The State Council Guiding Opinions on Establishing and Improving Systems of Joint Incentives for Trustworthiness and Joint Disciplinary Action for Untrustworthiness and Accelerating the Establishment of the Social Credit System

Index number:：000014349/2016-00117
Subject category:Public finance, financial, auditing  establishment of social credit system
Issuing Organ:State Council
Document date:2016/05/30
Title:The State Council Guiding Opinions on Establishing and Improving Systems of Joint Incentives for Trustworthiness and Joint Disciplinary Action for Untrustworthiness and Accelerating the Establishment of the Social Credit System
Release Number:Legal Release (2016) No. 33
Release date:6/12/2016

The State Council Guiding Opinions on Establishing and Improving Systems of Joint Incentives for Trustworthiness and Joint Disciplinary Action for Untrustworthiness and Accelerating the Establishment of the Social Credit System
Legal Release (2016) No. 33

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:
Establishing a sound social credit system and accelerating the construction of a new form of market regulatory system with credit as its core, is conducive to further promoting decentralization and transformation of government functions and to creating a fair and honest market environment. The following Opinions are hereby put forth so as to establish and improve systems for joint incentives for trustworthiness and joint disciplinary action for untrustworthiness, accelerating the establishment of social creditworthiness.
I. General Requirements

(1) Guiding Thought.

Comprehensively implement the spirit of the 18th National Congress of the Communist Party of China and its third, fourth, and fifth plenary sessions; deeply implement the spirit of General Secretary Xi Jinping's series of important speeches; follow the decisions and deployments of the CPC Central Committee and State Council, closely revolving around the strategic arrangement of the “Four Comprehensives;” firmly establishing the concepts of innovation, coordination, greenness, openness and shared development; implementing, strengthening and innovating the requirements for social governance, and accelerating the development of the social credit system, strengthening credit information disclosure and sharing, using credit incentives and restraint measures in accordance with laws and regulations; to build cross-regional, interdepartmental and cross-industry mechanisms for the joint incentives for trustworthiness and joint disciplinary action for untrustworthiness that are participated in jointly by the government and public; promoting market participants' good faith operations, preserving normal market order, and creating a creditworthy social environment.

(2) Basic Principles.

- Praise creditworthiness, discipline untrustworthiness. Fully utilize credit incentives and constraints, increasing the extent of incentives for trustworthy entities and of disciplinary actions for seriously untrustworthy entities, letting the trustworthy receive benefits and the untrustworthy be subject to restrictions, forming systemic mechanisms for praising honesty and disciplining untrustworthiness.

--Concerted departmental action, and social coordination. Through the disclosure and sharing of credit information, establish cross-region, interdepartmental, and cross-sector mechanisms for joint incentives and joint disciplinary action, forming a common governance structure in which government departments coordinate their concerted action, industry organizes self-discipline and management, credit service organizations actively participate, and there is broad supervision by public sentiment.

--Protection of rights and interests in accordance with laws and regulations. Strictly follow laws, regulations, and policies to scientificly deliniate trustworthy and untrustworthy conduct, developing joint incentives for trustworthiness, and joint disciplinary action for untrustworthiness Establish and complete mechanisms for credit restoration, objections, appeals and so forth, to protect parties' lawful rights and interests.

-- Focus on key points, coordinate advancement. Persist in being problem-oriented, striving to resolve credit issues in key industries that are currently harmful to the public interest and public safety, on which the masses have given strong feedback, or which have caused a serious negative impact on economic and social development. Encourage and support innovations and demonstrations by local people's governments and relevant departments, gradually expanding mechanisms for joint incentivizing of trustworthiness and joint discipline of untrustworthiness to all areas of the economy and society.
II. Establish sound mechanisms for praising and incentivizing trustworthy conduct.

(3) Select and establish exemplars of creditworthiness from multiple channels. Have administrative counterparts with good credit circumstances, models of creditworthiness and moralilty, and exceptional youth volunteers that are identified through relevant departments and social organizations' implementation of categorical credit management; as well as creditworthy members recommended by industry associations and chambers of commerce, and creditworthy entities uncovered by news media; be put up as exemplars of creditworthiness. Encourage relevant departments and social organizations to establish credit records for all kinds of entities in the course of supervision and services, and publicly recommend those without any negative credit records and exemplars of creditworthiness, joining together with other departments and social organizations to carry out incentives for trustworthiness. Encourage industry associations and chambers of commerce to improve mechanisms for assessing credit of member enterprises. Guide enterprises to actively release comprehensive credit assurances, or special assurances, such as on the quality of goods and services, and develop public self-declarations such as on standards for goods and services, accepting social oversight and forming a positive atmosphere for enterprises to be a model for honesty.

