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One reason for the preponderance of highly rated firms in China is an implicit assumption of state backing. That is despite efforts by Beijing to improve the quality of ratings and strengthen oversight, including freezing Dagong's core ratings business last August for violating industry rules. In contrast, many investors all but ignore official ratings, which rank most issuers as AA or higher, implying little default risk and giving little guidance on pricing.

While quantifying Ratingdog's reach is difficult, Josh Sheng, chief investment officer at Shanghai Tongshengtonghui Asset Management, said a 'large proportion' of domestic mutual funds and securities companies refer to its ratings and pricing. (Graphic: Investors demand more from riskier debt - ) Ratingdog, however, had warned in 2017 of QPIG's 'very large susceptibility' to a downturn, giving it a speculative-grade rating of 7 out of 10.īoth Minsheng and QPIG subsequently made delayed payments. 22, Qinghai Provincial Investment Group (QPIG), rated AA by three agencies including Dagong Global Credit Rating Co Ltd, became the first state-owned enterprise in decades to miss a deadline for an offshore bond coupon payment. Ratingdog, however, had flagged Minsheng's heavy debt burden and limited profit potential as early as 2017. 29, China's state-backed Minsheng Investment Group, a private investment conglomerate, missed a deadline for a maturing 3 billion yuan onshore bond, belying its rock-solid AAA rating from Shanghai Brilliance Credit Rating, one of China's four big agencies. (Graphic: China corporate bond defaults - ) Two defaults this year highlight the gap between official ratings and the Shenzhen upstart, which investors say is the country's leading provider of free, independent credit research. 'There's a lot of space in the market for good information.' 'In China, for fixed income, we need these kinds of services,' said Shen Yi, chief executive officer of Shanghai ShenYi Investment Co, referring to companies such as Ratingdog.

Shanghai shenyi enterprise development co. ltd.