BEIJING — China has issued a circular to promote the development of credit rating businesses in the bond market to facilitate the healthy growth of the market.

Credit rating institutions should improve their rating methodology systems, said the circular jointly issued by the People's Bank of China, the National Development and Reform Commission, the Ministry of Finance, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission.

The circular requires these institutions to establish and use rating methodology systems that can achieve reasonable differentiation by the end of 2022 to effectively improve the quality of ratings.

It also requires the institutions to fine-tune corporate governance and internal control mechanisms and ensure the independence of ratings while enhancing information disclosure.

China will optimize the rating ecology and create a fair and just market environment while strengthening supervision on credit rating agencies, said the circular.

The country will promote the opening-up of the industry, supporting qualified overseas credit rating agencies to conduct business in China's bond market while encouraging domestic agencies to actively participate in international rating businesses as per their willingness and ability.