China issued draft rules on Sunday to improve its credit rating business following a series of defaults by highly rated state-owned companies that disrupted the country's $4.4 trillion corporate bond market.

  Late last year, five investment-graded state-backed companies – including a coal manufacturer in central China's Henan Province and automobile giant Brilliance Auto – have defaulted for the first time in the onshore bond market, resulting in a bond market sell-off.

  China's credit rating agencies are urged to boost consistency, accuracy, and timeliness of credit rating, and build a quality inspection system using default ratio at the core, according to rules jointly published by five government agencies.

  The central bank, the finance ministry, the national economic planner, the securities regulator and the banking and insurance regulator urge rating agencies to improve their credit rating models, strengthen corporate governance and bolster information disclosure.

  The rules will shift more burden on rating agencies, and "guide them to see reputation as the basis of their very existence," according to the statement.

  Source: CGTN