II-5 Question: A big problem in the contact with Chinese enterprises and individuals is the lack of a credit rating system to evaluate the credibility of a potential partner. How is China preparing to improve its social credit system?

A: The establishment of a social credit system has taken Western countries nearly 200 years and a relatively complete set of theories and operational mechanisms are now in place. By contrast, China's credit system is still at its nascent stage. The socialist market economy is essentially a law- and credit-based economic system. Therefore, the Chinese Government has attached great importance to the establishment of a social credit system. Currently, China has about 100 credit reporting agencies and nearly 80 credit rating agencies, over 2,000 credit guarantee corporations and more than 500 other types of credit agencies. After development of over a decade, credit services have become a fledgling sector in China's social and economic life.

In addition to the social credit services, government agencies are building their respective credit systems in areas under their jurisdiction. For instance, administrations for industry and commerce at all levels have put the basic information of over 6 million enterprises into a database of corporate credit information and established a supervision system incorporating incentives, warnings and punishments. Financial institutions have put in place a national network of credit registration system for enterprises and individuals, which includes the credit records of 488 million natural persons and the total credit balance information of 82 percent enterprises. Taxation administrations have had comprehensive management and credit supervision on taxpayers. Customs offices have put 300,000 registered enterprises into different categories of supervision according to their credit records. Public security departments are building eight open databases on basic information of the whole population and law-breakers and criminals. Other government departments, including financial, judiciary, construction, quality supervision, inspection and quarantine, food and drug and foreign exchange administrations, have introduced categorized supervision of enterprises, to promote the building of the credit system.

(China.org.cn)