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Order No. 4 [2021] of the People’s Bank of China (Measures for the Administration of Credit Reporting Services)

Order No. 4 [2021] of the People’s Bank of China

The Measuresfor the Administration of Credit Reporting Services, adopted on September 17, 2021 at the ninth executive meeting of the People’s Bank of China in 2021, is hereby issued and shall come into force as of January 1, 2022.

Yi Gang, Governor of the People’s Bank of China

September 27, 2021

Measures for the Administration of Credit Reporting Services

Chapter I General Provisions

Article 1 This Measures is formulated in accordance with the Law of the People Republic of China on the People Bank of China, the Personal Information Protection Law of the People Republic of China, the Regulation on the Administration of Credit Reporting Industry, and other applicable laws and regulations to regulate credit reporting services and related activities, protect the legitimate rights and interests of information subjects, promote the healthy development of the credit reporting industry, and strengthen the social credit system.

Article 2 This Measures applies to the credit reporting services and related activities conducted within the mainland of the People’s Republic of China in relation to corporations and unincorporated organizations (hereinafter referred to as “enterprises”) and individuals.

Article 3 For the purpose of this Measures, credit reporting services refer to the collection, organization, preservation, and processing of the credit information of enterprises and individuals and the provision of such credit information to information users.

For the purpose of this Measures, credit information refers to the basic information, lending information, and other relevant information lawfully collected to identify and assess the credit status of enterprises and individuals to facilitate financial and other activities, as well as the analyses and evaluations made based on the forgoing information.

Article 4 Businesses that engage in credit reporting services for individuals shall lawfully obtain the consumer credit reporting agency license from the People’s Bank of China (“PBC”); businesses that engage in credit reporting services for enterprises shall lawfully complete the filing process for commercial credit reporting agencies; businesses that engage in credit rating services shall lawfully complete the filing process for credit rating agencies.

Article 5 Financial institutions shall not enter a business relationship with any market entity for its credit services if the market entity is not legally qualified to provide credit reporting services.

For the purpose of this Measures, financial institution refers to any institution that engages in financial business under the regulation and supervision of the financial regulatory authority under the State Council.

Local financial organizations regulated and supervised by local financial regulatory authorities are subject to the provisions of this Measures on financial institutions.

Article 6 Any businesses that engage in credit reporting services and related activities shall protect the lawful rights and interests of the information subjects, ensure the safety and security of information, and prevent the leakage, loss, destruction, or misuse of credit information, and shall not undermine state secrets, invade personal privacy, or commit breach of confidential business information.

Credit reporting services and related activities shall be conducted on an independent, objective, and impartial basis and shall not violate relevant laws and regulations or offend public order or good morals.

Chapter II Collection of Credit Information

Article 7 Consumer credit information shall be collected in a lawful and proper manner, in accordance with the principles of data minimization, and strictly on an “as needed” basis.

Article 8 A credit reporting agency shall not collect credit information:

(1) through deception, coercion, or inducement;

(2) by charging a fee from the information subjects;

(3) through illegitimate channels; or

(4) through any other method that harms the legitimate rights and interests of the information subjects.

Article 9 Where a credit reporting agency obtains credit information from an information provider, the credit reporting agency shall establish relevant rules to conduct the necessary checks on such matters as the source, quality, and safety and security of such information and the authorization from the information subjects.

Article 10 Credit reporting agencies and information providers, in conducting business and collaborations, shall comply with laws and regulations including the Personal Information Protection Law of the People Republic of China and specify, through an agreement or other means, the principles governing information collection and their respective rights, obligations, and responsibilities in relation to such matters as the obtainment of customer consent; the collection, processing, and correction of information; dispute resolution; and information safety and security.

Article 11 Any credit reporting agency that engages in consumer credit reporting services shall develop an information collection plan and report to the PBC such matters as the data items to be collected, source of information, methods of collection, and rules governing the protection of information subjects as well as any changes to the foregoing.

Article 12 Any credit reporting agency that collects consumer credit information shall obtain consent from the information subjects and expressly inform them of the purpose of collection, except for information that is made publicly available according to laws and regulations.

Article 13 Where a credit reporting agency obtains personal consent through an information provider, the information provider shall fulfil the informing obligation to relevant information subjects.

Article 14 Each consumer credit reporting agency shall report to the PBC its partnering information providers that collect, organize, process, and analyze consumer credit information.

A consumer credit reporting agency shall standardize its collaboration agreements with information providers. An information provider shall accept the risk assessments conducted by consumer credit reporting agencies and the fact checks by the PBC with respect to its handling of consumer credit information.

Article 15 Enterprise credit information shall be collected for lawful purposes and not in a manner that constitutes a breach of confidential business information.

Chapter III Organization, Preservation, and Processing of Credit Information

Article 16 A credit reporting agency shall observe the principles of objectivity in organizing, preserving, and processing credit information and shall not tamper with the original information.

Article 17 A credit reporting agency shall take Measures to improve the accuracy of information in its credit reporting system and ensure the quality of information.

Article 18 Where a credit reporting agency identifies any error in credit information during information organization, preservation, or processing, it shall promptly notify the relevant information provider to make corrections if the error is transmitted from the information provider, or promptly correct the error and optimize its internal processing procedures for credit information if the error originates from its internal processing.

Article 19 A credit reporting agency shall cross-check the information obtained from different information providers and verify and resolve inconsistencies in a timely manner.

Article 20 Each credit reporting agency shall retain an individual’s negative entry for five years from the day when the negative behavior or event ceases to exist.

Upon the expiration of this retention period, the negative entry shall be removed by the credit reporting agency from its external services and applications, or, if it is to be used as sample data, be anonymized.

Chapter IV Provision and Use of Credit Information

Article 21 In providing credit reporting products and services to external parties, a credit reporting agency shall observe the principle of fairness by not establishing any unreasonable commercial terms and conditions that restrict the use of information by different information users or by taking advantage of its position to provide discriminatory or exclusive products and services.

Article 22 Credit reporting agencies shall take appropriate Measures to check the identity, business qualifications, purpose of use of information, and other pertinent aspects of information users.

Credit reporting agencies shall assess the security and compliance management Measures of the networks and systems used by information users to access the credit reporting system, and shall monitor their queries. A credit reporting agency shall promptly verify any security risk or abnormal behavior and, upon discovering any illegal activity or misconduct, terminate its service.

Article 23 Each information user shall take the necessary Measures to ensure that it has obtained the consent of the relevant information subjects when querying consumer credit information and that it is using such information for the purposes agreed upon.

Article 24 An information user shall use the credit information provided by a credit reporting agency for lawful and legitimate purposes and shall not misuse it.

Article 25 Each individual information subject is entitled to his own credit report twice a year without charge. Credit reporting agencies may provide such credit report services over the internet, at places of business, or by other means.

Article 26 An information subject believing that there is any error or omission in its credit information may file a dispute with the relevant credit reporting agency or information provider. An information subject believing that its legitimate rights and interests are violated may file a complaint with the relevant branch of the PBC. Such disputes and complaints shall be handled in accordance the Regulation on the Administration of Credit Investigation Industry and other relevant provisions.

Article 27 No credit reporting agency may charge information subjects a fee for removing or not collecting negative entries.

Article 28 A credit reporting agency that provides credit reports and other credit information products and services shall present the requested credit information in an objective manner and provide explanations on the contents and specialized terms therein.

An information subject has the right to require a credit reporting agency to include a note of dispute or a consumer statement in its credit report.

Article 29 Any credit reporting agency that provides credit assessment products and services, such as credit profiling, scoring, or rating, shall establish the assessment criteria, which may not contain any element that is irrelevant to the credit status of the information subjects.

Before officially providing credit assessment products or services to external parties, a credit reporting agency shall perform the necessary internal tests and assessment and verification procedures to ensure its evaluation rules can be explained and the information is traceable.

Credit reporting agencies that provide credit rating products and services for economic entities or debt financing instruments shall conduct such businesses in accordance with the Interim Measures for the Administration of Credit Rating Industry (Order No. 5 [2019] of the People’s Bank of China, the National Development and Reform Commission, the Ministry of Finance, and the China Securities Regulatory Commission) and other relevant provisions.

Article 30 A credit reporting agency that offers anti-credit fraud products and services shall establish the criteria for determining fraudulent credit information.

Article 31 A credit reporting agency that offers credit information query, credit evaluation, and anti-credit fraud products and services shall submit the following to the PBC or one of its branches at or above the level of central sub-branch of the capital city of a province or autonomous region:

(1) the template and contents of its credit report;

(2) the assessment methodology, models, and major analytical dimensions and elements of its credit assessment products and services; and

(3) for anti-fraud products and services, the sources of data and determination criteria for fraudulent credit information.

Article 32 No credit reporting agency may:

(1) make promises on the results of credit assessment;

(2) advertise products and services using implicit languages in regard to the credit assessment results;

(3) market its products or services in the name of government agencies or trade associations without their consent;

(4) provide credit reporting products or services to information subjects or information users through coercion, deception, or inducement;

(5) engage in false advertising for its credit reporting products or services; or

(6) offer any other credit reporting products or services that would undermine the objectivity and impartiality of credit reporting services.

