Rating Agency From China Downgrades America, Western Nations

In the opinion of China-based Dagong Global Credit Rating Co, Western nations, including the United States, are no longer worthy of their prior AAA ratings, and have all been downgraded as a result.

Major Western countries like the U.S., Germany, Britain and France were downgraded from AAA to lower levels.

The U.S. was dropped to AA, while Britain and France were cut to AA-. Germany was the best of all of them (larger countries), enjoying a AA+ rating from Dagong, the top credit rating agency in China.

Resource-rich countries like Australia and New Zealand remained at AAA, while Canada was listed at AA+. Others retaining AAA credit ratings were Denmark, Norway and Switzerland.

Economies like Spain, Italy and Belgium were downgraded to A- by Dagong.

"The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability," said Dagong chairman Guan Jianzhong.

Dagong states it has a goal of being a counter-weight to agencies in the West, and want to "correct the defects" of the current system.

China to Offer Stimulus Package of $585 Billion over Next Two Years

While China will continue to grow at a rate enviable by most other nations, it has decided to offer their own version of a stimulus package in their own country worth over $585 billion.

China's growth is estimated to be at about 8.5 percent next year, down by 3 percent from last year.

Most of the package will target ten key areas in the country, and will focus on "transportation, rural infrastructure, low-income housing, electricity and water. Some of the funds will also be used to build up areas ravaged from natural disasters, particularly the May earthquake in the Sichuan province."

This is being done in an effort to strengthen the domestic market, as the country has primarily relied on exports for the majority of their past growth. That is what is slowing down, so they're going to prop things up until exports start to perform strongly again, which could take a couple years.

In an effort to generate more liquidity in the markets, China is also removing commercial bank ceilings in order to loosen up credit for rurul areas, technological innovation, small business and industrial mergers and acquisitions.

Another area they're targeting is their value-added tax, which will dramatically cut back on business costs to the tune of about $17.5 billion.