Financial war or culture clash?

Once again, the question of sovereignty pops up in a U.S.-China dispute, this time over credit ratings agencies.

Dagong, in a harshly worded statement posted on its website Sunday, said the SEC was wrong to deny its application because of the commission's inability to conduct cross-border supervision over Dagong, a touchy issue involving national sovereignty.I'm not sure I'd trust the SEC to regulate them anyway, but this will be a consistent area of conflict due to China's very broad definition of a state secret.

The firm's application was denied because "it does not appear possible at this time for Dagong to comply with the record keeping, production and examination requirements of the federal securities laws," the SEC wrote in its order.

Dagong had said that China's securities regulator would have to remove any "state secrets" from Dagong's documents before sending them to the SEC.

Dagong said it aims to enter the U.S. market to protect China's interests as the largest creditor there. As of July, China held $846.7 billion worth of U.S. Treasurys, according to official U.S. data, which doesn't count all of China's holdings.

"As a Chinese credit-rating agency, Dagong has the right to protect the creditor country's interest in the U.S. through rating operations," Dagong said.