Chapter V Safety and Security of Credit Information

Article 33 Credit reporting agencies shall implement the cybersecurity multi-level protection scheme; establish security protocols for relevant business activities, equipment, and facilities; and take effective safeguards to ensure the safety and security of the credit reporting system.

Article 34 Each consumer credit reporting company and each commercial credit reporting company that preserves or processes the credit information of 1,000,000 or more enterprises shall meet the following requirements:

(1) the core business information system has attained Level 3 in the cybersecurity multi-level protection scheme or above;

(2) the positions of head of information security and head of personal information protection have been established and are assumed by the officers designated in the corporate articles of association; and

(3) a specialized department is set up which is responsible for information security and protection of personal information and for periodically reviewing the enforcement of rules and regulations on credit reporting services, system safety and security, and protection of personal information.

Article 35 A credit reporting agency shall ensure the safety and security of the operational facilities and equipment, security control facilities and equipment, and internet application programs of its credit reporting system; properly manage the system’s day-to-day operation and maintenance; and ensure the safety and security of the physical system, communication networks, zone boundaries, computing environment, and administration center, to protect the credit reporting system from unauthorized access and sabotage.

Article 36 A credit reporting agency shall properly manage the personnel-related safety and security issues in relation to recruitment, termination, evaluation, safety and security education, training, and visitor management.

Article 37 A credit reporting agency shall strictly limit the authority and scope of its staff members who can query and access credit information through internal systems.

A credit reporting agency shall retain the activity log of its staff members ’ query and access of credit information, which should clearly record the time, method, contents, and purpose of such queries and access.

Article 38 A credit reporting agency shall have in place an emergency response framework such that, at the occurrence or likely occurrence of a leak of credit information or a similar event, it can take immediate and necessary actions to mitigate the damage and promptly report the situation to the PBC and one of its branches at or above the level of central sub-branch of the capital city of a province or autonomous region.

Article 39 With respect to the credit reporting services and related activities provided or conducted within the mainland of the People’s Republic of China by a credit reporting agency, the enterprise and consumer credit information so collected shall be stored within the mainland of the People’s Republic of China.

Article 40 A credit reporting agency shall comply with applicable laws and regulations when providing consumer credit information to overseas parties.

Any credit reporting agency that offers enterprise-credit-information query products and services to overseas information users shall conduct the necessary checks on the identity of the information users and their purposes of use, so as to ensure that such information is used for cross-border trades, investment and financing, or other reasonable purposes and will not harm national security.

Article 41 Any credit reporting agency that collaborates with an overseas credit reporting agency shall file the collaboration agreement with the PBC after executing it and before commencing the collaboration program.

Chapter VI Supervision

Article 42 A credit reporting agency shall disclose the following information to the public and accept public supervision:

(1) the types of credit information collected;

(2) the basic format and contents of the credit report;

(3) the dispute handling process; and

(4) other items whose disclosure is deemed necessary by the PBC.

Article 43 A consumer credit reporting company shall conduct annual audits of the compliance of its consumer credit reporting services with the Personal Information Protection Law of the People Republic of China and the Regulation on the Administration of Credit Investigation Industry, and submit the compliance audit reports to the PBC in a timely manner.

Article 44 The PBC and its branches at or above the level of central sub-branch of the capital city of a province or autonomous region shall supervise and inspect the following aspects of a credit reporting agency:

(1) its internal controls for credit reporting services, including the completeness, compliance, and viability of various rules and procedures;

(2) the state of compliance of its credit reporting services, covering the compliance of its collection of credit information, provision and use of credit information, handling of disputes and complaints, user management, and other relevant matters;

(3) the safety and security of its credit reporting system, covering IT rules, security management, and system development; and

(4) other aspects related to its credit reporting activities.

Article 45 The PBC and its branches at or above the level of central sub-branch of the capital city of a province or autonomous region shall inspect and penalize any information provider or information user that violates the provisions of the Regulation on the Administration of Credit Investigation Industry by harming the legitimate rights and interests of information subjects.

Chapter VII Legal Liabilities

Article 46 Any businesses that violate Article 4 of this Measures by engaging in consumer credit reporting services without approval will be penalized by the PBC in accordance with Article 36 of the Regulation on the Administration of Credit Investigation Industry. Any businesses that engage in enterprise credit reporting services without approval will be penalized by the relevant PBC branches at or above the level of central sub-branch of the capital city of a province or autonomous region in accordance with Article 37 of the Regulation on the Administration of Credit Investigation Industry.

Where a financial institution violates Article 5 of this Measures by entering a business relationship with a market entity for credit reporting services even though the market entity is not legally qualified to provide such services, the PBC shall order the financial institution to make corrections and impose a fine of not more than RMB30,000 on the financial institution and a fine of not more than RMB1,000 on the person-in-charge with direct responsibilities.

Article 47 A credit reporting agency that violates Article 8, Article 16, Article 20, Article 27, or Article 32 of this Measures will be penalized by the PBC or the relevant branches at or above the level of central sub-branch of the capital city of a province or autonomous region in accordance with Article 38 of the Regulation on the Administration of Credit Investigation Industry.

Article 48 A credit reporting agency that violates Article 14, Article 21, Article 31, Article 34, Article 39, or Article 42 of this Measures will be ordered to make corrections by the PBC or the relevant PBC branches at or above the level of central sub-branch of the capital city of a province or autonomous region, have its illegal gains confiscated, and be imposed a fine of not more than RMB30,000 on the credit reporting agency itself and a fine of not more than RMB1,000 on the person-in-charge with direct responsibilities. Where laws and administrative regulations provide otherwise, those provisions shall prevail.

Chapter VIII Ancillary Provisions

Article 49 This Measures applies mutatis mutandis to the submission and query of credit information at the Financial Credit Information Basic Database by institutions connected to the database and engaged in credit reporting services or lending activities.

Article 50 This Measures applies to institutions that substantively provide credit reporting services to external parties in the name of “credit information service,” “credit service,” “credit scoring,” “credit rating,” or “credit repair.”

Article 51 Institutions that substantively engage in credit reporting services but have not obtained license for consumer credit reporting services or completed filing for commercial credit reporting companies before the effectiveness of this Measures, shall achieve compliance within 18 months from the effectiveness of this Measures.

Article 52 The PBC reserves the right to interpret this Measures.

Article 53 This Measures takes effect on January 1, 2022.

Regulation on the Administration of Credit Investigation Industry

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(Order of the State Council of the People’s Republic of China No. 631)

The Regulation on the Administration of Credit Investigation Industry, as adopted at the 228th executive meeting of the State Council on December 26, 2012, is hereby issued, and shall come into force on March 15, 2013.

Premier Wen Jiabao

January 21, 2013

Chapter I General Provisions

Article 1 This Regulation is made to regulate credit investigation activities, protect the legal rights and interests of the parties concerned, guide and promote the healthy development of credit investigation industry and enhance the building of the social credit system.

Article 2 This Regulation applies to credit investigation and the relevant activities carried out inside China. For the purpose of this Regulation, the term“credit investigation” refers to activities of collecting, arranging, saving and processing the credit information of enterprises, public institutions and other organizations (hereinafter referred to as “enterprises”) as well as individuals, and providing it to information users. The collection, arrangement, saving, processing and provision of information by the Basic Financial Credit Information Database formed by the state shall be governed by Chapter V of this Regulation. This Regulation is not applicable when state organs, or organizations authorized bylaws or regulations with the function of administering public affairs, collect, arrange, save, process and publish information of enterprises and individuals for the purpose of performing duties under laws, administrative regulations and the State Council provisions.

Article 3 Those engaged in credit investigation and the relevant activities shall abide bylaws and regulations and keep good faith, and may not endanger state secrets or infringe upon trade secrets or personal privacy.

Article 4 The People’s Bank of China (hereinafter referred to as “the supervisory and administrative department of credit investigation under the State Council”) and its local offices shall supervise and administer credit investigation industry by law. The local people’s governments at or above the county level and the relevant departments under the State Council shall enhance the building of social credit systems in the local regions and the relevant industries, develop the credit investigation market and promote the development of credit investigation industry.

Chapter II Credit Investigation Institutions

Article 5 For the purpose of this Regulation, the term “credit investigation institution” refers to legally formed institutions mainly engaged in credit investigation.

Article 6 To form a credit investigation institution engaged in individual credit investigation, it is required to satisfy the following conditions in addition to those set forth by the Company Law of the People’s Republic of China for the formation of companies, and obtain the approval of the supervisory and administrative department of credit investigation under the State Council:

1. Its principal shareholders have a good credit standing and have no record of gross violations of laws or regulations in the last three years;

2. Its registered capital is not less than 50 million yuan;

3. It is equipped with facilities, devices, systems and measures which satisfy the requirements of the supervisory and administrative department of credit investigation under the State Council to ensure information security;

4. Persons to be its directors, supervisors and senior managers satisfy the eligibility requirements as set forth by Article 8 of this Regulation; and

5. Other prudential conditions as set forth by the supervisory and administrative department of credit investigation under the State Council.

