, and S&P's has strategic alliance with Shanghai Brilliance. Dagong remains the only independent major credit rating agency.
                                                                                                    Source: Global Times