BEIJING, Sept. 27 (Xinhua) -- China's leading credit rating agency Dagong said Thursday that the third round of quantitative easing implemented by the United States signals the country's deepening credit crisis and dropping solvency.
Dagong Global Credit Rating Co., Ltd. said in a statement commenting on the U.S.'s third round of quantitative easing, also known as the QE3, that the policy cannot promote the country's economic recovery and may further worsen its macroeconomic environment in the mid- and long-terms.
Dagong said the QE3 cannot alleviate the private sector's debt burden in a short time and rid the financial system of excessive liquidity, and, thus, will not serve to provide new impetus for economic growth.
The policy will also weaken the private sector's willingness to save and will drive up international commodity prices, Dagong said.
"It will plunge the country's economy into a long-term recession, create reliance on loose monetary policy and expansionary fiscal policy, and lead to a rising debt burden and increased credit risks," Dagong said.
The open-ended QE3 signals a drop in the country's solvency and has caused the continuous decline in its national credit, it said.
On Sept. 13, the U.S. Federal Reserve announced a new round of bond-buying program and extended the duration of its ultra-low interest rates to bolster the country's weak economic recovery.