A leading Chinese private credit rating firm has accused US securities authorities of being biased in turning down its bid to become a recognized bond rater in the country.

The Beijing-based Dagong Global Credit Rating Co vowed that it would reserve the right to seek legal action against the decision by the US Securities and Exchange Commission (SEC).

In a statement on its website Saturday, Dagong Global said its bid to become a Nationally Recognized Statistical Rating Organization (NRSRO) in the US complies with all laws and rules, and the contention by US authorities that they are unable to perform cross-border supervision of Dagong amounts to bias against Chinese credit-rating agencies.

"Dagong will not accept the NRSRO status at the price of sacrificing national sovereignty," the company added.

The SEC rejected Dagong Global's application Thursday because the company's propos-al to have the China Securities Regulatory Commission manage all correspondence with the SEC will not "comply with record keeping, production, and examination requirements of the federal securities laws."

The SEC was quoted by a Wall Street Journal report as saying that the fact that Dagong is not a US-based firm was not an issue.

The SEC has granted NRSRO status to 10 ratings firms, including US-based Moody's and Standard & Poor's, as well as Fitch Ratings, part of Fimalac SA, based in France, and DBRS Inc., based in Canada, the report said.

However, Dagong's statement said the SEC has never used "cross-border supervision" as an essential assessment criteria to reject any application and has performed "cross-border supervision" on three other foreign credit raters.

Dagong said the SEC has unreasonably rejected the application that met all the criteria. It is not only against the rules of the US' Securities Exchange Act, the law regarding the oversight of registered credit rating agencies and related international rules and laws, but also resulted in a huge loss for Dagong.

Dagong will consider moving to protect its rights, including seeking legal action against the SEC's decision, the statement said.

Tian Jinghai, vice president of Dagong Global Credit Rating, told the Global Times Sunday that, as China is the US' biggest creditor, it is important for China to have a presence in the US rating market to safeguard the security of China's assets overseas.

China's holdings of US Treasury bonds reached $846.7 billion in July.

US rating firms have been widely criticized by the international community for giving overly positive grades to US mortgage-related investments, and for their failure to disclose risks. A triple-A status of US treasury securities ensures that it can continue selling debt to other countries at a low cost.

"Dagong will continue to make efforts to go global," Tian said. "But we will also tap the Chinese market."

In China, almost 70 percent of rating firms are tied to US firms, meaning the US dominates the Chinese rating market, he said.

In July, Dagong published China's first sovereign credit -rating report, which gave China's government a higher debt rating than the US, Britain or Japan.

Jiang Yong, an economic security researcher at the China Institutes of Contemporary International Relations, told the Global Times that cross-border supervision is unacceptable because it violates national sovereignty.

"It's only the SEC's excuse for preventing Dagong from entering the US market," Jiang said, adding it is "obvious bias" against foreign firms, and the US is reluctant to have its financial superiority challenged, especially since the global financial crisis.

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that cracking other countries' markets is not the only way forward for Chinese credit-rating firms.

"Developing China's financial market and attracting foreign enterprises to issue bonds in China is more important," Mei said.

Approving Chinese firms to enter the US market may benefit the US economy because more and more Chinese investors are looking for opportunities in the overseas market, and a Chinese rating firm in the US with good credibility would be more convincing and reliable, Mei said.