The State Council issues the implementation plan, proposing 12 specific measures to gradually establish a unified comprehensive evaluation system for corporate credit status.

◎Reporter Yu Xiangming

The Implementation Plan for Establishing a Comprehensive Corporate Credit Assessment System (hereinafter referred to as the “Implementation Plan”) recently issued by the General Office of the State Council mentions accelerating the integration and application of public credit assessment and market-based credit assessment, and encouraging operating entities in market activities such as bidding for public procurement and commercial dealings to provide preferential or convenient measures to enterprises with good credit standing.

Experts said that the policy’s encouragement of providing preferential treatment to enterprises with good credit in market activities such as bidding and commercial dealings, in essence, is aimed at making credit a “hard currency” for market transactions. Against the backdrop of building a nationwide unified large market, a company’s good credit record can directly lead to lower transaction costs, better financing terms, more business opportunities, and stronger market competitiveness. This helps reduce society-wide institutional transaction costs and is a concrete reflection of efforts to optimize the business environment.

The Implementation Plan puts forward 12 specific measures, of which “establishing the institutional framework for a comprehensive corporate credit assessment system” ranks first. According to the Implementation Plan, to better play the foundational role of public credit assessment results in the comprehensive corporate credit assessment, public credit assessment and market-based credit assessment should be promoted to integrate with each other, gradually forming a unified comprehensive corporate credit assessment system.

He Ling, Director of the Comprehensive Evaluation Division of the Business Environment Development and Promotion Center under the National Development and Reform Commission, said that the social credit system is a fundamental institutional arrangement for a market economy. The Implementation Plan clarifies the complementary relationship between public credit assessment and market-based credit assessment, defines their respective connotations and boundaries, will promote two-way integration of the two types of information, and help achieve a government that is “more effective where it should be,” and a market that is “more efficient where it can be.”

The Implementation Plan has deployed specific work in areas such as improving the public credit assessment system, unifying public credit assessment rules, unifying the administration of industry credit assessment, and unifying the channels for disclosure of public credit assessment results.

Experts assess that this will, at the institutional level, remove market barriers, address the pain points caused by inconsistencies in assessment rules across different regions and departments and the lack of mutual recognition of results, and thereby allow enterprises with good credit to enjoy more “credit dividends” in areas such as financing and bidding, significantly reducing institutional transaction costs.

Regarding the unification of public credit assessment rules, the Implementation Plan proposes that the data for public credit assessment indicators should, in principle, come from public credit information. Where appropriate, other information generated or obtained by relevant departments in fulfilling their duties that can reflect an enterprise’s credit standing may be included within the scope of the indicator data. Assessment results, from highest to lowest, are generally divided into four tiers: “A,” “B,” “C,” and “D.” If assessment results use a scoring system, the score ranges corresponding to the four tiers should be clearly defined. For two assessments of the same entity, the maximum interval should not exceed one year; where feasible, departments may increase assessment frequency according to the actual situation.

Experts said that in terms of assessment rules, the Implementation Plan unifies the sources of indicator data, the result tiers, and the assessment cycle, and also specifies that the maximum assessment cycle should not exceed one year. Assessment rules should be made public to society, which will allow enterprises to clearly know where their credit is “good” and where it is “poor.”

The Implementation Plan also proposes accelerating the integration and application of public credit assessment and market-based credit assessment, and encouraging operating entities in market activities such as bidding for procurement and commercial dealings to provide preferential or convenient measures to enterprises with good credit standing. At the same time, it will better leverage credit assessment’s support for financing by small and micro enterprises. Financial institutions are encouraged to rely on the network of the national integrated financing credit service platform, to use public credit assessment results appropriately, and to improve credit granting, risk assessment, and interest and fee pricing models. Enterprises with higher credit assessment tiers are encouraged to have lower requirements for pledge, mortgage, or guarantee arrangements, while the coverage of credit loans should be expanded step by step and the proportion of credit loans increased.

Yang Chang, Chief Analyst of the Policy Team at BOC Securities, said in an interview with Shanghai Securities News that establishing a comprehensive corporate credit assessment system is conducive to grasping, from a macro level, the overall credit level of enterprises in different regions and of different categories, and to provide corresponding policy inputs in response to changes in macro credit levels. By precisely portraying enterprises’ credit situations, it can help reduce information asymmetry among enterprises, between enterprises and the government, and between enterprises and residents, and lower transaction costs.

(Editor: Wen Jing)

Keywords:

                                                            Enterprise
                                                            Credit