Global rat­ing agency’s po­lit­i­cally bi­ased de­ci­sion ‘harms it­self ’

Global Times US Edition - - BIZUPDATE - By Li Xuan­min Page Editor: chu­[email protected]­al­times.com.cn

Ma­jor global rat­ing agen­cies are wag­ing a rat­ing “cold war” against emerg­ing economies by let­ting their rat­ing de­ci­sions be over­shad­owed by po­lit­i­cal bias to serve the in­ter­ests of the de­vel­oped world, Chi­nese an­a­lysts said on Sun­day, warning that this could seriously taint their cred­i­bil­ity.

The com­ment came af­ter US rat­ing agency Fitch down­graded Hong Kong’s long-term for­eign-cur­rency is­suer de­fault rat­ing to AA from AA+ with a neg­a­tive out­look on Fri­day, taking the “one coun­try, two sys­tems” model in the spe­cial ad­min­is­tra­tive re­gion rather than the ri­ots that swept across the city in re­cent months as key rat­ing driv­ers.

The de­ci­sion has sparked mount­ing dis­sat­is­fac­tion in China’s fi­nan­cial industry, with some in­sid­ers throw­ing doubt on the in­de­pen­dence and fair­ness of global rat­ing agen­cies, all of which are head­quar­tered in the US.

Fitch said in a state­ment sent to the Global Times that it ex­pects the “the grad­ual rise in Hong Kong’s eco­nomic, fi­nan­cial, and so­ciopo­lit­i­cal link­ages with the main­land im­plies its con­tin­ued in­te­gra­tion into China’s na­tional gov­er­nance sys­tem, which will present greater in­sti­tu­tional and reg­u­la­tory chal­lenges over time.” The de­vel­op­ment could lead to a nar­row­ing of the sov­er­eign rat­ing dif­fer­en­tial be­tween Hong Kong and the Chi­nese main­land, it claimed.

Dong Shaopeng, an ex­pert ad­vi­sor for the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, de­scribed Fitch’s down­graded rat­ing for Hong Kong over the SAR’S rule of law as a move full of po­lit­i­cal bias that ex­posed US firms’ long-arm ju­ris­dic­tion and po­lit­i­cal in­ter­fer­ence into a coun­try’s in­ter­nal af­fairs.

“If you want to rate Hong Kong, then please in­clude rel­e­vant in­di­ca­tors such as fi­nan­cial market open­ness, fi­nan­cial risk man­age­ment abil­ity and busi­ness con­ve­nience. Why did Fitch cite such an ir­rel­e­vant thing as the po­lit­i­cal sys­tem to sup­port its anal­y­sis?” Dong told the Global Times, adding that Fitch’s move was part of a “cold war” that aims to ma­li­ciously crack down on emerg­ing and developing economies such as China.

An­other industry in­sider, who works for a fi­nan­cial in­sti­tu­tion in Hong Kong, pre­dicted that more sim­i­lar moves by other global rat­ing agen­cies that ques­tion Hong Kong’s rule of law could be announced in the near fu­ture.

“We all know the weight of global rat­ing firms’ voices in the fi­nan­cial industry. So this is a box­ing com­bi­na­tion, with tar­gets to shake Hong Kong’s role as a global fi­nan­cial hub,” he said.

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