FITCH has became the second global ratings agency to receive approval to rate China’s domestic bond market, in what the country’s central bank said was part of its implementation of the Phase 1 trade deal with the United States.

The People’s Bank of China (PBOC) said in a statement late Thursday it had approved Fitch Bohua Credit Ratings Ltd., a wholly owned subsidiary of Fitch Ratings, to operate in China’s US$13 trillion onshore bond market.

The National Association of Financial Market Institutional Investors (NAFMII), the interbank market regulator, had also approved Fitch Bohua’s registration to rate bonds in the interbank market, the PBOC said.

The moves were “concrete implementations” of last year’s U.S. trade deal, the PBOC said.

It would continue to promote the “high-level” opening of the credit rating sector and also wanted rating agencies to play a bigger role in guarding against financial risks and improve the financing environment for the country’s small and medium-sized companies.

China first pledged to open its ratings market to foreign agencies in May 2017 following trade talks between China and the then-new Trump administration in Washington.

S&P Global has become the first foreign agency to be given the green light, following its approval in January last year.

“We are very excited. We put the application in back in November 2018 and we have been waiting a long time,” said Ian Linnell, president of Fitch Ratings.

“The Chinese domestic bond market is a huge market — probably the second-biggest bond market in the world now.”

(SD-Agencies)