Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The China - Latin America and the Caribbean Community (CELAC) cooperation has entered a new stage, with deepening political mutual trust and expanding economic and trade cooperation. The issuance of panda bonds is an important direction for financial cooperation between the two sides, but attention should be paid to the sovereign credit risks in Latin America and the construction of a new sovereign credit rating system [1][2][6][10]. 3. Summary by Relevant Catalogs 3.1 China - Latin America Cooperation Enters a New Stage - On May 13, 2025, the Fourth Ministerial Meeting of the China - CELAC Forum was held in Beijing. On May 14, a seminar on China - Latin America panda bonds was held, with representatives from China and Brazil participating [1]. - Latin America is rich in resources and strategically important. In 2024, the bilateral trade volume between China and Latin America reached $500 billion. By the end of 2023, China's direct investment stock in Latin America was $600.8 billion. China has 5 free - trade partners in Latin America, and the free - trade dividends are constantly emerging [2]. - China's political relations with Latin American countries have been upgraded. China has proposed initiatives that are increasingly recognized by Latin American countries, and more than 20 countries have signed Belt and Road cooperation memorandums with China [4]. 3.2 Promising Prospect of China - Latin America Panda Bond Cooperation - In 2024, 44 entities issued 109 panda bonds with a total issuance scale of 194.8 billion yuan, a year - on - year increase of 26.1%. The proportion of overseas investors increased significantly to nearly 50% [6]. - In November 2024, the first panda bond issued by a Latin American entity was successfully issued, setting a benchmark for more Latin American issuers [6][7]. - Chinese rating agencies play an important role in bridging information asymmetry between overseas issuers and domestic investors. However, they need to innovate rating methods due to the limitations of local ratings and geopolitical changes [9]. 3.3 Attention to Sovereign Credit Risks in Latin America - Sovereign credit risk is an important factor affecting Latin American entities' issuance of panda bonds. The deepening of China - Latin America political mutual trust and cooperation helps improve the sovereign credit strength of Latin American economies in RMB terms [10]. - In 2025, Latin American economic growth is expected to slow from 2.4% in 2024 to 2.0%. Different countries face various challenges: Brazil has fiscal problems; Mexico is affected by the US economy; Argentina has high inflation and debt; Chile is at risk of relying on single - resource exports; and Colombia has fiscal and political uncertainties [11].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The traditional sovereign credit rating system dominated by Moody's, S&P, and Fitch has significant limitations, and its lag and political bias are increasingly prominent with the profound changes in the global geopolitical and economic landscape. To build a global, fair, and comprehensive rating system, reforms in three aspects are needed: reconstructing the global governance evaluation system, focusing on the adaptability of the monetary system, and systematically integrating geopolitical and sustainable impacts [6][7]. 3. Summary According to the Table of Contents 3.1 Sovereign Credit Rating Significance and Impact of Three Major Sovereign Rating Actions - Sovereign credit is an important part of the global credit system. Sovereign credit rating measures a country's ability and willingness to repay debts, providing standardized assessments of national credit risks for global investors and influencing a country's financing costs and international capital flows [8]. - Moody's, S&P, and Fitch dominate the global sovereign credit rating market. Their rating methods have evolved with the development of the US capital market and globalization, and major adjustments occurred after the European debt crisis [8][9]. - A downgrade in sovereign rating can cause financial market fluctuations, capital outflows, and increase overseas financing costs. However, after the European debt crisis, the impact of rating actions on a country's capital market and overseas financing has weakened [9]. 3.2 Characteristics and Deficiencies of Three Major Sovereign Credit Rating Methods - The core underlying elements of the three major sovereign rating methods are highly similar, with higher complexity and comprehensiveness. They cover multiple dimensions and use structured calculation methods, and the final ratings may be adjusted by expert judgment [10]. - The evaluation of institutional and governance strength in the three major ratings gives high weight but uses unfair standards, mainly referring to the World Bank's WGI, which may lead to misunderstandings or underestimations of the governance levels of developing countries [11][13][14]. - The three major rating agencies use "international currency" as an evaluation criterion, but the current system fails to fully reflect the decline of traditional international currencies and the rise of the RMB, which is unfavorable to emerging markets and developing economies [17]. 3.3 New Features of the Global Geopolitical and Economic Landscape and Ideas for Building a New Sovereign Rating System 3.3.1 New Features of the Global Geopolitical and Economic Landscape - The overall strength of Western countries and the governance effectiveness of "Western democracy" are declining, while late - developing countries show significant governance performance [19]. - The international monetary system is being reconstructed, with the weakening of traditional currencies and the rise of emerging currencies [19]. - The geopolitical pattern is moving towards multi - polarization, and the influence of emerging economies is increasing [19]. - Sustainable development has become a core issue, and ESG factors will reconstruct the sovereign credit risk evaluation framework [19]. 3.3.2 Ideas for Building a New Sovereign Rating System - Developing countries should build an independent governance evaluation system, promote information sharing, and create a globally comparable institutional governance evaluation system [19][21]. - A multi - dimensional evaluation framework covering the relative change of currency international status, multi - currency reserve structure, and financial security mechanisms should be constructed to improve the forward - looking and applicability of sovereign credit analysis [22][25][26]. - Geopolitical risks should be systematically included in the sovereign rating framework, and the geopolitical radiation ability of the rating subject should be evaluated [27][29][30]. - ESG and other sustainable factors will reconstruct the sovereign credit risk evaluation framework from multiple dimensions and affect future international competition rules [31].