Content area
Full Text
The credit system's detailed information may reduce the risk of doing business in China.
Many people assume that China does not have an effective credit information system - at least not one good enough to support business decisions. But the country has developed a comprehensive national system that companies can use to check the credit of individuals or businesses in China. Foreign companies may find the system useful for checking the backgrounds of clients, potential partners, or job applicants. Since the system collects company credit records, including those of foreign firms, companies should establish a credit record in China and check the accuracy of their credit reports.
Data boom
China's credit information system is similar to France's system: The government is responsible for collecting and providing credit information. The government of Shanghai, mainland China's largest municipality and financial center, created the country's first credit information system in 2000. At the central level, data collection has progressed rapidly since 2003, when the central government tasked the People's Bank of China (PBOC), China's central bank, with establishing a national credit information system.
By the end of 2008, PBOCs Company Credit Information System ( Qiye Zhengxin Xitong) contained the credit records of 7 million companies and basic information on 14 million businesses and other organizations (see Figures). The company database was used more than 32 million times to check credit in 2008. The Personal Credit Information System ( Geren Zhengxin Xitong) contains the credit records of 140 million individuals and basic personal information on 630 million people - nearly half of China's population. In 2008, the personal database was used to check credit records 152 million times. PBOC has expanded the system significantly within the last few years, making it much easier for companies to use credit records to do business.
Sources of credit information
The central government coordinates China's extensive credit information system. PBOC, which monitors all commercial banks, obtains bank credit and loan information across the country, including credit card information, and loads it into the system. The China Securities Regulatory Commission (CSRC) holds...