Guiding Opinion on Accelerating the Advancement of the Establishment of the Social Credit System with New Forms of Credit-based Regulatory Mechanisms

Promulgation Date: 2019/7/9
Title: Guiding Opinion by the General Office of the State Council on Accelerating the Advancement of the Establishment of the Social Credit System with New Forms of Credit-based Regulatory Mechanisms
Document Number:State Council General Office Issuance [2019] No. 35
Expiration date: 
Promulgating Entities: General Office of the State Council
Source of text: http://www.gov.cn/zhengce/content/2019-07/16/content_5410120.htm

A summary of this document is also available here.

Map of the Guiding Opinion on Credit-based Regulation

Map of the Guiding Opinion on Credit-based Regulation

People’s governments of provinces, autonomous regions, and cities directly under the jurisdiction of central government, and all State Council ministries and commissions and directly managed agencies:

The following opinions are hereby put forward with the consent of the State Council so as to strengthen the establishment of the social credit system, to thoroughly advance the reform of "decentralizing regulation", to give further play to the fundamental role of credit in innovating regulatory mechanisms and raise regulatory capacity and levels, to better bring in the strength of market entities, and to stimulate high quality development.

I. General Requirements

With Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidance, thoroughly implement the spirit of the 19th party congress and the 2nd and third plenary sessions; in accordance with laws, regulations, and the basic principles of innovative reform and collaborative governance; and with strengthening credit regulation as the focus, innovate regulatory concepts, systems, and methods, establish and complete new types of regulatory mechanisms that permeate the entire life-cycle of market entities, linking regulation at every phased before, during, and after operations; continuously increasing regulatory capacity and levels, and further regulating market order, optimizing the business environment, and stimulating high quality development.

II. Innovate in Ex-ante Credit Regulation

(1) Establish and complete systems for credit pledges. When using credit pledges in handling administrative permit matters, where the applicant pledges to meet requirements and provide relevant materials, it should be handled immediately. Where some of the declaration materials are incomplete for applicants with good credit status, but written pledges are given that they will be provided within a given time, they should be accepted to expedite the progress of handling. Performance on the written pledges is to be recorded in credit records and is to be an important basis for regulation during and after the matters; and punishment is to be implemented against applicants that do not perform, in light of the circumstances. Sorting of administrative permitting matters that can carry out credit pledges should be accelerated, formulating template credit pledges and entrusting each level of credit portal website to disclose them to the public. Encourage market entities to proactively make credit pledges to the public. Support industry associations and chambers of commerce to establish and complete systems for internal industry credit pledges, strengthening industry self-discipline. (Each local department is separately responsible based on their duties)

(2) Explore carrying out education on creditworthiness for businesses before permitting. Fully utilize each level and type of government service window to broadly carry out education on legal compliance and creditworthiness for market entities. When handling registration, approvals, filings, and other such operations for market entities, carry out standardized, regulated, and simplified education on legal and credit knowledge at appropriate times, increasing businesses awareness of doing business in accordance with law and creditworthiness. Fees must not be collected for carrying out education on creditworthiness, and it must not be a necessary requirement for market entry. (Each local department is separately responsible based on their duties)

(3) Actively expand the use of credit reports. Encourage all types of market entity to make broader and more active use of credit reports in production and business activities. In matters such as government procurement, bidding and tendering, administrative approvals, market entry, and qualifications review, give full play to the role of credit reports issued by public and third-party credit service establishments. Explore establishing national unified credit report standards, promoting mutual recognition of credit report conclusions in different regions. (the Development and Reform Commission and People's Bank of China are to take the lead, with each region and each department separately responsible in accordance with their duties.)

III. Strengthening Credit Regulation During Operations

(4) Fully establish credit records for market entities. Establish a directory for credit information collection based on lists of rights and responsibilities, and in handling registration, qualifications reviews, routine regulation, public services, and so forth, promptly, accurately, and completely record market entities' credit conduct, especially recording records of untrustworthiness so that they are accessible, verifiable, and traceable. (Each local department is separately responsible based on their duties)

Improve the system of uniform social credit codes for legal persons and other organizations, and with the uniform social credit code as an identifier, integrate the formation of a complete credit record for market entities, and disclose these to the public through the "Credit China" website, the national enterprise credit information announcement system or China government websites and the web portals for relevant department, and other channels. Complete efforts to integrate the market regulation 12315 hotline for complaints and reporting and digital platforms, forcefully implementing announcement of consumer complaints and promotion of entity responsibility for businesses protection of consumer rights. (Development and Reform Commission and State Administration for Market Regulation responsible)

