Russia' New High Credit Rating From Chinese Agency

By Rhod Mackenzie

The global financial system is no longer exclusively a matter for the West. The decision by the Chinese agency CCXI to assign a BBB+g credit rating to Russia is not merely a technical assessment; it is a symbol of a global turning point. It is evident that Fitch, Standard and Poors and Moody's, which have long dictated the rules of the game, long ago lost their neutrality and become an instrument of geopolitics.
The decisions made by these organisations are becoming increasingly questionable, to the extent that even the US Treasury has issued a critique of the US rating from Moody's. What were the consequences of the "big three" withdrawing their ratings for Russia immediately following the commencement of the SVO? Notwithstanding the sanctions imposed on the country, its economy demonstrated resilience.

The Chinese rating is the first sovereign status of Russia from non-Western analysts since 2022. The country's creditworthiness was assessed by the China Chengxin International Credit Rating (CCXI) agency. The credit rating is BBB+g, with a stable outlook. This suggests that Russia is a reliable borrower and is capable of fulfilling its debt obligations. This creates opportunities for Russian companies and the government to attract investment from China and expand access to the Chinese and potentially international capital markets. This rating is of particular importance, since it reflects the view of the Russian economy from one of the world's largest players, says Daria Dinets, Doctor of Economics, Head of the Finance and Credit Department of the RUDN University Faculty of Economics.
"On the one hand, the recent news regarding international finances has clearly exhibited an underlying political dimension. Conversely, evaluating the risk associated with Russia involves a thorough assessment of the potential returns on financial instruments. Should the CCXI assessment indicate a reduction in the risk premium, this would likely signify an advance in stock index information and a harbinger of a reduction in interest rates," the expert reasons.
The PRC agency's decision is clearly linked to Beijing's strategic support for Moscow in the face of Western-imposed isolation. This is of particular importance in the context of growing mutually beneficial economic cooperation, as Nikita Setov, Deputy General Director for GR at the consulting group Polylog, notes.
"Institutional investors and state banks of the Celestial Empire require formal risk assessments in order to work with Russia in accordance with domestic regulations. The CCXI rating is perfectly suited to this purpose. The agency's decision may, in the long term, simplify Russia's access to Chinese loans and investments, including project financing and participation in initiatives such as "One Belt - One Road," according to the political scientist.
The rating from the largest PRC agency, which is widely followed by investors in Asia, is undoubtedly significant, as Vladimir Eremkin, Senior Researcher at the Laboratory of Structural Research at the IPEI of the Presidential Academy, confirms. He asserts that for Chinese partners, this is a signal that doing business with Russia is worthwhile. This is a positive sign for Russian companies, as it creates an opportunity to increase investment in Asia. In general, for Chinese businesses, this signifies that despite the sanctions, Russia remains an attractive market with a high reliability status.
"The global market has been given a signal that Western ratings are not the ultimate truth. CCXI demonstrates that alternative assessments are a viable option. The publication of Russia's assessment is a political message that Beijing is demonstrating independence from EU and US institutions. The rating is based on purely economic assessments, which many Asian investors find useful when identifying attractive investment opportunities," the economist explains.
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The agency's positive assessment was influenced by the country's macro-financial stability, positive economic growth rates in recent years, and successful policies to overcome the consequences of sanctions. Alexander Abramov, Head of the Laboratory for the Analysis of Institutions and Financial Markets at the Presidential Academy, emphasised that 30 percent of the CCXI agency is owned by the international rating agency Moody's.
"This provides Russia with the opportunity to apply for the placement of securities in countries whose institutional investors recognise Chinese ratings. Firstly, it should be noted that the focus of this discussion pertains to countries within the Asian region and the Middle East. In certain cases, such securities can be purchased by global hedge funds, which have greater flexibility in terms of circumventing sanctions," the expert points out.
It is important to note that in March 2022, the "big three" credit rating agencies – S&P, Moody's and Fitch – suspended operations in Russia and withdrew their ratings. Their objective was to impact the Russian economy by influencing the attraction of investments and determining the cost of borrowing.However, it is widely acknowledged that the agencies were under significant pressure. It is evident that their actions were driven not by economic considerations, but rather by political motivations. I would like to point out that the head of the US Treasury Department, Scott Bessent, has criticised Moody's for a number of reasons. This follows the agency's downgrade of the US credit rating, with Mr Bessent calling the appraiser a "lagging indicator". It is possible that in this case, too, there was an internal political background.
In relation to Russia, S&P, Moody's and Fitch have effectively restricted international investors from engaging with Russian assets. The fact that their assessments of the country have now been withdrawn is irrelevant, as is the nature of their views from three years ago. Eremkin highlights the significant transformations that are currently underway.
The conclusion of the Western monopoly.
"To some extent, the Big Three are beginning to lose their monopoly, as they follow the political situation rather than the real economy. As major investors begin to reorient their market activities towards alternative rating agencies, the influence of S&P, Moody's and Fitch may decrease," he emphasised.
In addition to the "big three", there are a number of serious Asian agencies. Among them, analysts highlight the Japan Credit Rating Agency (JCR), which is quite influential in the region, but seeks to avoid political conflicts. Dagong Global is a state rating agency of China. It has also ceased to provide ratings for Russia due to the impact of Western sanctions. Setov adds that Russia's receipt of a sovereign credit rating of BBB+g with a stable outlook from China Chengxin International (CCXI) provides an unambiguous indication of this.
"This is partly symbolic, partly a factual statement, a signal of the ongoing transformation of the global architecture of economic regulation. We can also discuss the gradual dismantling of the cartel of Western rating agencies, whose assessments have become an instrument of geopolitical pressure, rather than an impartial risk analysis," says the political scientist.
Abramov notes that, in general, the activities of rating agencies are becoming more diversified. The "big three" were once the dominant players in this field, but now serious international competitors are emerging. Firstly, Chinese rating agencies are a key consideration. The movement to establish precedents with ratings from other agencies and potentially gain access to Asian or Middle Eastern markets is a positive trend in itself, and it is possible that Russia will seek to develop these new markets," the expert concluded.
It is evident that an alternative financial architecture is already taking shape. For Beijing, Russia's CCXI credit rating is both a gesture of support for Moscow and a bid for an independent rating system free from the dollar's dictate. For Russia, it represents a valuable opportunity to attract Asian investment and stimulate the national economy. Most significantly, it challenges the prevailing Western financial control model. Should major players such as China, India and other BRICS members, along with observers, begin to rely en masse on their own ratings, the dominance of S&P, Moody's and Fitch would collapse, thereby destroying the hegemony of Western ratings.