When AAA Means Something Different in Chinese

When is a AAA-rated asset not worth very much? In 2008 the answer turned out to be, when the asset is a mortgage-backed security declared AAA by a U.S. ratings company. This year the answer could be, when the issuer is a Chinese state-owned enterprise, and the AAA is applied by a Chinese ratings company.

In China, around half of onshore corporate bonds are rated that high; in the U.S., S&P Global currently rates just Microsoft and Johnson & Johnson AAA.

Chinese…