Article 7 To apply for forming a credit investigation institution engaged in individual credit investigation, the applicant shall submit an application form and materials proving its satisfaction of conditions specified in Article 6 of this Regulation to the supervisory and administrative department of credit investigation under the State Council. The supervisory and administrative department of credit investigation under the State Council shall examine the application by law, and make a decision of approval or disapproval within 60 days after accepting the application. In the case of approval, it shall issue an individual credit investigation business operation permit; in the case of disapproval, it shall give reasons in writing. A credit investigation institution formed to operate individual credit investigation business upon approval shall handle registration formalities at the company registration organ on the basis of the individual credit investigation business operation permit. No entity or individual may engage in individual credit investigation without the approval of the supervisory and administrative department of credit investigation under the State Council.

Article 8 The directors, supervisors and senior managers of a credit investigation institution engaged in individual credit investigation shall be familiar with laws and regulations governing credit investigation, have experience and management ability required for performing duties in credit investigation industry, have no record of gross violations of laws or regulations in the last three years, and have the qualification ratified by the supervisory and administrative department of credit investigation under the State Council.

Article 9 For the formation of branch offices, merger or split, change of registered capital, or change of shareholders whose investment accounts for 5% or more of the total capital or shareholders holding shares accounting for 5% or more of the total shares, a credit investigation institution engaged in individual credit investigation shall obtain the approval of the supervisory and administrative department of credit investigation under the State Council. For the change of name, a credit investigation institution engaged in individual credit investigation shall file it with the supervisory and administrative department of credit investigation under the State Council.

Article 10 To form a credit investigation institution engaged in enterprise credit investigation, it is required to satisfy conditions set forth by the Company Law of the People’s Republic of China, and, on the basis of the following materials, handle filing formalities at the local office of the supervisory and administrative department of credit investigation under the State Council within 30 days after its registration is approved by the company registration organ:

1. its business license;

2. an explanation on its equity structure or organizational setup;

3. basic information about its scope of business, business rules and business systems; and

4. information security and risk prevention measures. For any change in matters to be filed, it is required to handle modification formalities at the original filing organ within 30 days as of the day of change.

Article 11 Credit investigation institutions shall report their credit investigation business operations of the last year according to the requirements of the supervisory and administrative department of credit investigation under the State Council. The supervisory and administrative department of credit investigation under the State Council shall announce the lists of credit investigation institutions engaged in individual credit investigation and those engaged in enterprise credit investigation to the general public, and update such lists betimes.

Article 12 When a credit investigation institution is dissolved or lawfully declared bankrupt, it is required to report to the supervisory and administrative department of credit investigation under the State Council, and dispose of its information database in the following way:

1. transferring the database to another credit investigation institution if it has reached an agreement thereon with the said credit investigation institution and obtained the approval of the supervisory and administrative department of credit investigation under the State Council;

2. transferring the database to a credit investigation institution designated by the supervisory and administrative department of credit investigation under the State Council when it fails to transfer the database in the way described in the preceding paragraph; or

3. destroying the database under the supervision of the supervisory and administrative department of credit investigation under the State Council when it fails to transfer the database in the way described in either of the preceding paragraphs. When a credit investigation institution engaged in individual credit investigation is dissolved or lawfully declared bankrupt, it shall make an announcement at a medium designated by the supervisory and administrative department of credit investigation under the State Council, and surrender its individual credit investigation business operation permit to the supervisory and administrative department of credit investigation under the State Council for cancellation.

Chapter III Credit Investigation Rules

Article 13 To collect personal information, it is required to obtain the consent of the subject of the information. Otherwise, it may not be collected, unless for information which should be disclosed under laws or administrative regulations. Information about the performance of duties by directors, supervisors or senior managers of enterprises is not categorized as individual information.

Article 14 Credit investigation institutions are prohibited to collect information about the religious belief, gene, fingerprints, bloodtype, disease or medical history of individuals, as well as other individual information the collection of which is prohibited bylaws or administrative regulations. Credit investigation institutions may not collect information about the income, deposit, negotiable securities, commercial insurance, real property or taxes of individuals, unless they have expressly informed the individuals concerned of the possible adverse consequences that may be brought along with the provision of such information and have obtained their written consent.

Article 15 Before providing bad information about an individual to a credit investigation institution, the provider shall inform the said individual, unless for bad information that should be disclosed under laws or administrative regulations.

Article 16 Credit investigation institutions shall keep the bad information of individuals for five years from the daywhen the bad behavior or event stops. Upon the expiration of five years, such information shall be deleted. During the period of retention of bad information, the subject of the bad information may make an explanation on the bad information, and the credit investigation institutionshall put it on record.

Article 17 Information subjects may inquire of credit investigation institutions about their information. Individual subjects have the right to have access to their own credit reports twice every year without paying fees.

Article 18 To inquire of credit investigation institutions about personal information, it is required to obtain the written consent of the information subject and reach an agreement with the subject on the use of such information, except for information which can be inquired about without consent as prescribed bylaws. Credit investigation institutions may not provide personal information in violation of the preceding paragraph.

Article 19 A credit investigation institution, information provider or information user shall, when using a format contract to obtain the consent of the individual information subject, give prompts conspicuous enough to catch the attention of the individual and make explicit explanations as required by the individual.

Article 20 Information users shall use the personal information according to the stipulations in the agreement with the individual information subjects, and may not use it for other purposes or provide it to third parties without the consent of individual information subjects.

Article 21 Credit investigation institutions may collect enterprise information from sources such as information provided by information subjects, counterparties of enterprises and industry associations, information lawfully disclosed by the relevant governmental departments and judgments or decisions announced by people’s courts. Credit investigation institutions may not collect enterprise information the collection of which is prohibited bylaws or administrative regulations.

Article 22 Credit investigation institutions shall, according to the provisions of the supervisory and administrative department of credit investigation under the State Council, establish, improve and strictly implement information security rules, and take effective technical measures to guarantee information security. Credit investigation institutions engaged in individual credit investigation shall explicitly specify their staff members’ privileges and procedures to inquire about personal information, and register the inquiries made by their staff members about personal information by truthfully recording the name of staff members making inquiries, the time of inquiry, and the content and use of information. Staff members may not inquire about information in violation of the prescribed privileges or procedures or divulge information which they have access to in work.

Article 23 Credit investigation institutions shall take reasonable measures to ensure the accuracy of information provided by them. Information provided by credit investigation institutions may be used by information users as reference.

Article 24 For information collected inside China, credit investigation institutions shall arrange, save and process it inside China. To provide information to overseas organizations or individuals, credit investigation institutions shall abide bylaws, administrative regulations and the relevant provisions of the supervisory and administrative department of credit investigation under the State Council.

Chapter IV Demurs and Complaints

Article 25 An information subject holding that there is any error or omission in the information collected, saved or provided by a credit investigation institution has the right to raise a demur to the credit investigation institution or information provider, requesting for a correction. After receiving such a demur, the credit investigation institution or information provider shall label the information concerned as demurred at according to the provisions of the supervisory and administrative department of credit investigation under the State Council, check and handle it within 20 days as of the day when the demur is received, and give a written reply to the demurrer. If it is found out upon check that there is an error or omission, the information provider or credit investigation institution shall correct it; if it has been confirmed that there is no error or omission, the label shall be removed; if it is unable to decide whether there is an error or omission upon check, the checking process and the demur shall be put on record.

Article 26 Information subjects holding that any credit investigation institutions, information providers or information users have infringed upon their legal rights and interests may lodge complaints to the local offices of the supervisory and administrative department of credit investigation under the State Council. The local offices of the supervisory and administrative department of credit investigation under the State Council shall check and handle in a timely manner, and give written replies to complainants within 30 days as of the date of acceptance. Information subjects holding that any credit investigation institutions, information providers or information users have infringed upon their legal rights and interests may directly bring charges to people’s courts.

Chapter V Basic Financial Credit Information Database

Article 27 The state shall establish a Basic Financial Credit Information Database to provide information services for preventing financial risks and enhancing the development of the financial sector. The Basic Financial Credit Information Database shall be built, run and maintained by a specialized non-for-profit institution subject to the supervision and administration of the supervisory and administrative department of credit investigation under the State Council.

Article 28 The Basic Financial Credit Information Database receives credit information provided by institutions engaged in credit business according to the relevant provisions. The Basic Financial Credit Information Database provides inquiry services for information subjects and information users that have obtained the written consents of information subjects. State organs may inquire about information at the Basic Financial Credit Information Database by law.

Article 29 Institutions engaged in credit business shall provide credit information to the Basic Financial Credit Information Database according to the relevant provisions. Before providing credit information to the Basic Financial Credit Information Database or other subjects, institutions engaged in credit business shall obtain the written consent of information subjects and be governed by this Regulation as information providers.

Article 30 The specific measures for financial institutions not engaged in credit business to provide credit information to or inquire about credit information from the Basic Financial Credit Information Database and for the database to accept credit information provided by such financial institutions shall be made by the supervisory and administrative department of credit investigation under the State Council together with the relevant financial supervisory and administrative department under the State Council.

