China should reduce its reliance on overseas ratings companies by encouraging large financial institutions to strengthen their research and make their own judgements, People’s Bank of China Governor Zhou Xiaochuan (周小川) said.
The nation is also considering establishing credit-rating companies backed by the government, Zhou said at a financial forum in Beijing yesterday. A copy of his speech transcript was posted on financial news portal hexun.com.
Zhou’s remarks reflect China’s desire to seek alternatives to the top-three global ratings companies amid skepticism among officials about the firms’ independence.
The nation set up its first ratings company that makes investors rather than borrowers pay, called China Credit Rating Co, in September last year.
“With the rapid expansion in China’s bond market, we need ratings companies that are familiar with the Chinese situation,” said Lu Zhengwei (魯政委), Shanghai-based chief economist at Industrial Bank Co, who was rated the nation’s best analyst last year by China Business News newspaper. “We see comments from ratings companies during this round of the crisis have influenced the financial market to a large degree. It’s no surprise China is paying attention to them.”
Overseas ratings companies’ earnings models cause “a strong beneficial alliance between the issuer and the ratings agency that cannot avoid influencing the agency’s independence,” said the National Association of Financial Market Institutional Investors in a draft report seen by Bloomberg in July. The association was formed by the central bank in 2007 to help develop the country’s over-the-counter financial markets.
One possibility for nurturing local ratings companies is to require that a domestic firm also rates a local financial product if one of the international companies does so, Zhou said.
Moody’s Investors Service, Standard & Poor’s and Fitch Ratings are the three biggest ratings companies.
Domestic ratings firms can play a larger role by researching the finances of local or municipal government, an area in which foreign companies lack expertise, he said.
The State Council, China’s Cabinet, has designated the central bank to regulate the country’s credit-rating companies, making it the sole regulator of the industry, local media reported last week.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks