context: China has the ambition to become a global financial centre and launched a series of initiatives to internationalise its financial sectors. Introducing international credit rating agencies and inclusion in the Bloomberg Barclays index will improve the recognition of China’s bond markets among overseas investors.
People’s Bank of China announced that Standard & Poor Global (S&P) completed the filing of its wholly-owned Chinese subsidiary on 28 Jan 2019. National Association of Financial Market Institutional Investors (NAFMII) also approved S&P for offering credit rating services in China’s interbank bond market.
Opening up credit rating services to foreign players is key to financial internationalisation, which will satisfy the global demand for RMB-denominated assets and foster improvement of the domestic credit rating industry.
PBoC will continue to promote opening up of the credit rating industry and introduce more internationally influential credit rating agencies into China’s market. At the same time, regulations, market disciplinary mechanisms, and risk disclosure and premiums will be strengthened. The role of credit rating agencies in supporting private enterprises and the real economy should be emphasised.
Meanwhile, on 31 Jan 2019, Bloomberg officially announced that the Chinese bond market will be included in Bloomberg Barclays bond index in April 2019. As of the end of 2018, China’s bond market volume reached C¥86 tn, of which foreign investors held C¥1.8 tn (reflecting 46 percent y-o-y growth).
PBoC welcomes this development and will continue to improve regulatory arrangements and provide a better environment for international investors.