(4) Explore the establishment of "green channels" for administrative approvals. In the course of handling administrative permits, facilitation service measures such as "green channels" and "permissive acceptance" [acceptance despite defects in materials] may be used for administrative counterparts who are models of honesty, or who have not had any negative credit information recorded for three consecutive years. For eligible administrative counterparts, where some of the declaration materials are incomplete, if a written assurance is given that they will be provided within a given time, they should be accepted to expedite the progress of handling, except where laws or regulations require their provision,

(5) Priority provision of public services. In the implementation of financial capital arrangements, preferential investment incentive policies and all other types of preferential treatment policy, priority is to be given to creditworthy market entities, expanding the degree of support. In education, employment, entrepreneurship, social security and other areas, key support and priority facilitation is to be given to creditworthy individuals. In transactions involving public resources, promote measures such as giving extra points to creditworthy market entities in accordance with laws and agreements.

(6) Optimize administrative supervision arrangements for creditworthy enterprises. All levels of department for market supervision should emphasize the use of big data methodology, on the basis of the types of credit record and credit appraisals of the subjects of supervision, to improve supervision measures during and after incidents, and provide facilitation services to market entities. For enterprises that meet certain requirements, optimize the frequency of routine and special inspections.

(7) Reduce market transaction costs. Encourage relevant departments and units to develop "easy tax loans", "easy credit loans", "easy credit debt" and other products incentivizing trustworthiness; guiding financial instititutions, commerical sales institutions and other market services institutions to consider using market entity credit information, credit scores, and credit assesment conclusions, to give preference and facilitation for creditworthy market entities, and cause the trustworthy to receive more opportunities and benefits from the marketplace.

(8) Strongly recommend creditworthy market entities. Relevant departments of all levels of people's government should promptly publish creditworthy market entities' positive credit information on government websites and the "China Credit" website, and strongly recommend creditworthy enterprises at activities such as exhibitions and bank-enterprise connections, making credit a major factor for consideration in market allocation of resources. Guide credit institutions to strengthen the collection of market entities' positive information, giving the trustworthy increased incentives such as added points in industries where creditworthiness is a a more concentrated problem. Promote industry associations and chambers of commerce's strengthening of creditworthiness and industry self-discipline, commending creditworthy members, and recounting "stories of creditworthiness" in the industry.

III. Establish mechanisms for constraining and punishing untrustworthy conduct.

(9) Carry out joint disciplinary action in key industries and for serious untrustworthy conduct. On the foundation of relevant departments' and social organizations' handling and appraisal of untrustworthy conduct in accordance with laws and regulations, share information to promote other relevant departments' and social organizations' adoption of joint disciplinary actions against serious untrustworthy conduct in accordance with laws and regulations. Key points include: First is conduct that seriously endangers the public's physical health and security in their lives, including serious untrustworthy conduct in areas such as food and drugs, ecology and environment, project quality, production safety, fire safety, and mandatory product certifications. Second is conduct that seriously undermines the order of fair marketplace competition or the normal social order, including serious untrustworthy conduct such as bribery, tax evasion or fraud, malicious debt evasion, malicious delay in payment of debts or for services, malicious delay in paying wages, illegal fund-raising, contract fraud, pyramid sales, operating a business without a license, production or sale of fake or shoddy goods, intentional infringement of intellectual property rights, leasing or lending bidding qualifications, collusive bidding, false advertising, infringing the lawful rights and interests of consumers or securities investors, seriously undermining the order of cyberspace transmissions, and assembling to disrupt social order. Third is acts of refusal to perform legally prescribed obligations, seriously impacting the credibility of judicial or administrative organs; including untrustworthy conduct such as where, after judicial or administrative organs make a judgment or decision, parties have the ability to perform on it but refuse to perform or evade enforcement. Fourth is refusal to perform national defense obligations, such as refusing or avoiding military service, refusing or delaying the expropriation of civil-use resources or impeding the modification of expropriated civil-use resources, endangering national defense interests or destroying national defense facilities.

