The “new cold war” from Russia and China

By Toby Manhire In Economy, The Internaut

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notesMoody’s. Fitch. Standard & Poor’s. Named like a troupe of cartoon villains, these US-based outfits were lambasted for misreadings in the leadup to the global financial crisis, and now they have competition from afar.

Piqued by what they regard as politicised assessments, Russia and China are together backing a new ratings agency, based on the Beijing based Dagong.

“Moscow’s standoff with the west over Ukraine has made it more eager to establish institutions that would reduce its dependence on the US and Europe,” explains the Financial Times.

“A new Russian-Chinese credit rating agency could counter the three most influential rating agencies, all based out of the US,” adds Deutsche-Welle. “This would provide for balance and fairer ratings – in theory.”

Crucially, Dagong bases its assessment of nation-states’ risk “more strongly on fundamental data such as debt ratio”, writes Holger Zschäpitz, economics editor of German daily Die Welt (via WorldCrunch)a metric that is much to Russia and China’s favour over debt-ridden America.

And it could prove a harbinger of something startling.

“Creating their own rating agency is just another step of the two powers in the fight against the West’s financial primacy,” Zschäpitz writes, pointing to a number of other institutional enterprises.

“The various actions are somewhat reminiscent of the arms build-up during the Cold War: Russia and China appear to be feverishly working at building up their counterattack capacity in the event of ‘total’ financial war with the West.”


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