The European Union Chamber of Commerce in China, in cooperation with Sinolytics, released The Digital Hand: How China’s Corporate Social Credit System Conditions Market Actors, a comprehensive study on China’s Corporate Social Credit System (SCS) in Guangzhou on Tuesday.
The report indicates that the Corporate SCS contains a diverse range of rating requirements, which form the basis for calculating regulatory ratings awarded to all market actors. Companies’ behaviour will be continually monitored, with scores being adjusted accordingly. If businesses fail to clearly grasp all aspects of the system and what they need to do to comply, they risk serious repercussions like sanctions or even blacklisting. It also reminds the EU enterprises in China to gain a full understanding of the System’s precise requirements including assessing their current performance, identifying risks and detecting negative entries. They can also adjust their internal processes and structures to deal with the SCS’s requirements and to ensure a good rating in the future.
J?rg Wuttke, president of the European Union Chamber of Commerce in China [Photoed by Keane, Newsgd.com]
“European companies always take Chinese government regulations very seriously”, said J?rg Wuttke, president of the European Union Chamber of Commerce in China. “The social credit system will have a huge impact on the economic landscape so European companies will be challenged by new regulations. But we clearly also benefit from the fact that we are more compliant with Chinese laws. It tells us to understand our customers better and our suppliers. There will be far more transparency in the system”.
George Lau, Chairman of the South China Board of the EuCham [Photoed by Keane, Newsgd.com]
“We are really grateful and happy to be doing business in an environment where the government is so professional and transparent. Our member companies always rate highest in doing business here in South China. We have a lot of working-group level meetings with the local government including district level, municipal level or even provincial. We’ve already planned this same thing for the SCS”, George Lau, Chairman of the South China Board of the EuCham added.
China has put a strong emphasis on the establishment of a social credit system since the State Council issued a guideline in 2014. From July to September this year, Chinese government authorities issued a series of policies and draft amendments to push forward the establishment of the Social Credit System (SCS). The system creates credit files for almost all people and enterprises involved in credit activities nationwide in a uniform format, and its products and services have been widely used in all aspects of the social economy. According to the World Bank, China's credit information index an important indicator of the business environment, is ahead of some other developed countries.
Reported by Keane
Editor: Simon Haywood
Correspondent: Bruce Ding