(10) Strengthen administrative constraints and punishments of untrustworthy conduct, in accordance with laws and regulations. For seriously untrustworthy entities, all regions and all relevant departments should list them as key targets for supervision, employing administrative constraint and punishment measures in accordance with laws and regulations. Strictly review for administrative permits and review and approval of projects, strictly control the issuance of production licenses, restrict approvals of additional projects, restrict issuance of stocks on the market or issuance of bonds, restrict listing or financing in the national stock exchange, restrict the establishment or shareholding in financial institutions or small loan companies and finance guarantee companies, venture capital companies, internet financing platforms, and other such institutions, restrict engagement in internet information services, and so forth. Strictly restrict applications for government capital projects, restrict participation in public resource trading activities, and restrict participation in infrastructure and public utility franchises. Implement measures restricting market and industry entrance for enterprises with serious untrustworthy conduct as well as their legally-designated representatives, principle responsible persons, and registered practitioners with direct responsibility for the untrustworthy conduct. Promptly revoke honorifics given to seriously untrustworthy enterprises and persons such as their legally-designated representatives, responsible parties, senior management, and directors and shareholders with direct responsibility for the untrustworthy conduct, and cancel their eligibility to be selected and recognized for excellence.

(11) Strengthen market constraints and punishments for untrustworthy conduct. The relevant departments and institutions should index seriously untrustworthy entities according to a uniform social credit code, promptly releasing relevant information publicly, to facilitate market recognition of untrustworthy conduct and vigilance against untrustworthy conduct. Urge relevant enterprises and individuals to perform legally prescribed obligations, and for seriously untrustworthy entities that have the ability to perform but refuse to do so, restrict their exiting the country and purchase of real property, travel by plane, travel by higher class train seat, travel and vacation, stays in star-rated hotels, and other high-spending conduct. Support credit reporting institutions in collecting information on serious untrustworthy conduct and including it in credit records and credit reports. Guide commercial banks, securities and futures businesses, insurance companies, and other financial instititutions to follow the principle of pricing based on risk, to increase interest rates on loans and insurance rates for seriously untrustworthy entities, or to limit the provision of services to them such as giving loans, guarantees, underwriting, and insurance.

(12) Strengthen industry constraints and punishments of untrustworthy conduct. Establish and complete agreements on industry self-discipline and professional ethics codes, promoting the establishment of industry credit. Guide industry associations and chambers of commerce to complete internal industry credit information collection and sharing mechanisms, recording serious untrustworthy conduct in members' credit archives. Encourage industry associations and chambers of commerce to cooperate with qualified third party credit service institutions, to carry out credit rating and assessment of members. Support industry associations and chambers of commerce in giving punitive measures such as warnings, circulating criticisms, publicly censure, non-acceptance, and expulsion to untrustworthy members, on the basis of industry standards, rules, and agreements, and in light of the seriousness.

(13) Strengthen social constraint and punishment of untrustworthy acts. Fully bring into play the function of all kinds of social organizations, guiding social forces to broadly participate in joint disciplinary action against untrustworthiness. Establish and improve systems for reporting untrustworthiness, encouraging the public to report enterprises with serious untrustworthy conduct, and maintaining strict confidentiality of reporters' information. Support relevant social organizations in raising public interest litigation in accordance with law against mass torts such as environmental pollution and violations of consumers' or public investors' lawful rights and interests. Encourage fair and independent social institutions with the capacity to carry out big data monitoring of public sentiment on untrustworthy acts, assembling and publishing regional and industry credit analysis reports.

(14) Improve personal credit records, promote joint disciplinary action measures implementation down to the individual. When enterprises and public institutions' serious untrustworthy conduct is entered into their credit records, it should be simultaneously entered into the personal credit records of their legally-designated representative, principle responsible person, and other directly responsible personnel. At the same time that joint disciplinary action is conducted against untrustworthy enterprises and public institutions, corresponding joint disciplinary action should be taken against the relevant responsible persons, in accordance with laws, regulations, and policies. By establishing a complete database of individual credit records and joint disciplinary action mechanisms, make punishment measures for untrustworthiness reach down to the individual.

IV. Build mechanisms for coordinating joint incentives for trustworthiness and joint disciplinary action for untrustworthiness.

(15) Establish feedback trigger mechanisms. Under the Interdepartmental Joint Conference System for Establishment of the Social Credit System, establish mechanisms for the initiation of and response to joint incentives for trustworthiness and joint disciplinary action for untrustworthiness. Departments in all areas that initiate joint incentives for trustworthiness and joint disciplinary action for untrustworthiness are responsible for determining the targets for incentives or punishment; implementation departments are responsible for employing the joint incentives or joint disciplinary actions against relevant entities.