(5) Establish and complete mechanisms for voluntary registration of credit information. Encourage market entities to voluntarily register credit information such as on qualifications certificates, market businesses, contract performances, and the societal public interest through the 'Credit China" website or other channels, make public credit pledges as to the veracity of the information, and authorize the website to integrate, share, and use the relevant information. Verified, voluntarily registered information may be an important basis for credit appraisal and producing credit reports. (the Development and Reform Commission is to take the lead and each department separately responsible in accordance with their duties)

(6) Further develop comprehensive appraisal of public credit. The national credit information sharing platform should strengthen coordination and cooperation with relevant departments, integrating all types of credit information in accordance with laws and regulations, to develop full coverage, standardized, public interest, comprehensive appraisal of public credit for market entities, periodically sending the appraisal outcomes to relevant government departments, financial institutions, industry associations and chambers of commerce, to use as a reference, and disclose them to the public in accordance with relevant provisions. Promote relevant departments' use of the outcomes of comprehensive appraisals of public credit, combining departmental data from industry-regulation to establish industry credit appraisal models to provide a precise bases for credit regulation. (the Development and Reform Commission is to take the lead and each department separately responsible in accordance with their duties)

(7) Vigorously Advance Hierarchical and Categorical Credit Regulation. On a foundation of fully understanding credit information and comprehensively assessing credit statuses, sort the subjects of regulation into levels and types based on the comprehensive public information appraisal outcomes, industry credit appraisal outcomes, and so forth, and employ different regulatory measures based on credit levels. "Two randoms, one disclosure" oversight [random selection of inspection targets and inspectors, public disclosure of outcomes] should be combined with credit levels; the ratio and frequency of spot checks may be reasonably reduced for lower-risk market entities with better credit reducing the impact on regular production and business; the normal ratio and frequency of spot checks is to be carried out for market entities with normal credit and risk; and for higher-risk market entities that violate laws and are untrustworthy, the ratio and frequency of spot check should be appropriately increased, and strict management and punishment carried out in accordance with laws and regulations. (Each local department is separately responsible based on their duties)

IV. Improve Ex-post Credit Regulation

(8) Establish and complete mechanisms for designating untrustworthy targets of joint disciplinary action. Based on the records of untrustworthiness obtained in ex ante and mid-operations regulation phases, relevant departments are to establish and complete systems for listing untrustworthy targets of joint disciplinary action in accordance with laws and regulations. Based on processing outcomes such as judicial rulings, administrative punishments, and administrative compulsory measures, include market entities involved in unlawful and untrustworthy conduct that is heinous, has serious circumstances, or has a larger social harm, in the list of untrustworthy targets for joint disciplinary action in accordance with procedures. Accelerate completion of relevant management measures, clarifying the basis, standards, and procedures for designations, and the mechanisms for objections, appeals, and removals. The formulation of management measures should fully solicit public comments, and the standards put forth and specific designation procedures should be disclosed to the public in an appropriate manner. Support relevant departments in establishing a system of targets for key scrutiny as needed for regulatory work, allowing strict regulatory measures proportionate to the degree of untrustworthy acts to be carried out against market entities that have untrustworthy conduct but do not reach the level for designation as the target of joint disciplinary action. (Each department is separately responsible in accordance with their duties)

(9) Urge untrustworthy market entities to make corrections in a fixed period of time. Untrustworthy market entities shall earnestly make corrections within the time provided, and where corrections are not adequate, follow the principle of "having the designators give the talking to” to have the designating department initiate procedures to have a warning talk with them and urge the untrustworthy market entities to perform the relevant obligations and eliminate negative impacts. The record of the talk is to be included in the untrustworthy market entities' credit record, and included in the national credit information sharing platform after uniform aggregation. Vigorously advance special governance projects on the problems of untrustworthiness in key areas, employing strong and effective measures to accelerate corrections. (Each department is separately responsible in accordance with their duties)

(10) Thoroughly implement joint disciplinary action for untrusworthiness. Accelerate construction of systems for joint disciplinary action for untrustworthiness that cross regions, industries, and sectors, to get to the root in resolving the problems of repeated untrustworthy conduct and occurrences in untrustworthy conduct in different places. Establish a list of joint disciplinary action measures in accordance with laws and regulations, dynamically update it and release it to the public, form multi-pronged administrative, market, and industry punishment measures, and an overall structure for joint disciplinary action against untrustworthiness in which social forces participate. Emphasize implementation of punishment measures with strong punitive force high regulatory effect including administrative punishment measures such as limiting untrustworthy joint disciplinary action targets' issuance of stock, bidding and tendering, applications for government finance projects, and enjoyment of tax benefits; market punishment measures such as limiting obtaining of credit, taking planes, and riding high-level trains and seats; as well as industry punishment measures such as circulating criticism and public reprimand. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

