A recent report by Dagong Global Credit Rating Co Ltd on the sovereign debt status of some 50 countries marks an important first step by a ratings agency from a developing country to come up with a global credit ratings review independent of Moody's, Standard & Poor's (S&P) and Fitch, the world's three ratings giants.

Like the country's efforts to internationalize its currency, this move symbolizes another major step by China toward increasing its influence in the global financial market and acquiring global financial dominance.

Ever since the global financial crisis, quite a few financial derivatives rated highly by the three US-led ratings agencies have turned worthless. Due to their firm and long-held belief in the authority of the three ratings agencies, a number of Chinese overseas investors chose to buy these "top-notch" financial products in past years. As a result, their hard-won overseas investments either turned worthless or depreciated considerably in value during the global financial crisis.

Some asset investments, although remaining unchanged in value, also failed to become liquid enough to play its due role in boosting China's economic development.

Therefore, an independent credit ratings agency should be primarily aimed at breaking the established monopoly of US ratings agencies over the global credit ratings business.

An unchallenged monopoly will increase the possibility of US ratings agencies intentionally underestimating or ignoring the potential risks of American financial institutions in order to expand their market shares, even at the cost of hurting the interests of foreign investors.

Due to past practices, Moody's, S&P and Fitch have lost credibility in the eyes of many nations. At a time when the sovereign debt crisis hit Greece, and European countries went all out to prevent the crisis from spreading to other EU nations, the three US ratings agencies chose to add fuel to the fire by repeatedly lowering their ratings of Greece's and other debt-plagued European nations' sovereign debt.

As a result, these debt-ridden European nations faced a drastic rise in financing costs leading to some of them completely losing such financing ability. Also, the lowered credit ratings by Moody's, S&P and Fitch made investors extremely panicky and caused them to sell euros on a large scale. This was essentially equivalent to helping US hedge funds short-sell euros to profiteer at zero-cost risk.