A number of companies with bad credit records in Beijing have been listed on the Internet, in a bid to promote a credit economy in the world's most-populous country.
Following Beijing's launch of China's first such Website, Guangzhou in Guangdong Province has planned to establish an archive on local companies' credit. Mean-while, Shantou, another city in Guangdong, has opened a governmental Website for credit rating messages.
Li Rongrong, minister in charge of the State Economic and Trade Commission, said that bad commercial faith had become a dampener on further economic development. It was hard for China to move ahead without a basic credit system.
A survey conducted by the Development Research Center of the State Council has found that the main problems concerning credit issue include outstanding payment, false information disclosure, fraud in price and quality, trademark and patent piracy, Xinhua news agency reported.
Economists say that theoretically, more companies are encouraged to ape those that have got away with bad practice. This means companies falling victim to bad credit end up preying on other companies.
Statistics show that China loses more than 500 billion yuan (US$60 billion) annually in poor credit practices.
To stamp out such activity, China has started following the example of developed countries in building up credit system for companies and individuals.
Shi Pu, associate professor in economics of Henan Institute of Finance and Economics, holds that the exposure of names of badly rated companies on the Internet would keep firms and individuals on their toes.
Hu Angang, a respected economist, maintains the key issue is to make corporate information transparent and accessible to investors and consumers.
(eastday.com June 10, 2002)
