- On 14 November, NDRC published the long-awaited draft of the „Social Credit System Establishment Law“. The draft was compiled by NDRC and the People’s Bank of China and the commenting period ends on 14 December 2022.
- It is obvious that the draft shows the law in an early drafting stage. In many passages, the language is more typical for a policy document instead of a law. Until implementation significant work remains to be done.
- In terms of content, the draft is fully consistent with all recent Social Credit System development efforts, but it also helps to clarify some key facts:
- The Social Credit System’s key targets are companies and businesses of all kinds. The main goal of its establishment is to achieve integrity and trustworthiness of market players.
- Beyond companies, also some of their employees in their professional role are covered.
- The Law outlines all areas in which the Social Credit System is supposed to cover companies by blacklists and/or ratings. Sinolytics’ analysis of the system and our experience from on-the-ground projects shows: All these areas do already have an established blacklist or rating.
- Some, of course, lack efficient implementation, others have data collection or sharing issues. But in one way or the other, all areas are already covered by legally effective rules and regulations.
- No matter how long it lasts until the Social Credit System Law comes into effect, the Social Credit System already impacts all companies with registered entities in China in their regulatory compliance. Sometimes still without their knowledge.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.