BUSINESS China's credit database needs clear standards, rules


China's credit database needs clear standards, rules

Global Times

08:35, April 10, 2019

China's soon-to-be-released version of personal credit reports, which will cover almost every aspect of daily life, including overdue water and phone bills, has sparked heated discussion online, as many question the standards involved and provisions for data protection. 


A woman checks her personal credit record in a local PBC services hall in Central China's Henan Province. (File photo: IC)

Many netizens wrote on China's twitter-like Weibo on Tuesday that they feel social credit has an increasingly significant impact on individuals' lives, but they argue whether such trivial issues as overdue utility fees are really that important.

"It seems to be too much. If I forget to pay my water or phone bills, but not deliberately, should I be regarded as dishonest? Will gas bills and property management fees also be included?" a Beijing-based netizen named Meng Li told the Global Times. 

"The new report shows the country's efforts to build a sound social credit system, which is a good policy. But what are the standards for credit investigations?" a netizen using the name Fengyuexueting wrote. "I'm worried there will be abuse of credit information and relevant departments should be transparent and offer proper explanations." 

To include such daily life activities will help diversify and expand credit ratings, experts said, noting that only if abundant big data is collected can the honesty level of a person and society at large be fully presented.

China's Credit Reference Center, which is under the People's Bank of China (PBC), the country's central bank, is set to unveil a new version of the personal credit report in the near future, media reports said.

The report will cover almost every aspect of daily life including overdue water and phone bills, spouses' information, delinquent tax payments, administrative penalties and professional qualifications.

There may be certain thresholds for credit evaluation in the new system along with some corresponding penalties, said Tian Yun, vice president of the Beijing Economic Operation Association.

For example, if a person delays paying water bills five times within one year, the credit system will show that he cannot enjoy favorable interest rates on personal mortgages, Tian told the Global Times on Tuesday. 

In previous years, the Chinese social credit system merely focused on financial activities such as bank credit, which was one-dimensional and failed to reflect fully an individual's real credit situation, said Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology.

Tian agreed, saying that more aspects from daily life, which would be tracked by the credit information investigation system in the long run, should become factors "drawing a complete profile of personal credit." 

"The scope for recording discredited behavior will be further expanded in the future to include such items as overdue traffic fines and violations of labor contracts," Dong told the Global Times on Tuesday. 

East China's Zhejiang Province plans to employ social credit to regulate people who "frequently and maliciously resign and then apply for jobs", and relevant measures are under discussion, according to media reports.

Legislation needed

"At present, our credit information system is driven by a two-wheel development model of the government and market," Chen Yulu, deputy governor of the PBC, said in March at a press conference.

The Credit Reference Center under the PBC is responsible for building the national credit information basic database, which has links to credit information from more than 3,500 banks and financial institutions. It covers 990 million people as well as more than 26 million companies and legal entities, Chen noted.

There are 125 credit information investigation institutions and 97 credit rating agencies in the Chinese market, 80 percent of which were set up by private capital, he said. In 2017, the PBC approved the first privately funded national personal credit system: Baihang Credit. More than 600 entities' databases have been connected to the system.

Data protection should be highly focused during the process of building a credit system, said experts. 

A law for protecting individual information should be drafted as soon as possible and the government should define the legal status of personal information rights and rules for information collection and usage, said Dong Ximiao, a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of China. 

He told the Global Times that rules should be formulated in major sectors including finance, e-commerce, education, telecommunications and medical treatment. "Relevant departments are expected to guide key industries and leading enterprises to establish personal information development and utilization rules within the national legal framework, and give full play to the self-discipline management mechanism in the sector."

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