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China Chengxin Credit Rating Group

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China Chengxin Credit Rating Group
IndustryBond credit ratings
Founded1992[1]
Headquarters
Beijing China Merchants International Financial Center
Beijing
,
China
Key people
Dr. MAO Zhenhua (Chairman)[2]
Owner
WebsiteChina Chengxin Group
China Chengxin International
China Chengxin Securities Rating
China Chengxin Asia Pacific

China Chengxin Credit Rating Group (known as China Chengxin, or CCXI) was founded in Beijing on 8 October 1992 through the incorporation of China Chengxin Credit Management Co Ltd (renamed as China Chengxin Credit Management Co. Ltd. in 2002),[1] which is the first nationwide credit rating company of China.[3] Subsequently, it formed subsidiaries and established branches across China, including China Chengxin International Credit Rating Company Limited (the joint venture credit rating company among China Chengxin Securities Rating Company Limited, Fitch Ratings and International Finance Corporation established in 1999).[4] The share-holder structure of the joint venture company was changed in 2006 when Moody's came in to take over the equity positions of Fitch and the supranational institution.[5] The company is one of the few major credit rating agencies currently operating in China.[6]

According to CCXI's announcement, China Chengxin International Credit Rating Co., Ltd is 30% owned by Moody's Corporation via Moody's China (B.V.I.) Limited, and 70% owned by Beijing Zhixiang Information Management Consulting Co., Ltd, which is believed as ultimately owned by Mr. Mao Zhenhua and his family through a complex holding structure. [7]

China Chengxin Credit Management Co. Ltd. went to Hong Kong to set up its subsidiary, China Chengxin (Asia Pacific) Credit Ratings Company Limited, which received the Type Ten License from Hong Kong Securities and Futures Commission on 28 June 2012 and was an internationalization attempt after Dagong Global's expansion into the United States in 2010, which was considered eventually failed partially for political causes.[8][9]

China Chengxin Credit Rating Group has branches and subsidiaries operating in Beijing, Shanghai, Hong Kong, Shenzhen, Fujian, Wuhan, Shandong, Liaoning, Tianjin, Jiangsu, Zhejiang, Shanxi and Shaanxi.[10] In 2024, the number of CCXI's existing offices are 5, namely Beijing, Shanghai, Wuhan, Shenzhen and Hong Kong. [11]

History

[edit]

1992–1999: Founding period

In 1992, encouraged by the talks of the then Chinese leader Deng Xiaoping during his tour to the southern China, MAO Zhenhua, like many young people of China, started his private venture to form a credit rating company.[12] Upon the approval given by People's Bank of China, MAO was successful in establishing the first Chinese credit rating company, China Chengxin Securities Credit Rating Company Limited under the Chinese corporation rules and regulations.[1]

The company worked out the first set of credit rating system and methodology in China, which was assessed and accredited by the group of experts from the Finance and Economic Committee and Law Committee under the People's Congress, People's Bank of China, National Planning Commission, banks and securities house. [citation needed]

1999–2005 Take-off period

As the Chinese capital markets had just started growing, IFC, an agencies of World Bank Group, made efforts to help the Chinese capital markets to develop, including the establishment of an effective and efficient credit rating industry. After several years’ endeavour, this supranational institution succeeded in pulling together China Chengxin Securities Credit Rating Company, Fitch IBCA (now Fitch Ratings) and itself to form China's first credit rating joint venture company, China Chengxin International Credit Rating Company Limited in August 1999.[4]

2006–2011 Advancing period

The Chinese capital markets were further reformed in 2005, leading to the fast development of the debt market. Moody's moved in to buy up to the regulatory cap of 49% share of China Chengxin International Credit Rating Company Limited from the local share-holders in September 2006. Moody's added additional management and technical support on rating methodologies and training of analysts to the joint venture company.[13]

China Chengxin Securities Credit Rating Company Limited was renamed as China Chengxin Credit Management Company Limited to turn it into a holding company of all subsidiaries and branches formed or to be formed. Subsequently, China Chengxin Credit Rating Management Company Limited has subsidiaries and branches providing credit rating services in Beijing, Shanghai, Hong Kong, Shenzhen, Fujian, Wuhan, Shandong, Liaoning, Tianjin, Jiangsu, Zhejiang and Shanxi.

Owing to its first comer status and expertise acquired from the two international credit rating agencies, respectively. The China Chengxin Credit Rating Group can always capture the largest overall market share in the domestic market.[citation needed]

2012– Going out

Following the trend of internationalization of the Chinese currency, China Chengxin Credit Management Company Limited established its subsidiary in Hong Kong, China Chengxin (Asia Pacific) Credit Ratings Company Limited, which received the Type Ten License from Hong Kong Securities and Futures Commission on 28 June 2012, thus became the first Chinese credit rating company going out of the Chinese mainland to do credit rating business in the international capital markets.[14]

China Chengxin (Asia Pacific)

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On 28 June 2012, China Chengxin (Asia Pacific) Credit Ratings Company Limited (“CCXAP”) was successful in applying for the type ten operating licence from Hong Kong Securities and Futures Commission, thus, became the first licensed Chinese credit rating agency to operate in the international credit rating market.