(11) Implement market and industry entry restrictions resolutely in accordance with law and regulations. Implement strict regulation and increase the force of punishments focusing on fields that are directly related to security of the masses in their persons and property, such as food and drug safety, the ecology and environment, production safety, eldercare and childcare, and urban operational security. For market entities that refuse to perform on judicial rulings or administrative punishment decisions, repeatedly offend, and cause major harms, and the related responsible persons, resolutely follow the laws and regulations to carry out market and industry access restrictions for a set period of time up to lifetime bans. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

(12) Lawfully pursue responsibility of those who break the law and are untrustworthy. Establish and complete mechanisms for pursuing responsibility, follow laws and regulations to carry out punishments for untrustworthiness against the legal representatives or principle responsible persons and actual controllers of market entities entered into the list of targets for joint disciplinary action for untrustworthiness, and record information on the related untrustworthiness in their personal credit records. Where unlawful and untrustworthy conduct occurs at state organs or public institutions or state-owned enterprises, the higher-level competent unit and auditing department should be alerted; where staff have unlawful and untrustworthy conduct, the unit above their unit and the corresponding discipline inspection and organization human resources departments should be alerted. (Each local department is separately responsible based on their duties)

(13) Explore the establishment of mechanisms for restoring credit. Where market entities correct their untrustworthy conduct and eliminate negative impact within the time provided, they may carry out credit restoration by making credit pledges, completing credit corrections, through credit verification, by accepting special training, submitting credit reports, participating in public interest charitable activities, and other such methods. After restoration is complete, each region and department should promptly stop displaying their record of untrustworthiness in accordance with procedures, and stop implementation of joint disciplinary action measures. Accelerate the establishment of improve mechanisms for coordinated action and single-site processing, providing convenient credit restoration services to untrustworthy market entities. Encourage eligible third-party credit service establishments to provide services such as credit reports and credit management consulting to untrustworthy market entities. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

V. Strengthen Supports and Safeguards in Credit Regulation

(14) Strive to increase the level of digitization in credit regulation. Give full play to the role of the national credit information sharing platform and the national 'Internet+regulation" system in the collection and sharing of information, making it so that government department information 'collects all that it should', advancing inter-connectivity between local information platforms and industry information platforms, with clear mechanisms for data flow between government and enterprises, forming a single web of credit information that completely covers all regions, all departments, and all types of market entity. Rely on the national credit information sharing platform and national 'internet+regulation' system to share information such as market entities' basic information, law enforcement regulation and disposition information, information on joint disciplinary action against untrustworthiness, and other relevant departmental operation systems as needed, increase application during credit regulation and other such processes, and support the formation of credit regulation coordination mechanisms with data synchronization, unified measures, and consistent standards. (the Development and Reform Commission and General Office of the State Council are to take the lead and each department of each region is separately responsible in accordance with their duties.)

(15) Vigorously advance information disclosure and announcement in credit regulation. On the foundation of the centralized disclosure of administrative permits and administrative punishments, rely on the 'Credit China' website, China Government Web or other channels, to further study and promote online disclosure of other administrative acts such as administrative compulsion, administrative designations, administrative expropriation, administrative payments, administrative rulings, administrative compensation, administrative rewards, and administrative oversight and inspections within 7 working days; and promoting 'disclosure of all that should be disclosed' through appropriate channels for information on judgment defaulters and untrustworthy false litigators in judicial ruling and enforcement activities. (Each local department is separately responsible based on their duties)

(16) Give full play to the role of 'Internet+’ and big data in supporting credit regulation. Rely on systems such as the "Internet+Regulation" system, to effectively integrate Public Credit Information, Market Credit Information, complaint and report information, and related third-party information, fully utilizing big data, artificial intelligence, and new era information technologies to bring about credit regulation data that can be compared, has traceable processes, and can detect problems. Encourage each region and each department, to summarize actual conditions and cooperate with big data institutions to develop credit information in accordance with laws and regulations, and promptly and dynamically understand the business situations of market entities and other objective characteristics. Fully utilize the national 'Internet+regulation" and other systems to establish early risk alert mechanisms, to detect and prevent emerging cross-industry and cross-region risks as soon as possible. Use big data to proactively discover and identify clues on violations of laws and regulations, effectively preventing harms to the societal public interest and the masses' security in their persons and property from conduct in violation of laws and regulations. Encourage increasing the efficacy of law enforcement regulation through the Internet of Things, Real Time Networks, and other non-contact regulatory methods, bringing about standardization, precision, intelligent, regulation that minimizes human factors, brings about just regulation, rejects problems such as arbitrary inspection and fragmented regulation, making it so that 'one visit handles many matters' and reducing hassle for the targets of regulation. (General Office of the State Council, Development and Reform Commission, and State Administration for Market Regulation are to take the lead, with each department separately responsible in accordance with their duties)