Article 31 The institution operating the Basic Financial Credit Information Database may collect inquiry service charges on the cost compensation principle. The charging rates shall be determined by the price administrative department under the State Council.

Article 32 Articles 14, 16, 17, 18, 22, 23, 24, 25 and 26 of this Regulation apply to the institution operating the Basic Financial Credit Information Database.

Chapter VI Supervision and Administration

Article 33 The supervisory and administrative department of credit investigation under the State Council and the local offices thereof shall, according to laws, administrative regulations and the State Council provisions, perform supervisory and administrative duties on the credit investigation industry and the institution operating the Basic Financial Credit Information Database, and may take the following supervision and inspection measures:

1. entering credit investigation institutions and the institution operating the Basic Financial Credit Information Database to make on-site inspections, and checking whether institutions providing information to or acquiring information from the Basic Financial Credit Information Database have observed this Regulation;

2. interviewing the parties concerned or entities and individuals relating to the event under investigation and asking them to make explanations on matters relating to the event under investigation;

3. consulting and copying documents or materials relating to the event under investigation, and sealing up materials likely to be transferred, destroyed, concealed or altered; and

4. checking the relevant information systems. The number of on-site inspectors or investigators shall not be less than two, and they shall produce their lawful credentials and the inspection or investigation notice. Entities and individuals under inspection or investigation shall be cooperative and truthfully provide the relevant documents or materials, and may not withhold information or refuse or obstruct the inspection or investigation.

Article 34 Where a major information divulgence occurs to a credit investigation institution engaged in individual credit investigation, the Basic Financial Credit Information Database or an institution providing information to or acquiring information from the Basic Financial Credit Information Database, the supervisory and administrative department of credit investigation under the State Council may temporarily take over the relevant information system or take other necessary measures to prevent the increase of damage.

Article 35 The staff members of the supervisory and administrative department of credit investigation under the State Council and the local offices thereof shall keep confidential state secrets and information subjects’information which they have access to in the course of performing duties.

Chapter VII Legal Liability

Article 36 Where any entity or individual forms a credit investigation institution engaged in individual credit investigation or engages in individual credit investigation without the approval of the supervisory and administrative department of credit investigation under the State Council, the supervisory and administrative department of credit investigation under the State Council shall close it down and impose a fine of not more than 500,000 yuan but not less than 50,000 yuan. If any crime is constituted, the liable party shall assume criminal liability.

Article 37 Where any credit investigation institution engaged in individual credit investigation violates Article 9 of this Regulation, the supervisory and administrative department of credit investigation under the State Council shall order it to correct within a certain time limit, impose a fine of not more than 200,000 yuan but not less than 20,000 yuan upon the institution and, for the directly responsible person in charge and other directly liable persons, give a warning and impose a fine of not more than 10,000 yuan. Where any credit investigation institution engaged in enterprise credit investigation fails to handle filing formalities under Article 10 of this Regulation, the local office of the supervisory and administrative department of credit investigation under the State Council shall order it to correct within a certain time limit and, if it fails to correct within the prescribed time, punish it according to the preceding paragraph.

Article 38 Where any credit investigation institution or the institution operating the Basic Financial Credit Information Database, in violation of this Regulation, has any of the following conduct, the supervisory and administrative department of credit investigation under the State Council or the local office thereof shall order it to correct within a certain time limit, impose a fine of not more than 500,000 yuan but not less than 50,000 yuan upon the institution and a fine of not more than 100,000 yuan but not less than 10,000 yuan upon the directly responsible person in charge and other directly liable persons, and confiscate the illegal gains if any. If any losses are caused to information subjects, the liable party shall assume civil liability; if any crime is constituted, the liable party shall assume criminal liability:

1. stealing information or otherwise illegally acquiring information;

2. collecting individual information whose collection is prohibited or without the consent of information subjects;

3. illegally providing or selling information;

4. divulging information due to negligence;

5. failing to delete bad information of individuals upon the expiration of the prescribed retention period;

6. failing to check and handle information at which demurs have been raised as required;

7. refusing or impeding the inspection or investigation activities of the supervisory and administrative department of credit investigation under the State Council or the local office thereof, or failing to truthfully provide the relevant documents or materials; or

8. any other conduct that violates the credit investigation rules or infringes upon the legal rights and interests of information subjects. Where any credit investigation institution engaged in individual credit investigation has any of the above-mentioned conduct, and if the circumstances or consequences are serious, the supervisory and administrative department of credit investigation under the State Council shall revoke its individual credit investigation business operation permit.

Article 39 Where any credit investigation institution, in violation of this Regulation, fails to report its credit investigation business operations of the last year as required, the supervisory and administrative department of credit investigation under the State Council or the local office thereof shall order it to correct within a certain time limit; if the institution fails to correct within the prescribed time, it shall impose a fine of not more than 100,000 yuan but not less than 20,000 yuan upon the institution and, for the directly responsible person in charge and other directly liable persons, give a warning and impose a fine of not more than 10,000 yuan.

Article 40 Where any institution providing information to or acquiring information from the Basic Financial Credit Information Database, in violation of this Regulation, has any of the following conduct, the supervisory and administrative department of credit investigation under the State Council or the local office thereof shall order it to correct within a certain time limit, impose a fine of not more than 500,000 yuan but not less than 50,000 yuan upon the institution and a fine of not more than 100,000 yuan but not less than 10,000 yuan upon the directly responsible person in charge and other directly liable persons, and confiscate the illegal gains if any. If any losses are caused to information subjects, the liable party shall assume civil liability; if any crime is constituted, the liable party shall assume criminal liability:

1. illegally providing or selling information;

2. divulging information due to negligence;

3. inquiring about personal information or the credit information of enterprises without consent;

4. failing to handle demurs as required or correct information with errors or omissions; or

5. refusing or impeding the inspection or investigation activities of the supervisory and administrative department of credit investigation under the State Council or the local office thereof, or failing to truthfully provide the relevant documents or materials;

Article 41 Where any information provider, in violation of this Regulation, provides any credit investigation institution or the Basic Financial Credit Information Database with any individual’s bad information which is not information that should be disclosed according to law without notifying the individual beforehand, and if the circumstances or consequences are serious, the supervisory and administrative department of credit investigation under the State Council or the local office thereof shall impose a fine of not more than 200,000 yuan but not less than 20,000 yuan if the provider is an entity or a fine of not more than 50,000 yuan but not less than 10,000 yuan if the provider is an individual.

Article 42 Where any information user, in violation of this Regulation, uses personal information for purposes not agreed upon with the information subject or provides individual information to any third party without the consent of the information subject, and if the circumstances or consequences are serious, the supervisory and administrative department of credit investigation under the State Council or the local office thereof shall impose a fine of not more than 200,000 yuan but not less than 20,000 yuan if the user is an entity or a fine of not more than 50,000 yuan but not less than 10,000 yuan if the user is an individual; and confiscate the illegal gains if any. If any losses are caused to information subjects, the user shall assume civil liability; if any crime is constituted, the user shall assume criminal liability.

Article 43 Where any staff member of the supervisory and administrative department of credit investigation under the State Council or its local offices abuses powers, neglects duties, engages in malpractice for personal gains, fails to perform supervisory and administrative duties, or divulges state secrets or information of information subjects, sanctions shall be imposed by law. If any losses are caused to information subjects, he/she shall assume civil liability; if any crime is constituted, he/she shall assume criminal liability.

Chapter VIII Supplementary Provisions

Article 44 The meaning of terms mentioned in this Regulation is as follows:

1. Information providers refer to entities and individuals providing information to credit investigation institutions and entities providing information to the Basic Financial Credit Information Database.

2. Information users refer to entities and individuals acquiring information from credit investigation institutions and the Basic Financial Credit Information Database.

3. Bad information refers to information which exerts adverse impact on the credit standing of information subjects, such as: information about information subjects’failure to perform contracts in loaning, credit purchasing, guarantee, lease, insurance and credit card use activities; information about administrative punishments on information subjects; information about the judgments or rulings of people’s courts deciding that information subjects shall perform obligations or be subject to enforcement measures; and other bad information as specified by the supervisory and administrative department of credit investigation under the State Council.

Article 45 The conditions for the formation of foreign-funded credit investigation institutions shall be made by the supervisory and administrative department of credit investigation under the State Council together with other relevant departments under the State Council, and be subject to the approval of the State Council. Overseas credit investigation institutions shall obtain the approval of the supervisory and administrative department of credit investigation under the State Council before engaging in credit investigation inside China.

Article 46 Institutions which have already been engaged in individual credit investigation before the implementation of this Regulation shall apply for individual credit investigation business operation permits according to this Regulation within six months as of the date of implementation of this Regulation. Institutions which have already been engaged in enterprise credit investigation before the implementation of this Regulation shall handle filing formalities according to this Regulation within three months as of the date of implementation of this Regulation.

Article 47 This Regulation shall come into force on March 15, 2013.

