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More change is in the cards in finance

Updated: 2013-11-19 07:49
By Wei Tian in Shanghai ( China Daily)

Integrated credit record system will give banks additional information

A comprehensive credit investigation system will be established in the China (Shanghai) Pilot Free Trade Zone to better serve the private economy and pave the way for bigger steps in financial reform, said a local banking regulator.

"The FTZ management committee is preparing to build an integrated credit investigation system to bring together all relative credit information," said Ma Lixin, deputy head of the Shanghai Banking Regulatory Commission, at a forum held by Fudan University on Sunday.

A big shortcoming of the current credit systems, including the one operated by the People's Bank of China, the country's central bank, Ma said, is that they mostly record only the financial information of a company.

"The lending to private companies depends very much on non-financial information, such as payment of your electricity bill. Yet such information is hard to trace in a traditional credit system."

Ma said the new credit investigation system in the Shanghai FTZ will integrate the systems of the central bank, commercial banks, as well as other information relative to a company's integrity.

"In the new system, commercial banks will be able to evaluate the credit information in a more comprehensive manner and private enterprises will also have a better chance to win the favor from banks," he said.

In a key move to simplify investment procedure, the industrial and commercial administration authority of the Shanghai FTZ has removed the minimum registered capital requirement for business startups, as well as the annual checking system, which is now replaced by a reporting system.

In late October, one month after the Shanghai FTZ was officially launched, the policy was spread nationwide, as announced at a meeting presided over by Premier Li Keqiang.

But in the meantime, Li also called for advancing the building of an integrity system: Enterprises with deceptive practices will be put on a "blacklist" that will be publicly available.

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