Social credit system in pipeline ( 2004-01-20 09:32) (China Daily by Xiao Zhang)
Plans are in the pipeline to set up a high-level commission to supervise the
construction and regulation of the nation's first social credit system, sources
said.
Although the concept of building a China Credit System Regulatory Commission
remains in its initial stage, it will, once adopted, speed up the construction
of the badly-needed system and put an end to competition between government
agencies to become the emerging industry's watchdog.
The National Office of Rectification and Standardization of Market Economy
Order, a transitional agency authorized to oversee the nation's efforts to build
a social credit system, will supposedly be responsible for putting together the
new commission, if the government decides to go ahead with the idea, the sources
said.
"The National Office will certainly play a leading role, but various
ministries will need to contribute personnel," said one source, who declined to
be named.
A number of government agencies, including the State Development and Reform
Commission, the Ministry of Commerce, the Ministry of Public Security and the
State Administration for Industry and Commerce, are reportedly drafting their
own social credit system plans in a bid, insiders say, to win the leadership of
the country's massive campaign to building a social credit system.
Such a huge system will cover everything from database compilation and
business credit management to fostering a credit-valuing culture and drawing up
related legislation.
Analysts say a social credit system is badly needed in China, a nation where
defaulting debts are commonplace and many companies have a
"gimme-a-good-rating-and-tell-me-how-much-you-want'' attitude toward credit
rating firms.
The newly-established Ministry of Commerce appears to be leading the race.
The National Office is headquartered in the ministry, but is facing resistance
from other government agencies and ministries, insiders said.
The People's Bank of China, the nation's central bank, is also in a good
position. The bank is building a huge Enterprise and Individual Credit
Management System that covers all bank records of the nation's corporate and
consumer credit borrowers.
In a statement published on its website at the end of last year, the bank
explicitly defended its role in supervising the social credit system by citing a
decision by the State Council, China's cabinet, and the newly amended Law on the
People's Bank of China.
"Although the Law on the People's Bank of China does not explicitly state
that the People's Bank of China performs the responsibility of regulating the
credit management industry, regulating that industry remains one of the bank's
legal duties," reads the statement.
But that is just the bank's own development plan, said Pu Xiaolei, deputy
director of Credit Management Department under the Chinese Academy of
International Trade and Economic Co-operation, the Ministry of Commerce's think
tank.
"The dominant view is that responsibility for managing the credit information
of financial institutions and consumer credit borrowers should go to the central
bank," he said. "But the government did not assign it the national leadership,
giving this to the National Office. That is quite clear."
The National Office has been playing its role mainly in related legislation
and enterprise credit management, he said.
Pu said the State Development and Reform Commission is also building a
nationwide Unified Credit Platform on a trial basis. This regularly gathers and
publishes data on enterprises.
China's credit management industry is growing fast alongside the rapid
development of the market economy, but the estimated 500 credit management firms
have been frustrated by the long absence of an industry watchdog and related
legislation.
"Everybody is our supervisor now," said a senior manager at a major
Beijing-based credit management company. Currently, his firm needs to ask for
approval from a multitude of government agencies, including the Ministry of
Commerce, the State Administration for Industry and Commerce and the China
Securities Regulatory Commission, to name but a few.
The fact that various ministries are building their own systems will leads to
problems like waste of investment, chaotic management and difficulty in
connecting different databases, he said.