Suspension of License in China

[edit]

On 29 December 2020, CCXI was suspended by NAFMII, [15]a Chinese interbank market regulator, for three months out of a high-profile bond default case of Yongcheng Coal & Electricity Holding Group. The Chinese regulator discovered that China Chengxin had failed to properly conduct on-site due diligence on Yongcheng or adequately disclose risks, and urged the rating agency to take corrective steps.

During the suspension, CCXI is not allowed to conduct new rating business for debt financing instruments.

In 2024, CCXI is allegedly under an on-going investigation by China Securities Regulatory Commission amongst financial intermediaries who provided financial services to Evergrande Group. According to public information, CCXI assigned "AAA" ratings to five bonds issued by Evergrande since 2020. [16] [17] [18]

As the Evergrande scandal continue to ferment,[19] on 5 July 2024, the Office of the State Council of China published "Opinions on Further Improving the Comprehensive Punishment and Prevention of Financial Fraud in the Capital Market", issued jointly by the China Securities Regulatory Commission , Ministry of Public Security (China), Ministry of Finance (China), People's Bank of China, National Financial Regulatory Administration (China) and State Asset Supervision and Administration Committee of the State Council. The article 15 states "Strengthen the “gatekeeper” responsibilities of intermediaries. .... Improve the credit records of intermediary agencies and employees, and urge relevant agencies and personnel to be diligent and responsible. Intermediaries that have committed serious violations of laws and regulations shall be suspended or prohibited from engaging in securities service business in accordance with the law, and systems such as revocation of practice licenses and prohibition of employees shall be strictly implemented."[20] While the Evergrande-related investigation to CCXI is on-going and not yet concluded, the Chinese public is expecting the intermediary responsibility to enforced in a strong hand manner after the announcement. [21]

Ultimate Owner of CCXI

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According to Wuhan University's alumni page,[22] Mao Zhenhua was born in 1964 in Shishou, Hubei. He received his bachelor degree from economics department of School of Economics and Management, Wuhan University in 1983. He was awarded the doctoral degree in economics from Wuhan University in 1996.

Allegedly, in the early age of Mao's business career, he had been detained and subject to official investigation for 8 months.[23]

Regulatory approval and membership

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China Chengxin Credit Rating Groups' subsidies and branches obtained license from all the regulators in China such as People's Bank of China, China Insurance Regulatory Commission, National Development and Reform Commission and China Securities Regulatory Commission.

China

Hong Kong

  • 2012 SFC Type 10: Providing credit rating services[28]

Sovereign credit rating

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After rating agency Dagong Global Credit Rating first to issue sovereign ratings in 2010, CCXI as the second rating agency in China released its sovereign credit rating report for 30 countries in July 2012, as follows:.[29]

Country Rating Outlook Date Ref.
 Argentina 05CCCg Negative 2014-07 [30]
 Australia 19AAAg Stable 2012-07 [30]
 Brazil 12BBBg+ Stable 2012-07 [30]
 Canada 19AAAg+ Stable 2012-07 [30]
 China 17AAg+ Stable 2012-07 [30]
 Denmark 17AAg+ Stable 2012-07 [30]
 France 16AAg Stable 2012-07 [30]
 Germany 17AAg+ Stable 2012-07 [30]
 Greece 01CCCg Stable 2014-04 [30]
 India 11BBBg Stable 2012-07 [30]
 Indonesia 10BBBg- Stable 2012-07 [30]
 Ireland 10BBBg- Negative 2012-07 [30]
 Italy 11BBBg Stable 2013-03 [31]
 Japan 18AAg+ Stable 2012-07 [30]
 Mexico 12BBBg+ Stable 2012-07 [30]
 Netherlands 18AAg+ Stable 2012-07 [30]
 Norway 19AAAg Stable 2012-07 [30]
 Portugal 07BBg- Negative 2012-07 [30]
 Russia 14Ag Stable 2012-07 [30]
 Saudi Arabia 18AAg+ Stable 2013-07 [30]
 Singapore 19AAAg Stable 2013-07 [30]
 South Africa 14Ag Stable 2013-07 [30]
 South Korea 16AAg- Stable 2013-07 [30]
 Spain 09BBg+ Negative 2013-03 [32]
  Switzerland 19AAAg+ Stable 2012-07 [30]
 Thailand 12BBBg+ Stable 2012-07 [30]
 Turkey 08BBg Stable 2012-07 [30]
 United Kingdom 18AAg+ Stable 2013-03 [33]
 United States of America 19AAAg Stable 2012-07 [30]