Regulatory Legislation | “Regulations on Promoting and Standardizing Cross-Border Data Flows”

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State Internet Information Office Order

No. 16

The “Regulations on Promoting and Standardizing Cross-Border Data Flows” have been reviewed and approved at the 26th office meeting of the State Internet Information Office on November 28, 2023. They are hereby announced and shall be implemented from the date of announcement.

Director of the State Internet Information Office

Zhuang Rongwen

March 22, 2024

Provisions on Promoting and Standardizing Cross-Border Data Flows

Article 1: In order to safeguard data security, protect the rights and interests of personal information, and promote the lawful and orderly free flow of data, these provisions are formulated in accordance with the laws and regulations of the People’s Republic of China, including the Cybersecurity Law of the People’s Republic of China, the Data Security Law of the People’s Republic of China, and the Personal Information Protection Law of the People’s Republic of China, concerning the implementation of the data export system, such as data export security assessments, standard contracts for the export of personal information, and personal information protection certification.

Article 2: Data processors shall identify and declare important data in accordance with relevant regulations. If data has not been identified or publicly announced as important data by relevant departments or regions, data processors are not required to undergo a data export security assessment for data that is not declared as important data.

Article 3: Data collected and generated in activities such as international trade, cross-border transportation, academic cooperation, cross-border production and manufacturing, and marketing, provided to overseas without involving personal information or important data, shall be exempted from the requirement to undergo a data export security assessment, enter into standard contracts for the export of personal information, or obtain personal information protection certification.

Article 4: When personal information collected and generated by data processors overseas is transferred to China for processing and subsequently provided to overseas without introducing personal information or important data during the processing, they shall be exempted from the requirement to undergo a data export security assessment, enter into standard contracts for the export of personal information, or obtain personal information protection certification.

Article 5: Data processors providing personal information overseas shall be exempted from the requirement to undergo a data export security assessment, enter into standard contracts for the export of personal information, or obtain personal information protection certification if they meet one of the following conditions:

(1) It is necessary to provide personal information overseas for the conclusion or performance of contracts in which individuals are parties, such as cross-border shopping, cross-border mailing, cross-border remittance, cross-border payment, cross-border account opening, airline and hotel reservations, visa application, examination services, etc.;

(2) It is necessary to provide employee personal information overseas for the implementation of cross-border human resources management in accordance with legally formulated labor regulations and collective contracts signed in accordance with the law;

(3) It is necessary to provide personal information overseas to protect the life, health, and property safety of natural persons in emergency situations;

(4) Data processors other than operators of critical information infrastructure have provided less than 100,000 pieces of personal information (excluding sensitive personal information) overseas cumulatively since January 1 of the current year.

The personal information provided overseas as referred to in the preceding paragraph does not include important data.

Article 6: Free Trade Pilot Zones may independently formulate a negative list of data that needs to be included in the scope of data export security assessments, standard contracts for the export of personal information, and personal information protection certification management within the framework of the national data classification and grading protection system. After approval by the provincial-level cybersecurity and informatization committee, it shall be filed with the competent authority of the State Cyberspace Administration and the competent authority of the National Data Management Department.

Data processors providing data overseas within the Free Trade Pilot Zones that is not included in the negative list may be exempted from the requirement to undergo a data export security assessment, enter into standard contracts for the export of personal information, or obtain personal information protection certification.

Article 7: Data processors providing data overseas shall apply for a data export security assessment through the provincial-level cyberspace administration department to the competent authority of the State Cyberspace Administration if they meet one of the following conditions:

(1) Operators of critical information infrastructure provide personal information or important data overseas;

(2) Data processors other than operators of critical information infrastructure provide important data overseas or have provided personal information (excluding sensitive personal information) to overseas exceeding one million people, or sensitive personal information exceeding ten thousand people cumulatively since January 1 of the current year.

The provisions of Articles 3, 4, 5, and 6 of these regulations shall apply to the above situations.

Article 8: Data processors other than operators of critical information infrastructure that have provided personal information (excluding sensitive personal information) to overseas exceeding one hundred thousand people but less than one million people, or sensitive personal information to less than ten thousand people cumulatively since January 1 of the current year, shall conclude standard contracts for the export of personal information with the overseas recipient or obtain personal information protection certification in accordance with the law.

The provisions of Articles 3, 4, 5, and 6 of these regulations shall apply to the above situations.

Article 9: The validity period of the results of the data export security assessment shall be three years from the date of issuance of the assessment results. When the validity period expires and it is necessary to continue data export activities without the occurrence of circumstances requiring a reapplication for a data export security assessment, data processors may apply to extend the validity period of the assessment results to the competent authority of the State Cyberspace Administration through the provincial-level cyberspace administration department 60 working days before the expiration of the validity period. With the approval of the competent authority of the State Cyberspace Administration, the validity period of the assessment results may be extended for three years.

Article 10: Data processors providing personal information overseas shall fulfill obligations such as notification, obtaining individual consent, and conducting personal information protection impact assessments in accordance with laws and regulations.

Article 11: Data processors providing data overseas shall comply with laws and regulations, fulfill obligations of data security protection, adopt technical measures and other necessary measures to ensure data export security. In the event of or potential for a data security incident, remedial measures shall be taken, and timely reports shall be made to the provincial-level and above cyberspace administration departments and other relevant competent authorities.

Article 12: Local cyberspace administration departments shall strengthen guidance and supervision over data processors’ data export activities, improve the data export security assessment system, and optimize the assessment process. They shall strengthen end-to-end and all-domain supervision before, during, and after data export activities. In case of significant risks in data export activities or occurrence of data security incidents, data processors shall be required to rectify and eliminate hidden dangers. Those who refuse to correct or cause serious consequences shall be held accountable according to law.

Article 13: If there is any inconsistency between these regulations and the “Measures for the Security Assessment of Data Export” (Order No. 11 of the State Cyberspace Administration, announced on July 7, 2022), and the “Methods for Standard Contracts for the Export of Personal Information” (Order No. 13 of the State Cyberspace Administration, announced on February 22, 2023), and other relevant regulations promulgated on July 7, 2022, and February 22, 2023, these regulations shall prevail.

Article 14: These regulations shall come into force on the date of promulgation.

National Bureau of Statistics Unveiled: Advancing the Construction of Digital China, with a Long and Arduous Road Ahead

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Xinhua News Agency, Beijing, October 26th – The Economic Reference Newspaper published an article on October 26th titled “National Bureau of Statistics Unveiled: Advancing the Construction of Digital China”.

According to the article, on the morning of October 25th, the National Bureau of Statistics was officially unveiled. According to the “Plan for the Reform of Party and State Institutions”, the National Bureau of Statistics is responsible for coordinating and promoting the construction of the data basic system, overall planning for the integration, sharing, and development of data resources, and coordinating the planning and construction of digital China, digital economy, and digital society.

Industry experts stated that the establishment of the National Bureau of Statistics will promote the comprehensive implementation of the overall layout of digital China construction, enhance the systematic and coordinated allocation of data elements in the market, fully leverage China’s massive data scale and rich application scenarios, and strengthen, optimize, and expand the digital economy.

On October 25th, citizens passed by the newly unveiled National Bureau of Statistics. Photo by Xinhua News Agency reporter Luo Xiaoguang.

Currently, China is accelerating the construction of its data basic system. At the end of last year, the “Opinions of the CPC Central Committee and the State Council on Better Utilizing Data Elements by Constructing Data Basic System” was issued, focusing on data property rights, circulation transactions, income distribution, and security governance, and systematically laid out the “four beams and eight pillars” of the data basic system. In February of this year, the “Overall Layout Plan for Digital China Construction” was released, emphasizing the smooth flow of data resources.

At the same time, various parties are accelerating their layout in the field of data elements, exploring deep implementation plans from multiple levels and perspectives such as institutional mechanisms, market circulation, product research and development, and standard specifications. For example, recently, policies have been successively issued in Beijing, Shanghai, Guizhou, Hubei, and other places, clarifying the goal of building data element markets with a scale of hundreds of billions in the coming years, and promoting orderly circulation of social data and accelerating the development and utilization of data resources.

With various parties accelerating the exploration of new models of data circulation and innovative application scenarios, the value of data elements continues to be released. According to the “Digital China Development Report (2022)” released in April this year, China’s big data industry reached 1.57 trillion yuan in 2022, an increase of 18% year-on-year. In addition, data from the China Academy of Information and Communications Technology shows that China’s data transaction scale exceeded 70 billion yuan in 2022, and the overall market size is expected to exceed 220 billion yuan by 2025.

Industry insiders believe that overall, China’s data element market development is still in its early stages, and there is still room for further exploration and refinement.

Experts from the China Academy of Information and Communications Technology also stated that China has the advantage of massive data resources, laying an important foundation for data to become a production factor. In the future, through a combination of institutional design, technological application, and industry cultivation, these advantages will be transformed into capabilities to unleash the value of data elements.

Industry Exchange | Researcher An Guangyong Invited by the National Information Center for Special Exchange on South Korea’s MyData and Data Economy

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On the afternoon of September 28, 2023, at the invitation of the National Information Center, Researcher An Guangyong, an expert from the Credit Management Professional Committee of the All-China Mergers and Acquisitions Association, visited the Public Technical Service Department of the National Information Center to share and exchange views on the development trends of data economy, particularly South Korea’s MyData.

