Credit rating services can boost Belt and Road capital

When investors wonder what the Belt and Road Initiative can bring about, credit rating services can help boost capital for projects along the routes, especially during the early phase, according to the chairman of Dagong Global Credit Group.

"A transparent platform with credit rating services can help break the financial bottlenecks of the Belt and Road initiative, because information asymmetry puts the brakes on cross-border capital flows, especially during the early stages, while implementing the initiative," Guan Jianzhong, chairman of the 23-year-old credit rating agency, told China Daily on Tuesday.

Guan said infrastructural projects and other types of projects along the routes are expected to generate massive lending needs in the future and will bring more investment opportunities for investors from different places.

"Because the initiative was just launched not very long ago, it can be risky for investors, especially when they send money abroad. Resolving the information asymmetry problem faced by investors is something that needs to be resolved in the short-run," he said.

Guan said objective analysis and independent assessments are particularly important for the initiative's future implementation, because globalization has presented challenges to investors who need to analyze risks associated with foreign and domestic investments.

"Digital online services might be an efficient way to bridge investors and a certain country or a security issued by a company from a certain country along the routes," he said.

The credit rating agency on Tuesday launched the Silk Road IT Fin website. Its mission is to offer credit rating-based investment services to countries and regions participating in the Belt and Road Program.

The website is the first providing credit rating services covering regions along the initiative.

Guan said the website is part of the agency's vision to expand business worldwide.

"We have spoken to local governments and companies in some countries along the routes," Guan said. "Priorities will be given to serve the Belt and Road Initiative, but we do not have geographical restrictions. Services will be expanded to cover other regions in the future."