Expectation: Performance gap of Chinese credit rating agencies

Credit Rating Agencies (CRAs) in developed countries, as
independent agencies, have provided rating services for over
a century and are consequently highly experienced. However,
domestic Chinese CRAs have only operated since 1987.
The aim of this seedcorn project is to evaluate stakeholders’
expectation of CRAs in China and their perceived performance. The
difference between expectations and performance is termed the
“Expectation – Performance Gap” (E-P Gap).
An objective of this research is to identify the components of the E-P
Gap. This gap has three components:
• the knowledge gap, representing stakeholders understanding of
the Chinese financial market;
• the regulation gap, reflecting the ability of existing Chinese
financial regulations, guidelines and policies to meet stakeholder
expectations;
• the performance gap, representing perceptions of defective
performance by CRAs.
This pilot study undertook interviews with 22 stakeholders from four
different groups: CRAs; financial market users of CRA information;
non-financial market users of CRA information; and debt issuers. A
questionnaire was also developed to calibrate the E-P Gap.