The Chinese central government has released new opinions that outline mechanisms for the restoration of the credit status of impaired market entities.
The office of China’s State Council recently issued the “Guidance Opinions Concerning Accelerated Driving of the Establishment of a Social Credit System and the Development of New Regulatory Measures with Credit as Their Foundation” (关于加快推进社会信用体系建设构建以信用为基础的新型监管机制的指导意见).
The Opinions have drawn attention domestically for proposing the establishment of credit repair mechanisms for those market entities whose credit status is impaired.
“At present there are a considerable number of credit impaired entities whose credit loss conduct certainly wasn’t deliberate, while the vast majority are highly willing to correct their credit loss conduct and sincerely abide by the law in their operations,” said Lian Weiliang (连维良), vice-chair of the National Development and Reform Commission (NDRC), at a press conference held on 18 July.
“Providing credit restoration will encourage those market entities with slight credit infractions to amend their errors, which will have extremely important significance for raising the level of trust throughout society.”
The credit restoration mechanisms are expected to involve removal from blacklists and the cancellation of joint credit loss penalties, as well as the reduction or termination of credit loss notices.
Lian Weiliang said that credit restoration will involve market entities correcting their credit loss conduct and bearing corresponding legal liability, as well as applying for credit restoration with the government authority responsible for issuing the penalty decision.
The authorities will then provide a decision on credit restoration after applicants undergo new credit inspections and specialist training, as well as submit credit reports.
The Opinions propose policy measures across four key areas:
- Innovation of credit regulation prior to events taking place;
- Strengthening of credit regulation during events;
- Improvement of post-event credit regulation;
- Strengthening of credit support protection.