Researcher An Guangyong shared the latest trends and development directions of MyData worldwide through comprehensive horizontal and vertical comparisons. He analyzed the achievements of South Korea’s MyData on a global scale from various perspectives such as geographical location, culture, and history. He then introduced specific successful cases of South Korea’s MyData, spanning various sectors including finance, healthcare, and education. These practical cases provided tangible references for the digital economy, demonstrating the achievements and benefits of MyData in practical applications in South Korea.

Attendees showed strong interest in the architecture, regulatory mechanisms, and related licenses of MyData. They discussed how the government can ensure the security and compliance of MyData, as well as how related industries can obtain necessary permits and certifications.

Both parties plan to continue exchanging and cooperating in the next step, researching how MyData can be implemented in China and its macroeconomic effects, such as its contribution to GDP growth and employment rates.

As a Korean returnee expert in credit and data, An Guangyong and his team have been closely tracking and researching the trends of the South Korean MyData industry since 2019. They have also shown concern for the digital economy and AI development in South Korea, conducting multiple research trips to South Korea in 2023 to investigate MyData regulations and the industry.

An Guangyong’s team regularly updates the latest MyData developments in the electronic journals “Data Economy Review” and “Global Credit Technology Dynamics,” and publishes related research reports. They have also published several MyData-themed articles in “Credit” and “Tsinghua Financial Review.” Some references to their research include:

Expert Opinion | Innovation Direction of Personal Credit Industry—South Korea’s MyData Industry and Credit Applications, “Credit,” 2023.

New Business Model of Personal Financial Data—Taking South Korea’s MyData as an Example, Tsinghua Financial Review, 2023(04).

Challenges and Responses to Personal Information Protection under the Digital Economy—New Approaches Based on Personal Data Management, Tsinghua Financial Review, 2021, Issue 3.

Summary of MyData Seminar | Exploring New Directions for China’s Personal Data Industry.

Personal Data Industry | Current Situation of Public MyData in South Korea.

Researcher An Guangyong’s team plans to collaborate with a well-known domestic publishing house to release a monograph on the South Korean MyData model at the end of this year or the beginning of next year. The monograph will elaborate on the development of the industry and its implications for the global data industry and the construction of China’s data element market. Please stay tuned for updates.

The People’s Bank of China has revised and released the “Credit Reporting Complaint Handling Procedures”.

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In recent years, China’s credit reporting market has developed rapidly, with the continuous expansion of credit reporting business entities and an increasing diversity of credit reporting service applications. The protection of credit rights faces new situations and tasks. In order to better protect the legitimate rights and interests of information subjects and promote the high-quality development of China’s credit reporting industry, the People’s Bank of China recently revised and released the “Credit Reporting Complaint Handling Procedures” (referred to as the “Procedures”).

The “Procedures” are based on the actual development of China’s credit reporting market, adhering to the basic principles of legality and compliance, convenience and benefit to the people, precise relief, and efficient performance. They comprehensively revised and improved the credit reporting complaint handling system from aspects such as smoothing complaint channels, clarifying complaint jurisdiction, simplifying complaint requirements, optimizing handling processes, and standardizing handling documents.

The main revisions include:

（i）Simplifying complaint requirements, optimizing handling processes, and improving handling standardization. It requires branches of the People’s Bank of China to uniformly publish complaint channels on their official websites, simplify identity verification requirements for complainants, add processes such as material review, complaint suspension, and consolidation, and standardize formats for relevant documents such as complaint applications, complaint replies, and termination notices.

（ii）Unifying the authority and jurisdiction of credit reporting complaints. It clarifies that credit reporting complaints are under the jurisdiction of the branches of the People’s Bank of China where the respondent is located, achieving the unity of the subject of credit reporting complaint acceptance and credit reporting supervision, with equal rights and responsibilities.

（iii）Strengthening system design to guide complainants to safeguard their rights correctly. It specifies complaint acceptance standards, requiring complaints that meet the acceptance conditions to be accepted, and strengthening the obligation to inform complaints that do not meet the acceptance conditions. It clarifies the scope of credit reporting complaint acceptance and improves the precision of credit reporting relief. It adds termination clauses for situations such as providing false materials or filing complaints under false identities, guiding complainants to safeguard their rights in accordance with the law and regulations.

The release of the “Procedures” is conducive to improving the convenience of credit reporting complaints, reducing the cost of complaints, facilitating the people to protect their legitimate credit rights and interests, and enhancing the quality and efficiency of credit reporting complaint handling. In the next step, the People’s Bank of China will continue to deeply implement the development ideology centered on the people, practice the concept of credit for the people, continue to do a good job in protecting the credit rights and interests of information subjects, and promote the high-quality development of China’s credit reporting industry.

Enterprise Financing Credit Platform | Deputy Director of the National Development and Reform Commission, Li Chunlin: Providing More Accurate Financing Services to Specialized Industries

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During the State Council’s regular policy briefing held by the State Council Information Office on April 10th, Li Chunlin, Deputy Director of the National Development and Reform Commission, introduced the long-standing issues faced by small and medium-sized enterprises (SMEs) and private enterprises, such as difficulties and high costs in financing.

Li Chunlin stated that many of these enterprises are in their early stages or growth phases, often lacking effective collateral and guarantees, making it difficult to meet the loan requirements of traditional credit models, as they lack tangible assets as loan collateral. Financial institutions providing credit financing services need to assess the credit levels of enterprises based on their credit information. However, this credit information is often dispersed and difficult to obtain, limiting financial institutions’ ability to grant credit loans based on information. Banks, especially when providing loans to SMEs, startups, and even student entrepreneurs, lack comprehensive understanding of their overall credit and asset situations. With individual pieces of information scattered across different departments, this is a significant bottleneck and a major pain point.

To address this pain point, the National Development and Reform Commission has established a national financing credit service platform to help SMEs exchange credit for loans by strengthening the application of credit information sharing. The platform mainly has four major functions:

I. Credit Information Inquiry

The platform has already collected over 78 billion pieces of credit information and provides information inquiry services to financial institutions based on the principle of public welfare, alleviating the problem of information asymmetry between banks and enterprises. As of now, the platform has provided inquiry services to relevant financial institutions over 276 million times, with an average weekly visit volume exceeding one million people. It has collected credit information on 17 major categories and 37 items of operating entities.

II. Financing Demand Matching

Intelligently matching the financing needs of operating entities with the financial products provided by banking institutions to achieve nationwide financing supply-demand matching services. The “Financial Supermarket” section has launched 22 financing service products for operating entities to choose from independently.

III. Direct Access to Enterprise-Friendly Policies

Concentrating on displaying various enterprise-friendly financial support policies, the first batch of 35 local enterprise-friendly policies can be applied for online. Enterprise-friendly financial policies scattered across various government departments can be queried on this platform, allowing operating entities to find suitable or eligible policies for application.

IV. Financing Credit Enhancement Services

Introducing financing guarantee institutions and risk-sharing funds, the first batch of 20 local credit enhancement and risk mitigation services can be processed on the platform in a “one-stop” manner.

Li Chunlin explained that currently, relying on the national integrated financing credit service platform network, a new inclusive financial model based on credit information has been cultivated, and a comprehensive financing service system covering the entire process has been established, providing SMEs, especially private enterprises, with convenient financing channels.

Corporate Financing Credit Platform | Director of the Central Bank’s Credit Bureau, Ren Yongmei: Supporting credit institutions in utilizing big data and artificial intelligence for product innovation

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The State Council Information Office held a regular policy briefing on April 10, 2024 (Wednesday) at 3:00 PM, where Li Chunlin, the Deputy Director of the National Development and Reform Commission, Ren Yongmei, Director of the Credit Bureau of the People’s Bank of China, and Feng Yan, the head of the Inclusive Finance Department of the Financial Regulatory Authority, introduced the ‘Implementation Plan for Coordinating the Construction of Financing Credit Service Platforms to Improve the Financing Convenience Level of Small and Micro Enterprises’ and answered questions from reporters. Below is the transcript of the Q&A session with Ren Yongmei, Director of the Credit Bureau of the People’s Bank of China:

Reporter from Poster News: In recent years, market-oriented credit institutions in our country have developed rapidly and have played an important role in enhancing the efficiency of credit financing matching. Could you please share the People’s Bank of China’s considerations on cultivating and managing the credit market? Thank you.

Thank you for the question, let me answer it. First, I appreciate your concern and support for the credit market. The construction of our country’s credit system has always adhered to a dual-drive approach of ‘government + market,’ and market-oriented credit institutions are an important part of China’s credit system. In recent years, the People’s Bank of China has vigorously developed a multi-level credit market, covering a wide range of social credit needs. First, we have actively and prudently developed the personal credit market. According to market demands and in conjunction with personal information protection requirements, the People’s Bank has approved two personal credit institutions. In 2023, these institutions provided various credit services such as credit reports, credit scores, and anti-fraud scores, totaling 42 billion times. Second, we nurture and develop the corporate credit market. We guide institutions with data, technology, and markets to enter the corporate credit market, integrating various types of credit information related to enterprises’ registration, business operations, and contract fulfillment. In 2023, 149 corporate credit institutions provided various credit services 22.3 billion times. Third, we have actively promoted the market-oriented transformation of local credit platforms, achieving significant results. Out of 31 provincial local credit platforms, 26 are operated by specially established market-oriented institutions. These institutions comprehensively collect local enterprises’ public credit information and other commercial credit data, achieving deep integration and application of various types of information to provide specialized credit services to financial institutions.

