The Dagong Global Credit Ratings Agency, China’s answer to Moody’s and Standard and Poor’s, grabbed headlines last week by announcing its second downgrade of US public debt, from AA to A+ with a warning. The new rating places US treasuries below Chinese and German public debt, although still ahead of the United Kingdom and South Korea, citing in a Tuesday press release not only the recent budget fight but a ‘declining trend’ for the United States. The downgrade has been seen in the United States as confirmation of American anxiety about its long-term fiscal position. Unsurprisingly, it’s no such thing. The move seems to be a mix of indirect Chinese pressure on US monetary policy, tit-for-tat response to a rebuff the company received last year, and a simple, if successful, PR stunt. With US firm S&P concurring, the official Xinhua News Agency has joined the fray, directly criticizing the United States ...
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