China ratings agency says U.S. blocks it from entry

BEIJING (BestGrowthStock) – A Chinese credit rating agency that made waves with an alternative view of sovereign debt risks said that U.S. regulators have unfairly blocked it from entering the American market.

Dagong Global Credit Rating this week published its first international sovereign credit report, listing U.S. government debt as a bigger risk than that of 11 other countries, including China.

Established U.S.-based ratings agencies, such as Standard & Poor’s and Moody’s Investor Service, give the United States a top grade and mark China lower.

Guan Jianzhong, chairman of Dagong, said the Chinese firm hit a wall in its application to the U.S. Securities and Exchange Commission (SEC) for recognition as a ratings agency.

“The United States has rejected our entry. Its reasons were illegal. They didn’t actually exist in U.S. regulations,” he told Reuters on Wednesday.

“The first was that we didn’t have an office in the United States. The second was that they would like to come to China to supervise us. But this is an infringement of China’s sovereignty and our country wouldn’t be able to allow this,” he said.

The SEC declined to comment.

A document on the SEC website, dated April 14, shows that Dagong applied on 24 December, 2009, for registration as a nationally recognized statistical rating organization.

In that document, the SEC raised concerns about whether Dagong would be able to comply with provisions of U.S. securities laws. It said that a final ruling on whether to grant or deny Dagong’s application would come on July 22.

Guan, who said Dagong has already spent more than 10 million yuan ($1.5 million) on lawyers’ fees for the application, said it might take intervention from Beijing to break into the U.S. market.

“This problem is quite complex,” he said. “We haven’t given up, but we need to see what what kind of support the Chinese government will give us.”

(Reporting by Simon Rabinovitch; Editing by Alan Wheatley & Jan Dahinten)

China ratings agency says U.S. blocks it from entry