China is taking radical steps to improve social credit system

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China on Friday announced more concrete measures to improve its national social credit system.

Under the guidance of National Development and Reform Commission (NDRC), the China Information Industry Association (CIIA) has officially launched a project to promote the national social credit system.

Meanwhile, a public service platform was also released to trace private domain names, aiming to help the public to distinguish genuine domain names from counterfeit ones, CIIA president He Cuiqin said.

NDRC official claims that building a national social credit system is in everyone’s interest, while many critics say the government is only making radical policies to monitor the life of its people as a social credit system shall not be built on regulatory rules but on moral norms.

As the government is scrutinising on the borrowings of some of the country’s top overseas deal makers, live streaming of online video on Sino Weibo  and other internet portals are banned as they are said to spread too many rumours. Everyone seems to have a “social” credit problem.

At an internal meeting in April, the new head of China’s banking regulator said he would resign “if the banking industry becomes a complete mess”. This remark admits it’s the government’s polices or wrong doing that have caused the “complete mess”, not the people’s credit problem.

Three years ago, China released an outline for building a government-led national social credit system to assess individuals and government agencies on areas ranging from tax payment and local government bonds to judicial credibility.

The outline, issued by the State Council, focuses on credit in four areas, including administrative affairs, commercial activities, social behavior, and the judicial system.

The authority pledged to establish a set of laws and regulations regarding social credit, a credit reference system that covers the whole of society and a related reward and punishment system by 2020.

According to Xinhua, the traditional frugality of Chinese people and their high rate of household savings are being challenged by the younger generation, who are motivated to spend with borrowed money, a new study has found.

China’s social credit problem seems to exist not only in the cities, but also in its rural areas. In reality, it is extremely difficult for Chinese farmers to get a bank loan.

This April, Vice-Premier Wang Yang called for a better rural credit guarantee system to direct more loans into the money-starved rural economy. Wang urged more cooperation by governments, banks and guarantee institutions.

In China, administrative measures and policies are often made confused with law and regulations. The government has always proclaimed to build a society ruled by law, hopefully not bad ones.

By Cloudy Seagail

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