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| Credit and Financial Checks
February 8 2018

Should you be concerned about the personal credit system and privacy provisions in China?

The People's Republic of China is making progress in implementing its mandatory "social credit system", and is advising multinational businesses in China to be aware of it.

The social credit system is a national credit score for each citizen and business, and is one that reflects more than just creditworthiness. While the system is voluntary during an initial pilot stage, and run by nominally private entities, the Chinese government has indicated that by 2020 it will have established fundamental laws, regulations and standard systems for social credit and will give complete rein to mechanisms to encourage compliance. Media sources have indicated that the government will at that point officially control the system, which will then be mandatory.

Local governments are also presently working to set up their own social credit systems. Information collected in the systems of local governments, government agencies, and private entities will eventually be funnelled into a national database.