China's top economic planner, the National Development and Reform Commission has teamed up with the country's leading online shopping platform Alibaba to build a national credit system for small- and medium-sized enterprises.

Millions of transactions take place on China's largest e-commerce platform Alibaba every day.

And these leave a trail of data, that's not only BIG, but also powerful.

The data will be integrated in a platform to promote credibility and transparency for SMEs in China.

"The data needed for building the credit system comes from three sources. First, the data generated from e-commerce platforms such as Alibaba's websites. Second, relevant agencies can authorize us to release some data, such as that from the Customs, and invoices. Third, data from the industrial and commercial bureaus, courts and IPR protection agencies," said Li Duoquan, general manager of Valued-added services, B2B Business Group, Alibaba.

Establishing a credit system for SMEs seems not as lucrative as creating a system for big corporations. But more than 70 million SMEs are the backbone of the Chinese economy and the credit system should bring them long-standing benefits.

"SMEs play a pivotal role in China's economic development, especially in terms of increasing employment and spurring the economy. But the data from SMEs operations is scattered and hard to get, putting them in an unfavourable position in the competition. Once they are proved to have a higher credit rating, they can have more capital and development opportunities," said Du Liqun, deputy chair of China Credit Research Center, Peking University.

"We have suffered great losses in our business because we are not aware of the credit status of those SMEs. With this credit sharing information for SMEs, we can choose more professional and qualified business partners," said Guo Zihao, CEO of Beijing Hander Human Resource Corporation.

Spearheaded by the National Development and Reform Commission, the ministry will work together with Alibaba to crack down on scams and frauds aimed at increasing credit scores.

"We will launch joint special inspections to cope with the problem. If we discover activities that are conjuring credit records, we'll blacklist them as soon as possible," said Lian Weiliang, vice minister of NDRC.

But Alibaba suggests another way to punish them.

"I'm wondering whether we can link our credit system to the one in China's central bank. That database is more about finance and has excluded the credit generated by transactions and production. If our data can be incorporated, it will impose more restrictions on those dishonest companies," Li Duoquan said.

The Chinese Ministry of Commerce says the lack of credit in business leads to a staggering annual loss of 60 billion yuan or about 8-point-7 billion US dollars. And one third of the loss is due to fake or low-quality products and fraudulent practices. With the credit information sharing system in place, it's expected that more and more dishonest businesses will be driven out of the market.