Date: 2025-03-11 Page is: DBtxt001.php txt00001240
Society and Economy .,. USA
Guan Jianzhong: Downgrading the US
The chairman of China's only independent credit rating agency warns they might have to downgrade the US again.
COMMENTARY
Peter Burgess
Guan Jianzhong: Downgrading the US
The chairman of China's only independent credit rating agency warns they might have to downgrade the US again.
While European leaders are struggling to deal with the crises in Italy and Greece, another debt crisis is looming. The US congress has until November 23 to agree on how to reduce its public debt, or face mandatory budget cuts. Many are concerned that failure to reach a deal might lead to a downgrade of the US credit rating again.
Barack Obama, the US president, spoke out strongly in August, when credit rating agency Standard & Poor's (S&P)downgraded the US, which caused a sizable downturn on stockmarkets around the world.
But nine months before S&P's decision China's Dagong Credit, China's only independent credit rating agency that grades foreign sovereign debts/bonds, had already sounded warnings about the US debt and downgraded America's rating.
Guan Jianzhong, the chairman of Dagong Credit, talks to Al Jazeera's Teymoor Nabili about the global financial crisis and how it is being handled in the US. Are the Chinese happy with progress made so far, or will China downgrade the US again?
'America has told the whole world that they are triple A, that there is no risk with America whatsoever. Obviously they are safe-guarding their interests, the interest of the state. Their rating standards have become problematic.
The measures available to them [the US] cannot be effective, so they have another way out which is to depreciate the US dollar, to print more money. And that will also make it a lot more worse, this has affected their credit and it is negatively affecting their credit prospects - so that their overall ability to pay back their debt will continue to go down.
We are continuing to monitor this closely. First of all we need to look at this year's economic growth and then predict next year's trends. If in the year 2012 the overall projections are not very good, meaning that the sources of payment, and liabilities, are bad and cannot be changed, or change for the worse, then we will lower the rating once again.'
Guan Jianzhong, chairman of Dagong Credit
Guan also discusses Chinese investments in Europe and the future of the euro; and he explains why he thinks that Western credit rating agencies are biased and politicised.
Talk to Al Jazeera
Last Modified: 12 Nov 2011 17:39
The text being discussed is available at
SITE COUNT< Blog Counters
Reset to zero January 20, 2015
TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends. TVM is a 'big idea' that has the potential to be a game changer. The goal is for it to remain an open access initiative.
