China Market Access: S&P gets PBOC approval to rate Chinese domestic bonds

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As part of China's drive to open-up its markets further, the nation's Central Bank has given the green light to Standard & Poor's, making it the very first foreign ratings firm to enter China's market. What does this move indicate, and what changes will it bring to the country's financial market? CGTN reporter Zou Yun has the story.

Another big move towards opening up China's financial market. In the past, foreign ratings agencies had to work with Chinese partners as joint ventures. Now they are permitted to compete on equal footing with Chinese domestic companies. Standard & Poor's Global ratings becomes the first of the major global rating agencies to win approval for a fully owned business in China.

SIMON JIN, CEO S&P GLOBAL(CHINA)RATINGS "The financial regulators in China have long had a thoughtful approach to the development of China's financial markets. The approval of S&P global rating's entry to the credit rating markets is the latest step in China's commitment and strategy to further open up its markets."

China's financial market has seen tremendous growth over the past decade. Its bond market has become the 3rd largest worldwide, with an aggregate balance exceeding 12.5 trillion US dollars. S&P Global Ratings sees lucrative opportunities in this market, and is preparing extensively to start the rating business.

SIMON JIN, CEO S&P GLOBAL(CHINA)RATINGS "Under the regulatory approval, we are permitted to rate financial institutions, corporates, and structured finance and panda bonds in interbank bond markets. We are prepared and ready to issue ratings to Chinese corporates in the near future."

China's Central Bank says allowing global raters independently into the market is of great importance.

Bank executives say this helps meet the needs of international investors in diversifying yuan-denominated assets, and improves the quality of China's ratings industry. And for Standard & Poor's, they are confident they'll win a role in this market.

SIMON JIN, CEO S&P GLOBAL(CHINA)RATINGS "We are known for providing independent, transparent ratings around the world. The market participates, the regulators known what we stand for. We are confident with our experience and reputation; we will be successful in the market."

ZOU YUN BEIJING "The Chinese government says it's going to continue to support the entry of influential and qualified foreign rating agencies into the Chinese market. A move that experts believe will help bring international standards into the rating process of domestic bonds and usher more international investors into China's financial market. Zou Yun, CGTN, BJ."