"Credit" has never been of so much concern to the Chinese people as
it is today. They are realizing for the first time that a
credit-based society helps secure a place in world economic
exchanges.
In
recent days, there has been a flood of proposals from NPC deputies
and CPPCC members, calling for the building of a social credit
system in response to what Premier Zhu Rongji said: "...make those
with bad record of behavior pay the price and even bring them to
book."
The participants in the ongoing annual
NPC and CPPCC sessions share the view that the lack of credit
has become a "bottleneck" restricting the economic development and
threatening financial security and that without a sound social
credit system, China would be barred from the world.
The credit conditions across the country are indeed distressing,
said Zhang Dachun, an NPC deputy from Jiangsu Province, citing such
cases as cheating, black-box dealings, counterfeiting, repudiating
debts and evasion of tax. "These evils cannot be tolerated in a
market economy and constitute the biggest challenge and trouble
China faces in the WTO big family," he said.
For many years, the Chinese government has been enjoying a good
reputation in the international community. "If Chinese enterprises
fail in 'integrity', they would damage the image of not only their
own but also the country," he noted.
According to economist Zhou Jinfeng, some 90 percent of business
deals in western countries are settled on the basis of integrity.
But China's market economy was born out of planned economy and it
has a weak foundation of credit. "After the accession to the WTO,
the first thing China faces is the exchanges with credit-based
economies in international trade," he said.
Xie Qingjian, president of the Nanjing branch of the ,
said that commercial cheating, vicious debt arrears or escaping
debts and arbitrage are frequent, presenting serious hidden dangers
to economic and financial security.
"These malpractices have not only distorted economic relations, but
also increased the cost of trading, ruined social conventions, and
impaired the development of the market economy," Xie said.
The negative effect and losses due to creditability problems are
huge. Among the 60,000 enterprises that open accounts with the four
major state-owned commercial banks, more than half have been found
to have escaped debts, leaving a great amount of bad debts in the
commercial banks.
It
is estimated that forged and shoddy goods cause an annual loss of
200 billion yuan, and the amount of financial expense added due to
debt chains and cash transactions tops 200 billion yuan.
"Credit is the life-blood of a market economy. To build China's
credit system is of vital importance in guarding against financial
risks," Xie Qingjian said.
A
low credit rating will inevitably affect international cooperation
and the inflow of foreign capital. Many Chinese specialists
proposed laws on social credit in order to secure a normal economic
order and regulate the behavior of enterprises and individuals.
The modern information networks would make a universal social
credit system possible, according to the specialists.
( March 10, 2002)