Chinese businesses will benefit greatly from an established social credit system, an economy expert said, adding that such a structure will help improve the local business environment.
In an op-ed for Caixin Global, an associate research fellow at the Chinese Academy of Macroeconomic Research, Li Qingbin, wrote that a supervision system for business credits will help boost high-quality development in the economy.
Li explained that China has a large number of market entities, with trading exchanges happening frequently. However, he argued that there is still a need to establish regulatory resources for business-related credits.
Aside from improving the overall business environment in China, corporate credit can also play a key role in gauging whether a particular business is trustworthy or not. A standardized system will also determine which businesses are at high risk of violations, Li explained.
Li further noted that while some analysts have predicted a standardized credit system to be completed by 2020, there has been no confirmation from Beijing as of late. Despite the delay in establishing the system, Li said the Chinese government is committed to delivering a structure shortly.
A unified social credit code system is already in place to help keep track of the country's market subjects. Li said this particular system may not be available in other western nations.
Late last month, it was reported that China is expanding its social credit scheme to bring to the law offenders who were found to be involved in social security fraud. On the other hand, the scheme will also reward those who will be encouraged to donate blood through the program.
Director of Beijing's blood donation unit, Liu Jiang, said at that time that the country should show donors that it cares "so they feel honored" in their voluntary service of helping save lives.
The social credit system is expected to be rolled out officially next year. However, as Li explained, Beijing has yet to confirm the news. Also, some analysts are expecting more detailed aspects of the scheme for business owners and corporate entities in the country.
Meanwhile, chairman and CEO of Opera Limited, Zhou Yahui, said this week that to speed up the establishment of a social and corporate credit system, internet data should be utilized appropriately.
Improved mobile internet technologies and faster data speeds will help bolster progress in creating a more rounded credit system that should help China achieve its goal of providing citizens with better business and social ecosystems.
It remains to be seen whether Beijing will announce the system's rollout sometime early next year or within the first quarter.
