Credit-based regulation to be toughened

Premier Li says better oversight is essential to effective market reforms

China will step up the building of its social credit system by rolling out new market regulatory measures, the State Council announced after the latest executive meeting chaired by Premier Li Keqiang.

"Credit-based regulation is crucial for the sound working of market institutions," Li said.

"In developing the socialist market economy, the government must reform its functions and foster an enabling business environment. While streamlining administration and delegating powers, we will enhance oversight where necessary and credit-based regulation is the foundation of this endeavor," Li said.

It was agreed at the meeting that the country will establish, in accordance with the law, authoritative, unified and accessible credit records of all market players based on their unified social credit codes.

Government departments at all levels are required to share credit information as permitted by law. No government agencies should repeatedly ask market players to provide the same information that can be shared.

A credit "blacklist" system will be further developed, together with guiding standards, to enhance interagency punishment for acts of bad faith. Strict penalties, including denying market access, will be meted out in accordance with laws and regulations.

"The effective tool of penalties for acts of bad faith must be fully harnessed," Li said. "The price to pay for institutional violations, breach of laws and even legal offenses now is too low. That is the underlying reason why some market players choose to cross the line."

Li added a cross-sector, interagency mechanism must be developed to deal with such behaviors.

The meeting also called for applying the Internet Plus model and technologies such as big data to make regulation of acts of bad faith more timely, precise and effective.

The government will safeguard credit information security and stringently protect trade secrets and individual privacy. Any leakage, falsification or exploitation of credit information for personal gains will be seriously dealt with.

"We need to follow the laws of the market," Li said, "Punitive measures such as blacklisting actors of bad faith and denying them market access can also help motivate market players to abide by the law. This will improve our social credit system and market environment."