Monday, November 14, 2011

China's Largest Credit Ratings Agency Threatens to Downgrade US Credit Rating

The head of China's largest credit ratings agency, Dagong Global Credit Rating, has threatened to downgrade the US credit rating due to Washington's failure to address its federal budget deficit.

In an interview with al-Jazeera, Dagong's chairman, Guan Jianzhong, said that the agency would lower the US rating yet again due to Washington's inaction in cutting its federal budget deficit. According to Guan, Dagong will continue to monitor the overall projections for 2012. If the sources of payment and liabilities are bad and do not change or change for the worse, Dagong will downgrade the US credit rating.

China is the largest foreigner buyer of US government debt and accounts for one-third of all foreign-held US securities. Since the summer, China has become more vocal about the US "addiction" to debt.

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