Cash Isn’t King When It’s Missing. In China, It May Be
The country is a potential gold mine for international credit rating firms, if they can adapt to local conditions.
Beware the pitfalls when digging for buried treasure.
Photographer: KucherAV/Getty Images
Chinese debt is a potential billion-dollar market for international credit-rating companies. It’s also one riven with pitfalls.
The world’s third-largest debt market can no longer be ignored. Chinese companies sold more than $1.4 trillion of bonds last year, more than was raised by their U.S. counterparts. Eager to attract more foreign investors, the government in January allowed the Beijing-based unit of S&P Global Ratings to offer corporate ratings services. It was the first time a company wholly owned by an international credit rating firm was able to score domestic Chinese corporate bonds, the New York-based company said.