The Rise and Fall of Dagong Global Credit Rating Agency: A Geopolitical Challenge for the Rating Industry

Chunping Bush

Journal of Financial Regulation, 2021, vol. 7, issue 2, 319-324

Abstract: Dagong Global Credit Rating Agency (Dagong) was originally branded as a Chinese national representative credit rating agency. Its international expansion in the US and the EU, in order to challenge the biggest international credit rating agencies, was unsuccessful and achieved little of significance. Dagong’s business suffered a complete halt because of a one-year suspension by the Chinese financial regulators. Its ratings heeded China’s geopolitical interest and China’s strategic plans of economic development rather than signalling the credit risks of debt instruments. Dagong’s ratings had a significant political bias towards countries which were China’s economic and political allies or supplied raw materials to China. Dagong officially became a state-owned credit rating agency following a reconstruction by the Chinese state in 2019. This article concludes that this new ownership may exacerbate the geopolitical characteristics of Dagong and poses a challenge to the international financial market.

Keywords: rating agencies; geopolitical bias (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1093/jfr/fjab007 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:refreg:v:7:y:2021:i:2:p:319-324.

Access Statistics for this article

Journal of Financial Regulation is currently edited by Dan Awrey, Geneviève Helleringer and Wolf-Georg Ringe

More articles in Journal of Financial Regulation from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().