(17) Truly increase the strength of credit information security and protections for market entities' rights and interests. Strictly investigate and punish improper conduct such as leaking or altering of credit information or using credit information for personal gain. Strengthen the security infrastructure for credit information and the establishment of security and prevention capacity. Establish and complete systems for objections and complaints on credit information, and the information providing or collecting units should verify information on which market entities have submitted objections as quickly as possible and give feedback, and where upon review there is truly error the information should be promptly corrected or revoked. Where incorrect designations on the list of targets for joint disciplinary action against untrustworthiness or incorrect adoption of joint disciplinary action measures harms market entities' lawful rights and interests, relevant departments and units should actively employ measures to eliminate the negative impact. (Each local department is separately responsible based on their duties)

18. Actively lead industry organizations and credit service establishments to coordinate regulation. Support industry associations and chambers of commerce authorized by relevant departments assistance in carrying out the establishment of industry credit regulation, encourage industry associations and chambers of commerce to establish membership credit records, and carry out credit pledges, credit training, credit publicity, credit advocacy, and so forth, to make creditworthiness an important part of industry rules and agreements, leading the industry to greater awareness of lawful and creditworthy business. Promote the development of credit services such as credit reporting, credit rating, credit insurance, credit guarantees, performance insurance, credit management consulting and training, to truly give play to the professional role third-party credit service establishments in areas such as collection, processing, and use of credit information. Encourage relevant departments to cooperate with third-party credit service establishments in the collection of credit records, sharing of credit information, big data analysis of credit, credit risk alerts, investigation of cases of untrustworthiness, follow up monitoring of untrustworthiness, and other areas. (Development and Reform Commission, Ministry of Civil Affairs, and People's Bank of China are separately responsible in accordance with their duties)

VI: Strengthen Organizational Implementation of Credit Regulation

(19) Strengthen organizational leadership. Each area and each department should make building new forms of credit-based regulatory mechanisms an important measure in thoroughly advancing the reform of 'decentralization', placing it in a more prominent position, strengthening organizational leadership, refining divisions of labor and responsibility, and vigorously, orderly, and effectively promoting implementation. Improve accompanying systems for credit regulation and increase connections with other 'decentralization' reforms. Departments with market or industry regulatory duties should truly take on entity liability for the construction of industry credit and credit regulation, giving full play to the roles of industry organizations and third-party credit service establishments to create advantageous conditions for public oversight, integrating to form a powerful united force for credit regulation in which the entire society participates. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

（20） Carry out pilots and demonstrations. Organize and develop the establishment of credit and credit regulation pilots and demonstrations centered around credit pledges, credit restoration, joint disciplinary action for untrustworthiness, the use of credit big data and other key efforts. On the foundation of exploration and innovation, each region and each department is to promptly summarize, refine, and communicate positive experiences and methods in developing the credit establishment and credit regulation, to replicate them in a broader area. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

(21) Accelerate the establishment of new rules systems. Promote the drafting of laws related to the establishment of the social credit system, accelerate research and release of Regulations on Public Credit Information management, measures on administration of the uniform social credit code, and other such laws and regulations. Establish and complete uniform national rules and standards for credit regulation, promptly releasing relevant local regulations, government rules, or normative documents, and sending up effective methods of credit regulation for systemic regulation. Quickly draft national standards urgently needed for the development of credit regulation. (the Development and Reform Commission and Ministry of Justice are to take the lead and each department of each region is separately responsible in accordance with their duties.)

(22) Do a good job of publicity and explanation. Each region and each department should use all types of channels and forms to do a good job of thorough and detailed publicity and explanation work for market entities, letting businesses fully understand and actively cooperate with the new form of credit-based regulatory measures. Strengthen guidance and training for basic level and front-line regulators. Organize news media to widely report and actively publicize credit regulation measures and their efficacy, creating a positive social atmosphere. (the Development and Reform Commission is to take the lead and each department of each region is separately responsible in accordance with their duties.)

General Office of the State Council

2019/7/9