Crucial credit system

A recently drafted plan on building a comprehensive social credit system has secured preliminary approval from the State Council. Compared with previous efforts, the new plan will record people's credit histories. This is a much needed step, and a Beijing Youth Daily editorial praised the move, saying it will help restore creditability in society and in fighting corruption.

In traditional Chinese culture, creditworthiness has been cherished as both a virtue and the basis for a person surviving in society. In the market economy this has been transformed into a legal rather than a moral principle.

PBOC suspends use of virtual credit cards

China to set up credit system for farmers

However, the lack of creditworthiness seems quite rampant at present, which has seriously disturbed the economic order and destroyed people's confidence in commerce. The causes are many, but the absence of national credit records must be a primary one. Without any reliable, accessible record, it is easy for those who fail to pay their debts to conceal themselves.

Therefore the plan is timely. As early as 2003, the idea of a nationwide system to record a person's creditworthiness was raised and the 18th Party congress in October 2013 stressed the necessity of promoting a system to determine people's financial soundness. The new plan will honor these by depriving discredited persons of the cloak of invisibility.

In 2013, when the Supreme People's Court published a list of discreditable persons subject to judgments on its website, and banned them from activities such as luxurious spending, many of them quickly repaid their debts. A comprehensive credit system will doubtlessly put even more pressure upon people to pay what they owe.

The new plan is also expected to push realname registration of financial accounts, to prevent corrupt officials from concealing and transferring illegal income under false names, which is a positive step in the fight against corruption. Also more information about officials, such as job performance, might be incorporated in the system to better supervise power.

Of course, it is necessary to protect citizens' privacy in implementing the plan. But building a national system to record people's credit history is a positive step toward constructing a financially sound society and we hope the plan can play its role as expected.