Next, the People’s Bank will follow the Central Committee’s decisions on building a comprehensive social credit system, fully implement the deployment requirements of the ‘Implementation Plan,’ and continue to nurture and manage the credit market. First, further optimize the layout of the credit market. Seize the development opportunities of new productive forces, deepen credit supply-side reforms, support credit institutions in using new technologies like big data and artificial intelligence for product innovation, and provide diversified and differentiated credit information services for inclusive financial development. Second, further promote the sharing and application of various types of credit information. In conjunction with the Development and Reform Commission, we will promote the legal and compliant opening of data to credit institutions by the credit information platform, fully leveraging the multiplier effect of data. Third, continuously strengthen credit supervision. Firmly implement strict supervision requirements, bring all credit activities under lawful regulation, and comprehensively protect the legal rights and information security of information subjects. Thank you.

China News Agency reporter: The “Implementation Plan” proposes that the Financial Credit Information Basic Database should adhere to the positioning of financial infrastructure and provide high-quality specialized credit services for financial institutions. I would like to inquire about the effectiveness of the National Financial Credit Information Basic Database in supporting financing for small and medium-sized enterprises (SMEs). What are the considerations for the next steps? Thank you.

Thank you for the question. I’ll address it. The People’s Bank of China (PBOC) resolutely implements the decisions and arrangements of the Central Committee of the Communist Party of China and the State Council, continuously improves the policy system of financial services for the real economy, and vigorously promotes the construction of the credit system, which has played a positive role in alleviating the difficulties and high costs of financing for small and medium-sized enterprises (SMEs). The PBOC began building the financial credit system in the 1990s. After nearly thirty years of development, the National Financial Credit Information Basic Database has grown from nothing to the largest credit system in the world in terms of coverage and the most comprehensive in terms of credit information. Querying the database for credit reports has become a necessary step in the credit review process of financial institutions, playing a leading role in financial services for the real economy.

Here are some numbers for reference: As of the end of March 2024, the database has been accessed by 6,124 legal entities engaged in credit business, including commercial banks, consumer finance companies, and microloan companies. It has recorded information related to 1.16 billion individuals, 130 million households, and other organizations. In 2023, the database provided query services 5.3 billion times, a significant number indicating the substantial support for financing obtained by many SMEs with good credit history. In the World Bank’s Doing Business assessment, China’s credit information index, with the database as a reference, has ranked among the top globally for several consecutive years.

Furthermore, the PBOC actively promotes the construction of the unified registration and public announcement system for movable property financing and the accounts receivable financing service platform, which has facilitated the financing development of SMEs. As of the end of March 2024, the unified registration and public announcement system for movable property financing has handled 34.455 million registrations and provided 210 million queries. The accounts receivable financing service platform has facilitated 512,000 financings. It is fair to say that significant progress has been made in supporting movable property financing and supply chain finance.

In the next steps, the PBOC will thoroughly implement the spirit of the Central Economic Work Conference and the Central Financial Work Conference, practice the concept of “credit for the people,” continuously improve the database’s functions and services, and provide information support for the five major tasks. First, it will lawfully and comprehensively collect financial credit information, deepen the development and application of credit information, further improve service quality and efficiency, and support financial institutions in establishing a sound and effective mechanism for lending. Second, it will research and promote the shared application of payment fund flow information for SMEs, form a complementary service pattern with credit information, and further enhance the financing convenience for SMEs without credit records. Third, it will further expand the registration scope of the unified registration and public announcement system for movable property financing, and promote the application of the accounts receivable financing service platform, helping SMEs obtain financing using movable property. Thank you!

Notice of the General Office of the State Council on Issuing the ‘Implementation Plan for Coordinating the Construction of Financing Credit Service Platforms to Improve the Financing Convenience Level of Small and Micro Enterprises

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Notice from the General Office of the State Council on Issuing the ‘Implementation Plan for Coordinating the Construction of Financing Credit Service Platforms to Improve the Financing Convenience Level of Small and Micro Enterprises’

State Council Office Issue [2024] No. 15

To the People’s Governments of all provinces, autonomous regions, and municipalities directly under the Central Government, and to all ministries and commissions of the State Council, and to all directly subordinate institutions:

The ‘Implementation Plan for Coordinating the Construction of Financing Credit Service Platforms to Improve the Financing Convenience Level of Small and Micro Enterprises’ has been approved by the State Council and is now issued to you for serious implementation.

General Office of the State Council

March 28, 2024

(This document has been abridged)

Coordinated Construction of Financing Credit Service Platforms

Implementation Plan to Enhance Financing Convenience for Small and Micro Enterprises

The financing credit service platform is a comprehensive platform established under the guidance of government departments. It aggregates credit information across sectors and fields to provide credit information services for financial institutions’ enterprise financing activities. It plays a crucial role in solving the problem of information asymmetry between banks and enterprises and in reducing the financing costs for businesses. To implement the decisions and deployments of the Central Committee of the Communist Party and the State Council, better coordinate the construction of financing credit service platforms, improve the inclusive financing service system based on credit information, and effectively enhance the financing convenience level for small and micro enterprises, this implementation plan has been formulated.

I. Overall Requirements

Guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the Party’s 20th National Congress, thoroughly, accurately, and comprehensively apply the new development concepts, accelerate the construction of a new development pattern, strive to promote high-quality development, improve the data foundation system, increase the coordination efforts in building financing credit service platforms, perfect the mechanism for the aggregation and sharing of credit information, advance the ‘Credit Easy Loan’ initiative, deepen the application of credit big data, ensure information security and the legitimate rights and interests of business entities, prompt financial institutions to change their business philosophies, optimize financial services, and control financial risks, providing high-quality financial services especially for small and micro enterprises.

II. Increase Coordination Efforts for Platform Construction

(i) Clarify the channels for the aggregation and sharing of credit information. Strengthen the ‘main hub’ function of the national credit information sharing platform (hereinafter referred to as the credit information platform) for the aggregation and sharing of credit information, and enhance the data sharing of the national financial credit information base database. The credit information platform unifies the collection of various types of credit information and shares it with departments and localities as needed. Relying on the credit information platform, construct a national financing credit service platform and connect it with local financing credit service platforms to form a nationwide integrated platform network. This serves as the ‘sole outlet’ for providing public credit information services to financial institutions, although the provision of credit information services in specific fields by departments to financial institutions is not restricted by this. Adhere to the financial infrastructure positioning of the national financial credit information base database, providing high-quality professional credit services to financial institutions.

(ii) Strengthen the integration and unified management of local platforms. Integrate local financing credit service platforms that are redundant or inefficient, keeping only one provincial platform per province in principle, and no more than one platform at the city or county level. All local platforms should be unified into the national integrated platform network, managed through a list-based approach to reduce redundant construction and waste of resources. The National Development and Reform Commission is responsible for coordinating the construction of financing credit service platforms and promoting the integration and unified management of local platforms. All regions should complete the platform integration by the end of December 2024, orderly managing asset transfer, data handover, and personnel placement, ensuring that platform services are not affected during the integration period.

(iii) Enhance guidance for the construction of local platforms. Standardize the criteria for local financing credit service platforms to access the national integrated platform network, optimize credit information services, and promote the standard and healthy development of local platforms. Relying on urban credit monitoring and the creation of social credit system demonstration zones, strengthen guidance on improving platform data quality. Fully utilize the existing counterpart support mechanisms to further deepen cooperation in constructing financing credit service platforms between the eastern and the central and western regions, and accelerate the ‘Credit Easy Loan’ initiative in the central and western regions.

III. Optimize the credit information collection and sharing mechanism

(iv) Clarify the scope of credit information collection and sharing. Based on the actual needs of financial institutions for credit information, further expand the scope of credit information collection and sharing to include key personnel information of enterprises, various qualification information, import and export information, etc., into the credit information collection and sharing list (see attachment). The National Development and Reform Commission will lead the timely update of this list. All regions should fully utilize the role of local financing credit service platforms to break down data barriers, legally and regulatively increase the collection and sharing of credit information outside the list, compile provincial credit information collection and sharing lists in line with local realities, and effectively expand the breadth and depth of data collection and sharing.

(v) Improve the quality and efficiency of credit information sharing. Increase ‘total-to-total’ sharing efforts for credit information already managed centrally by national departments. Strengthen collaborative governance of data quality, standardize data collection standards, timely conduct credit information repair, and improve information update and maintenance mechanisms to ensure data is true, accurate, and complete. Address issues such as insufficient data sharing frequency, inadequate interface capacity, and insufficient sharing of certain public utility information to further enhance the efficiency of credit information sharing. According to the needs of data providing units, regularly feedback on data usage and effectiveness. The National Development and Reform Commission should lead the assessment of credit information sharing quality and efficiency among regions and relevant departments.

