The Chinese government has approved the purchase by international rating agency Moody of a significant stake in China Cheng Xin International (CCXI), the mainland's largest rating agency.

People familiar with the deal told Xinhua Moody will set aside ten million U.S. dollars for a 49-percent stake -- the current upper limit set by the government -- in a joint venture with the CCXI.

The transaction marks the first acquisition in the financial sector following a regulation issued by the Ministry of Commerce in earlier August aimed at standardizing foreign acquisition of domestic assets.

"With the rapid development of China's capital market, the domestic rating business is bound to open wider to the outside considering its critical status in the capital market," said Mao Zhenhua, chairman of CCXI.

The new joint venture would focus on ratings for short-term and long-term financing bonds and some other financial products, as well as commercial banks and insurers in China, said Ye Min, chief executive officer of the joint venture.

Moody, founded in 1900, makes assessments that are recognized worldwide.

CCXI, the first mainland rating agency approved by the People's Bank of China in 1992, is the largest and most influential rating company on the Chinese mainland.

Source: Xinhua