Out-Law News | 04 Jun 2014 | 3:14 pm | 1 min. read
Chinese rating agency Dagong is likely to be involved in the new entity, along with a Russian state-backed institution, sources familiar with the plans told the Financial Times.
“In the beginning, the agency will assess Russian-Chinese investment projects with a view to attracting (investors from) a number of Asian countries,” Russian finance minister Anton Siluanov said in Beijing, according to his ministry, reported the newspaper. “Gradually, based on the progress and authority of such an agency, we believe it will rise to a level where its opinions will attract other countries.”
No timeframe or other details have yet been released in relation to the project.
The joint initiative comes after ratings agency Standard & Poor's (S&P) lowered Russia’s sovereign rating to one grade above junk status in April, said the Financial Times.
The S&P downgrading came after the European Union, the US and some other countries imposed sanctions on a number of Russian and Ukrainian individuals following Russian activity in neighbouring Crimea which the EU and US believe has undermined the sovereignty of the Ukraine. Moscow dismissed the S&P downgrading as politically motivated, according to the Financial Times, a criticism which S&P has denied.
Commentators have interpreted plans for the Chinese-Russian rating agency as a move by both countries to reduce dependence on western rating agencies such as S&P, Moody's and Fitch, said the Financial Times. The Brics group of countries, which are Brazil, Russia, India, China and South Africa, has long discussed plans to set up its own rating agency along with a Brics bank. Some commentators have suggested that the China-Russia initiative could be broadened into a Brics-wide project when the group meets in Brazil next month, the newspaper said.
The planned rating agency follows a visit by Russian president Vladimir Putin to China last month, during which Putin and Chinese president Xi Jinping signed a deal in which Russia's state-owned Gazprom will supply China National Petroleum Corp with up to 38 billion cubic metres of gas a year for 30 years, beginning in 2018, according to a report by the Financial Times. No official price was announced for the deal, however it is believed to be worth more than $400bn, according to a BBC report.