References

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  1. ^ a b c Benton E. Gup (20 July 2006). Capital Markets, Globalization, and Economic Development. Springer. pp. 200–. ISBN 978-0-387-24563-8. Retrieved 2 August 2013.
  2. ^ "China Chengxin Corp Website".
  3. ^ Katie Hunt (31 October 2012). "China ratings firms challenge US dominance". BBC.
  4. ^ a b "Fitch IBCA Announces Rating Joint Venture in Beijing". Fitch IBCA. Retrieved 11 April 2013.
  5. ^ Moody's Corp. "CCXI".
  6. ^ K. Thomas Liaw (1 November 2011). The Business of Investment Banking: A Comprehensive Overview. John Wiley & Sons. p. 352. ISBN 978-1-118-00449-4. Retrieved 2 August 2013.
  7. ^ "CCXI Shareholding Structure" (PDF).
  8. ^ "Hong Kong's role as China's global financial centre attracts China Chengxin credit rating company to set up". InvestHK. 31 July 2012. Archived from the original on 30 December 2013. Retrieved 30 December 2013.
  9. ^ sina_mobile (2010-09-25). "大公国际：不接受任何出让国家主权为条件的评级". finance.sina.cn. Retrieved 2024-06-26.
  10. ^ "分支机构". CCX. Archived from the original on 22 August 2015. Retrieved 2 Aug 2013.
  11. ^ CCXI Official Website. 12 July 2024 https://www.ccxi.com.cn/aboutus/contactus. {{cite web}}: Missing or empty |title= (help)
  12. ^ "92派官員下海20年盤點:有人成富豪有人被判刑". Takungpag. Retrieved 15 Aug 2013.
  13. ^ "Moody's acquires 49 pct stake in Chinese rating agency". People Daily. Retrieved 11 April 2013.
  14. ^ "Hong Kong's role as China's global financial centre attracts China Chengxin credit rating company to set up (with photo)". Hong Kong Government News. Retrieved 3 April 2013.
  15. ^ "China regulator suspends Moody's Chinese joint venure over Yongcheng default". The Straits Times. 2020-12-30. ISSN 0585-3923. Retrieved 2024-06-26.
  16. ^ "证监会对恒大地产债券欺诈发行及信披违法案作出处罚决定". www.stcn.com. Retrieved 2024-06-26.
  17. ^ "中诚信国际为什么给恒大地产AAA的最高信用评级？_腾讯新闻". new.qq.com. Retrieved 2024-06-27.
  18. ^ sina_mobile (2024-03-22). "恒大地产涉嫌欺诈发债208亿 中信建投等四头部中介牵涉其中该担何责". finance.sina.cn. Retrieved 2024-06-27.
  19. ^ "今日信報 - 要聞 - 中證監夥公安等嚴懲財務造假". 信報網站 hkej.com (in Chinese (Hong Kong)). Retrieved 2024-07-12.
  20. ^ 马娟. "国务院办公厅转发中国证监会等部门《关于进一步做好资本市场财务造假综合惩防工作的意见》的通知_证券_中国政府网". www.gov.cn. Retrieved 2024-07-12.
  21. ^ "法治日报--2024年07月12日--经济法治--财务造假将面临"三位一体"立体化追责". epaper.legaldaily.com.cn. Retrieved 2024-07-12.
  22. ^ "Mao Zhenhua-Wuhan University". en.whu.edu.cn. Retrieved 2024-06-26.
  23. ^ sina_mobile (2018-01-03). "被双规过的毛振华 咋敢又闹事儿？". finance.sina.cn. Retrieved 2024-06-26.
  24. ^ a b c d "脆弱的评级". Finance World. Jan 2012. Archived from the original on 22 January 2013. Retrieved 19 April 2013.
  25. ^ "中国证券监督管理委员会关于核准中诚信证券评估有限公司从事证券市场资信评级业务的批复". 教育频道. Archived from the original on 30 December 2013. Retrieved 19 April 2013.
  26. ^ "证券评级机构信息公示". SAC. Retrieved 19 April 2013.[permanent dead link]
  27. ^ 中介机构>评级机构>"会员分类>中介机构>评级机构". NAFMII. Archived from the original on 5 February 2013. Retrieved 19 April 2013.
  28. ^ "Public Register of Licensed Persons and Registered Institutions". SFC. Retrieved 19 April 2013.
  29. ^ Jia, Chen (2012-08-01). "Mainland credit rating agency opens HK arm". China Daily. Retrieved 19 April 2013.
  30. ^ a b c d e f g h i j k l m n o p q r s t u v w x y z "中诚信国际信用评级有限责任公司". Ccxi.com.cn. 2012-08-15. Archived from the original on 2014-01-03. Retrieved 2014-01-05.
  31. ^ "中诚信国际：意大利政治不确定性对其主权信用带来负面影响". 中诚信国际. Archived from the original on 25 April 2013. Retrieved 19 April 2013.
  32. ^ "中诚信国际：西班牙主权评级维持BBg+，评级展望由稳定调为负面". 中诚信国际. Archived from the original on 25 April 2013. Retrieved 19 April 2013.
  33. ^ "中诚信国际：下调英国主权评级至AAg+，评级展望为稳定". 中诚信国际. Archived from the original on 25 April 2013. Retrieved 19 April 2013.
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