BEIJING - The head of China's largest domestic rating agency denied criticism by its western counterparts of practicing populism, while reaffirming the agency's principals of independence, objectivity and fairness.
Based on long-term research on the credit economy and rules and experience of rating standards, the Dagong Global Credit Rating Co Ltd provides impartial rating information in the post-crisis era, which has warded off swinging to domestic interests or so-called "populism", Guan Jianzhong, chairman of the Dagong Global Credit Rating told Xinhua in an exclusive interview on Wednesday.
In Tuesday's interview with the Financial Times, Harold "Terry" McGraw III, chairman and chief executive of the US-based McGraw-Hill Companies, which owns Standard & Poor's, suggested that the Chinese rating agency follow a "populist mood", and lack transparency in publishing its policies, procedures and putting out assumptions and criteria.
Guan said the accusation is irresponsible for the western rating firm to label a new-born international rating agency as "populist", instead of carrying out self-criticism on its own highly politicized rating standards.
"Standard & Poor's failed to identify the debtor nations' currency depreciation, which infringed on the interests of the creditor nations, as the sovereign debt default. Such practice is the fundamental cause weighing on the instability of the international credit system," said Guan.
Guan also rejected reports that he suggested the government should have more control in credit rating decisions.
"It's a total sheer absurdity. I'v never made such a suggestion," he said.
"Dagong has been maintaining its independent, impartial and fair position, however, the independence of some US rating firms needs to be questioned due to the close relationship between the shareholders and their clients,"said Guan, adding billionaire investor Warren Buffett is the largest shareholder in Moody's.
Guan also defended Dagong's openness and transparency in ranking standards.
"The English version of Dagong's sovereign credit rating standards and methodologies will be released soon," said Guan.
McGraw told the Financial Times that global ratings agencies, such as S&P, Moody's and Fitch were being unfairly targeted by politicians, commentators and competitors throughout the world.
Guan pointed out that the increasing voices from professional rating agencies in emerging countries posed challenges to the long-monopolized western rating firms, which is conducive to the healthy development of the global rating system.
Dagong published its own sovereign credit ranking on July 11. The report, which covers 50 countries whose gross domestic product (GDP) accounts for 90 percent of the world' s total economy, offers markedly different valuations to 27 countries compared with those given by Western rating rivals such as Moody' s, S&P and Fitch.
Brazil and other emerging economies were rated higher thanks to their political stability and strong economic growth, while the United States, France and other developed nations were ranked much lower in Datong' s report due to their slow economic expansion and mounting debt burden.