The reputation of the big credit-rating agencies took a bashing as a result of their role in the global financial crisis. For these agencies to provide a useful service for investors, they need to have the expertise, independence and courage to make tough calls on the products, companies or indeed nations they rate. So the emergence of a new player in the field with a fresh perspective should be welcomed. But the question is whether the little-known Dagong Global Credit Rating Co. has what it takes to make a difference. Greater transparency will be needed for the mainland company's reports to be taken seriously around the world. The ratings game was discredited by the part played by the big agencies Fitch, Moody's and Standard & Poor's in the financial crisis. They gave AAA ratings to toxic mortgage-backed securities which turned into junk when the US housing market collapsed, prompting the meltdown. Understandably, moves are being made in the US and European Union to put them under regulatory oversight. Their highly profitable assessments have been treated as gospel, but agencies have been accused of having a conflict of interest by giving favourable ratings in return for hefty fees from issuers of bonds and related products. It would make sense for their semi-official status to be removed and for their reports to be stamped 'for reference only'. Dagong's entry to the field is strategic; fresh blood in so damaged an environment is obviously welcome. Beijing has long complained about the relatively poor ratings it has received compared to debt-saddled Western counterparts, so an alternate view is good from its standpoint. As much as another opinion is worthwhile, though, the Chinese company's report doesn't give a sense that circumstances have vastly changed. Its evaluation of sovereign credit and risk of 50 countries ranks China above the US, Japan and Britain. That's not how the other agencies see it. While Dagong rates China's government debt AA-plus, Moody's determines it to be A1, which is four notches below Moody's Aaa US rating. S&P rates China A-plus. Dagong gave China a stable outlook and the US a negative one. In one sense, this seems reasonable. China is sitting on US$2.45 trillion in foreign exchange reserves, far more than any other nation. Butlack of transparency makes assessing the true position of China's banking and financial system challenging to say the least, even for the established ratings agencies. Not even the experts claim to have a clear picture of the amount of non-performing loans in the mainland banking system. Similarly, it is difficult to quantify the massive borrowings of local governments in recent years and gauge what this means for the nation's finances. Unless there is transparency and openness, China's true financial position will remain uncertain. Financial information is of little use unless it's accurate. During uncertain economic times, unreliable data can even be destabilising. That's why the governments, investment banks and independent agencies which provide data and give assessments need to be transparent and factual with their reporting. Ratings issued by agencies have to be independently and objectively worked out. The methodology has to be clearly presented and the data thoroughly scrutinised for accuracy. Doubts have to be resolved. Western agencies' reputations have been damaged and they have much to do to regain confidence in their reporting. Dagong shouldn't think just because it is a Chinese company that it has an easier job.