Home News China Chinese local govts pay off 3.3b yuan debt for social credit system

Chinese local govts pay off 3.3b yuan debt for social credit system

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By Zhang Han Source:Global Times

The Chinese central government said Thursday that local governments which had been listed as dishonest entities have paid off debt of over 3.3 billion yuan ($475.5 million), as dishonest persons will be barred from taking public transportation in the country.

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National Development and Reform Commission (NDRC) has been targeting local governments’ dishonest behavior since 2017, which is an essential part of building a vital social credit system in China, NDRC spokesperson Meng Wei said at a press conference in Beijing on Thursday.

Dishonest entities usually involved people, legal persons of enterprises and social organizations. But media reports found out more than 100 local governments had been listed as dishonest entities.

Top officials of dishonest governments are banned from taking high-speed railway, consuming in golf courts and high-end hotels, and purchasing real estate, according to the regulations of China’s Supreme People’s Court.

Zhu Wei, a professor at the China University of Political Science and Law in Beijing, noted being listed as dishonest entities serves as a warning to local governments that they are not only administrative entities, but also civil subjects that should abide by civil laws.

Local governments sometimes default on construction project money and demolition compensation, violating civil laws and damaging their trustworthy image, Zhu told the Global Times on Thursday.

Top officials of dishonest governments will be questioned by a social credit construction organ at the provincial level to rectify dishonest behavior, Meng said at the press conference.

Dishonest governments will also be reported to commercial banks, which would have an impact on the amount of loans banks could grant them. Government dishonesty will also lead to a downgrade in their city credit ranking, Meng noted.

Low credit ranking and a bad record at financial institutions will discourage potential investors. Therefore, the method is effective in regulating government behavior, Zhu noted.

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