Competition among China’s credit- rating agencies is intensifying, leading to a slide in standards reminiscent of what happened in the U.S. before the financial crisis, according to Dagong Global Credit Rating Co.
Workers toil by night lights with hoes, carving out the signs for Olympic rings in front of an unfinished 30,000-seat stadium, bulb-shaped gymnasium and swimming complex in a little-known Chinese city.
Credit ratings assigned to yuan- denominated bonds issued on behalf of local governments in China are misleading and don’t reflect risks investors face, Dagong Global Credit Rating Co.’s chairman said.
China’s stocks dropped for the first time in seven days on concern about rising credit risks at banks and speculation recent gains for commodity producers were excessive given prospects for slowing economic growth.
China’s National Association of Financial Market Institutional Investors is planning a credit rating firm that will charge investors rather than borrowers for risk assessments, according to a person familiar with the matter.