(16) Implement coordination between ministries and provinces, and concerted action across regions. Encourage all areas to initiate coordination between ministries and provinces, and cross-region joint incentives and punishments for exemplars of creditworthiness and seriously untrustworthy entities, within their administrative jurisdictions. Give full play to the guidance function of the Interdepartmental Joint Conference System for Establishment of the Social Credit System, establishing and completing cross-regional, interdepartmental, and cross-industry cooperative mechanisms for establishing the social credit system, and strengthen the sharing of credit information and the mutual recognition of credit appraisal results.

(17) Establish and improve mechanisms for publication of credit information. Promote disclosure of credit information in government affairs, comprehensively putting in place systems for online disclosure of administrative approvals and administrative punishments. Except as otherwise provided by law, people's governments at the county level or above, and their departments, should disclose all types of information such as administrative approvals and administrative punishment for natural persons, legal persons, or other organizations, through the government websites within 7 business days, and promptly aggregate it on the "China Credit" website, to provide society with 'one-stop' credit inquiry services. Information related to enterprises should be disclosed on the enterprise credit information publicity system in accordance with the Provisional Regulations on Release of Enterprise Information. Promote judicial organs' release of judicial judgments, the Judgment Defaulters List, and other credit information on the "China Credit" website.

(18) Establish and complete mechanisms for aggregating, sharing, and using credit information. Rely on the national electronic external network for government affairs to establish a national credit information sharing platform, giving play to its role as a hub for aggregating and sharing credit information. Accelerate the establishment and completion of credit information sharing platforms for all provinces (regions, municipalities) and credit information systems for all industries, promoting the establishment of projects such as a youth volunteers credit information system, aggregating the entirety of that region or that industry's credit information, and bringing about inter-connectivity and information sharing with the national credit information sharing platform. Relying on the national credit information sharing platform and on the basis of memoranda of cooperation signed by relevant departments, establish a credit information management system for joint incentives for trustworthiness and joint disciplinary action for untrustworthiness, to bring about dynamic coordination functions such as initiation and response, information transfer, enforcement feedback, credit restoration, and handling of objections. All levels of people's government and their departments should make inquiries to the national credit information sharing platform an embedded part of the work process for approvals and oversight and management work, ensuring that ;those that need to be checked are checked' and that 'rewards and punishments are in place. Complete mechanisms for information sharing between government and credit institutions, financial institutions, industry associations and chambers of commerce, and other such organizations, advancing the interaction and merging of government affairs credit information and social credit information, bringing into play the functions of joint incentives for trustworthiness and joint disciplinary action for untrustworthiness to the greatest extent possible.

(19) Standardize systems of red [positive] and black lists for credit information. Continuously improve the 'red list' system for exemplars of creditworthiness, and the 'black list' of seriously untrustworthy entities, standardizing the production and release of red and black lists across fields in accordance with laws and regulations, and establishing and completing mechanisms for removal from the list. With the prerequisite of preserving independence, fairness and objectivity, encourage relevant mass organizations, financial institutions, credit institutions, rating institutions, industry associations and chambers of commerce, and so forth, to provide 'red list' and 'black list' information they produce to government departments for their consideration and use.

(20) Establish a system for listing incentives and punishments. On the basis of memoranda of cooperation in relevant fields, organize laws, regulations, and policies to clarify matters on joint incentives and punishments, establish lists of measures for joint incentives for trustworthiness and joint disciplinary action for untrustworthiness, principly dividen into two categories: The first are mandatory measures, incentives and punishments that must be jointly enforced in accordance with law; and the other type are recommended measures that fit the policy orientation of praising creditworthiness and punishing untrustworthiness, and all areas and all departments may implement based on actual conditions. The Interdepartmental Joint Conference System for Establishment of the Social Credit System will summarize experiences to continuously improve the lists of both kind of measures, and promote the establishment of relevant laws and regulations.

(21) Establish and complete credit restoration mechanisms. The departments initiating and implementing joint disciplinary actions should follow the laws, regulations and policies to clarify the time period for all types of joint disciplinary action. Where the untrustworthy conduct is corrected during that period and the negative impact is eliminated, they are no longer a target of joint disciplinary action. Establish mechanisms for social encouragement and social care that are conducive to self-correction and actively turning over a new leaf, support individuals with untrustworthy conduct in restoring their personal credit through means such as public service.

