Experts have pointed out that the Chinese Communist Party (CCP) is blaming rate quotes’ accurate reports for the country’s economic and stock market downturn. Since the new year began, the markets continue to deteriorate and had a significant drop on Feb. 2. Meanwhile, the People’s Bank of China announced a total fine of 34.46 million yuan ($4.8 million) for six major Chinese rating agencies. This includes S&P Credit Ratings (China).
These measures are said to get related to the rating firms expressing the real status of China’s economy that the CCP disliked. The People’s Bank of China penalized the agencies, including China Chengxin International, Shanghai New Century Credit Rating, S&P China, China Securities Pengyuan, Lianhe Credit Rating, and Far East Credit Rating. Infractions ranged from failing to conduct credit rating business according to the law to violation of independence requirements and the principle of consistency.
The stock market drifted in response to the news of the fines. The Shanghai Stock Exchange Index and the ChiNext Index both fell. More than 5,100 stocks in the two markets experienced losses, with fears of over 200 being delisted from China’s two exchanges. Mr. Liang, a former chief compliance officer in a Chinese asset management company, has mentioned the economic indicators that point to the real state of China’s economy, not being able to be forged.
Due to the heavy fines, Taiwanese economist Huang Shicong believes they serve to keep the rating agencies from publishing negative analytical reports on the Chinese stock market and national ratings. On Feb. 2, Chinese investors flooded the social media account of the U.S. Embassy in China on Weibo, posting messages and asking for aid in the stock market situation and even sending aircraft carriers over.