(Yicai Global) Oct. 26 -- Fitch Ratings has established Fitch (China) Bohua Credit Ratings to serve China's onshore bond market, appointing Danny Chen as its inaugural chief executive, the New York-based firm said in a statement yesterday.

"I'm delighted to be part of the team and excited to help develop and internationalize China's domestic capital market. While Fitch Bohua is independent and separate from Fitch Ratings, we will adopt the same high standards in credit ratings methodology, criteria, and processes in line with the parent company's and international best practice," Chen said.

Formed in Beijing in July, Fitch Bohua is the company's wholly-owned unit and will rate the creditworthiness of structured financing and financial concerns, including banks, non-bank financial institutions and insurance companies in its startup phase, according to Fitch Ratings' official website.

Chen formerly served as general manager of Shandong province-based Qingdao Conson Financial Holdings, the first state-owned financial holding company in Qingdao city, and chief credit officer and chief rating officer of Beijing-based China Lianhe Credit Rating, in which Fitch Ratings formerly held a 49 percent stake.

"Under Chen's leadership and with the investments we have made, we are confident Fitch Bohua will become a successful company highly respected by market participants," said Kwong Li, head of the firm's Asia-Pacific business operations.

The Chinese bond market has further opened to the outside world, and new rules for participation by overseas institutions in the domestic rating sector have also been implemented.

China cancelled the access restrictions of foreign investment in the 'credit investigation and rating' category in the service sector in June last year. China's self-regulatory trade group the National Association of Financial Market Institutional Investors issued documents announcing it would accept registration applications from foreign rating agencies on March 27.

"Fitch was the first international rating agency to set up an office in the country in Beijing in 1997, and we are among the first to position ourselves for the onshore rating business - having divested our Chinese joint venture earlier this year," Li noted.

Fitch Bohua has formed a team of analysts, business development and support staff. Other personnel will also be on the job soon, per the company's plan.

Editor: Ben Armour