(22) Establish and complete mechanisms for entities' protection of credit rights and interests. Establish and complete systems for objections and complaints on credit information. When relevant departments and units implementing joint disciplinary action measures for untrustworthiness learn that information is not accurate, whether through active discovery or through a market entity raising an objection or complaint, they should promptly notify the unit that provided the information to verify it, and that unit should verify and give feedback as quickly as possible. Enforcement of joint disciplinary action measures is temporarily stopped while the information is verified. Information that is found to be incorrect upon verification should be promptly corrected or withdrawn. Where the incorrect adoption of joint disciplinary action measures harms the lawful rights and interests of an entity, relevant departments and units should actively employ measures to restore their reputation and eliminate negative impact. Support relevant entities in preserving their own rights through means such as administrative reconsiderations and administrative litigation.

(23) Establish performance tracking mechanisms. All areas and all relevant departments should establish and improve all systems for the work of joint credit incentives and punishments, fully exploiting the national credit information sharing platform and relevant credit information management systems to establish and complete follow up, monitoring, statistics, and assessment mechanisms for joint credit incentives and punishments, and establish correspoding supervisory inspections and performance evaluation systems. Give notice and urge corrections where departments or units inadequately implement the collection and sharing of credit information and the incentive and punishment measures, to truly make each joint incentive and joint disciplinary action measure reach its goal.

V. Strengthen the system of laws and regulations and the establishment of a culture of creditworthiness.

(24) Improve relevant laws and regulations. Continuously research and debate legislation in the field of social credit. Accelerate research on legislation in areas such advancing the aggregation, sharing, disclosure, and use of credit information, as well as joint disciplinary action against untrustworthiness. In accordance with the requirement of strengthening credit restraints and coordinated management, each region and each department should submit amendment suggestions or conduct targeted revisions for relevant provisions of all current laws, regulations, rules, and normative documents.

(25) Establish and improve standards. Draft standards for collection, storage, sharing, disclosure, and use of credit information and for credit appraisals and categorical management of credit. Determine specifications for the establishment of all levels of credit information sharing platform, unifying data formats and data interfaces, and other such technical requirements. All regions and all departments should summarize actual conditions to draft work processes and operational specifications for credit information aggregation, sharing, disclosure, and use, as well as for joint incentives and joint disciplinary action.

(26) Strengthen education on creditworthiness, and the establishment of a culture of creditworthiness. Organize social forces on all sides, guiding the broader market entities to operate with creditworthiness in accordance with law, set up the idea of a 'prosperous good faith economy' organizing news media publicity on credit worthy enterprises and individuals through multiple channels, creating a strong social atmosphere. Strengthen moral constraints on untrustworthy conduct, improve mechanisms for supervising societal public opinion, using print, radio, television, and online media to expand the extent of supervision for untrustworthy entities, lawfully exposing heinous cases of untrustworthiness where the circumstances are serious, carrying out activities such as public deliberation, discussion, and appraisal; making pressure from public opinion and moral constraints on serious untrustworthy conduct. Strengthen education and aid to the untrustworthy through schools, units, communities, and families, and guide them to promptly correct their untrustworthy conduct. Strengthen publicity and education about creditworthiness for enterprises' responsible parties, students, and youth groups; strengthen the establishment of professional ethics with creditworthy as a key content for key personnel groups such as accountants, auditors, tour guides, insurance brokers, and public personnel. Expand promotional reporting and case analysis for joint incentives for trustworthiness and joint disciplinary action for untrustworthiness, carrying forward the core socialist values.

(27) Strengthen organizational implementation and supervisory inspections. All areas and all relevant departments should make implementation of joint incentives for trustworthiness and joint disciplinary action for untrustworthiness an important measure for promoting the establishment of the social credit system, earnestly implementing these opinions and formulating specific implementation plans to truly strengthen organizational leadership, put necessary guarantees in place such as for work organizations, personnel allotments, and program fees, ensuring that all joint incentive and joint punishment measures are done adequately. Encourage relevant regions and departments to take the lead in experimenting, using the signing of memoranda of cooperation, issuing normative documents, and other various means to establish long-term effective mechanisms and continuously enrich the content of credit incentives and strengthen credit constraint measures. The National Development and Reform Commission should strengthen overall coordination, promptly follow up to get a hold on work progress, supervise and inspect the implementation of tasks, and report this to the State Council.

State Council
May 30, 2016
(for public release)