IV. Deepening the Utilization of Credit Data

(vi) Improve information query services. Financing credit service platforms at all levels should provide services such as information push, information queries, and credit report queries to financial institutions according to the principles of public welfare, in accordance with laws and regulations. They should expand the scope of credit information queries, refine the credit report query system, and enhance the quality of credit reports. Support banking institutions in perfecting credit management systems and increasing the use of credit reports in customer screening, pre-loan investigations, in-loan approvals, and post-loan management, thereby providing high-quality financial services to small and micro enterprises.

(vii) Conduct joint modeling applications. Support financing credit service platforms and financial institutions in establishing joint laboratories for credit information collection and processing. Enhance sensitive data development and application through measures such as ‘keeping data within domain’, and improve the level of financial credit joint modeling. Encourage financial institutions to actively connect with financing credit service platforms and fully utilize credit information to optimize credit product development, credit evaluation, and risk management.

(viii) Develop credit financing products. Fully leverage the credit information aggregation advantages of key enterprises, centralized trading places, and distinctive industrial clusters. Conduct “Credit Easy Loan” special product pilots adaptively. Enhance the application of comprehensive public credit evaluation results, encourage local financing credit service platforms to develop strategic new industries, future industries, green and low-carbon development, key industrial and supply chains, agriculture-related modules, and support financial institutions in utilizing specialized credit information to launch market-oriented financial products and services in niche areas. Accelerate the construction of the rural credit system, support financial institutions in developing exclusive financial products and services for farmers and new types of agricultural operators, and moderately increase the proportion of credit loans.

(ix) Expand and enhance platform service functions. Encourage localities to establish and improve a “policy-to-person” mechanism, fully leverage the advantages of local financing credit service platforms in connecting enterprises and financial institutions, and promote the direct delivery of various financial convenience and enterprise-benefiting policies to small and micro enterprises and other business entities through the platform. Promote financing guarantee institutions to join the financing credit service platforms, establish a multi-party cooperation mechanism involving banks, governments, and financing guarantee institutions based on the platform, and simplify related financing guarantee procedures rationally. Encourage capable localities to establish mechanisms such as “online notarization,” “online arbitration,” and financial internet courts based on financing credit service platforms, for efficient resolution of financial disputes.

(x) Develop the credit service market. Establish operating conditions and standards for the credit information platform. Under the premise of ensuring information security, legally and regulatively open data to various credit service institutions, including credit reporting agencies, steadily foster the credit service market, and enhance the efficiency of matching supply and demand in credit financing.

V. Safeguard Measures

(xi) Strengthen information security and protect the rights and interests of information subjects. Enhance the management of information security on financing credit service platforms, improve management norms and standards for platform integration, institution entry, information collection, information sharing, and data security, and effectively ensure the security of physically collected information. Financing credit service platforms at all levels should strengthen the management of information authorization, enhance the security of data sharing, use, transmission, and storage, improve the monitoring and early warning of security risks, and effectively safeguard data security. Without anonymization or explicit authorization from the information subjects, financing credit service platforms at all levels must not provide information involving trade secrets or personal privacy, nor may they illegally spread, leak, or sell relevant credit information.

(xii) Strengthen policy support and safeguards. Local people’s governments should provide appropriate support for the construction of local financing credit service platforms at their level, guide local platforms and financing guarantee institutions to strengthen cooperation, and enhance the level of financing convenience for small and micro enterprises. Encourage localities to develop incentive policies that support credit financing, and provide appropriate incentives to financial institutions that help small and micro enterprises achieve financing through financing credit service platforms.

The third personal credit rating license may accelerate implementation; what impact will this have on the industry?

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The third personal credit license may be issued soon!

Pan Gongsheng, the governor of the People’s Bank of China, recently announced at a press conference held by the State Council Information Office that the People’s Bank is guiding Qiantang Credit in its application for a personal credit license in conjunction with the Zhejiang Provincial Government.

Compared to Baihang Credit and Pudao Credit, which are already operational, Qiantang Credit has faced a much more difficult journey in applying for the personal credit license. As early as November 26, 2021, the People’s Bank had announced that it had accepted Qiantang Credit’s application for personal credit services. More than two years have passed, and the People’s Bank has still not issued a decision.

The challenging path for Qiantang Credit’s license application may be influenced by the ‘direct connection interruption’ and major shareholder restructuring. From the perspective of equity structure, both Zhejiang Tourism Investment Group Co., Ltd. (referred to as ‘Zhejiang Tourism Group’) and Ant Technology Group Co., Ltd. (referred to as ‘Ant Group’) hold 35% stakes, making them the largest shareholders.

As the restructuring of Ant Group is essentially complete and policy signals are clear, the issuance of Qiantang Credit’s personal credit license may accelerate. Several industry experts have stated that the issuance of Qiantang Credit’s personal credit license is of positive significance to the industry and will help align personal credit infrastructure with the development of the digital economy.

Qiantang Credit’s Challenging Path to Licensing

Ant Group’s application for a personal credit license began with the implementation of the ‘Interim Measures for the Supervision and Administration of Financial Holding Companies’ that landed in September 2020. These measures brought Ant Group under regulatory scrutiny, resulting in three regulatory interviews within six months. The regulatory rectification plan required Ant Group to bring all its financial activities under financial supervision, apply legally for the establishment of a financial holding company if eligible, sever improper connections between payment tools and other financial products, and prudently carry out internet lending and insurance business with licensed personal credit services.

On November 26, 2021, the People’s Bank of China publicized that it had accepted the personal credit business application from Qiantang Credit Limited (in preparation), referred to as “Qiantang Credit.” According to disclosures, Qiantang Credit has a registered capital of 1 billion yuan, with both Zhejiang Tourism Group and Ant Group holding 35% stakes each, making them the largest shareholders. Transfar Group holds 7%, Hangzhou Financial Investment Group holds 6.5%, Zhejiang E-port holds 6.5%, and Hangzhou Xishu Enterprise Management Partnership (LP) holds 10%.

The proposed list of directors, supervisors, and senior managers includes Chen Long, Dong Zhanbin, Yu Quan, and Chen Xinchun as shareholder directors; independent directors include Guo Tianyong, Hu Shaoxian, and Zhang Jingzhong; supervisors include Zhou Shengxue, Zhao Lei, and Cheng Zhijuan; senior management includes President Dong Zhanbin and CFO Kong Lingren.

Reporters learned that while Baihang Credit and Pudao Credit took about one to two months from application acceptance to approval, Qiantang Credit has been waiting for more than two years since its application was accepted, and the People’s Bank has yet to issue a decision. The path to licensing appears to be fraught with challenges. Pan Wenyuan, director of the Credit Research Center at the Shanghai Huaxia Economic Development Research Institute, told reporters that the difficulties in Qiantang Credit’s licensing mainly stem from the central bank’s cautious approach. Personal credit licenses involve multiple factors such as personal privacy protection, data compliance, and regulatory needs, requiring time for a comprehensive assessment.

Liu Xinhai, the executive deputy director of the Credit Management Committee of the All-China Mergers and Acquisitions Association and vice president of the Beijing Credit Society, analyzed several reasons for Qiantang Credit’s challenging path: one is the impact of Ant Group’s restructuring in recent years; another is the unique formation of Qiantang Credit, which differs from traditional global credit institutions, adding complexity. With the current strict global regulation of personal data, regulatory approvals are particularly cautious.

Wang Pengbo, a senior analyst at Broad Consulting, told reporters, “It might be due to not meeting the central bank’s acceptance criteria. The central bank might also be concerned about the actual control a single institution has over its personal credit business, questioning whether it can maintain the independence that a third-party credit agency should possess. If the data is biased, it could lead to assessment discrepancies. Of course, the decision might also be based on macroprudential principles.”

Impact of the License on the Industry

However, as Ant Group’s restructuring is essentially complete and the policy signals for the development of the credit market are clear, Qiantang Credit is experiencing new developments. Pan Gongsheng, the governor of the People’s Bank of China, recently announced at a State Council Information Office press conference that the People’s Bank, in conjunction with the Zhejiang Provincial Government, is guiding Qiantang Credit in its application for a personal credit license.

Pan Wenyuan believes that the central bank is further promoting the development of the credit market and sending positive signals, especially since Qiantang Credit has a higher private capital ratio compared to the first two institutions. Introducing market-oriented personal credit institutions under the premise of controllable risks can foster healthy competition in the industry and boost market confidence.

Pan Wenyuan states that Qiantang Credit’s role is primarily based on Ant Group’s actual application scenarios. Unlike Baihang Credit and Pudao Credit, which mainly serve the public market, Qiantang Credit has a multidimensional data advantage. The establishment of Qiantang Credit can enrich the data sources of the existing personal credit industry from a data collection perspective; from the perspective of serving the financial industry’s data needs, personal credit companies will become important participants in the financial industry’s data service providers, leveraging data resources and licensing advantages to increase market share.

Wang Pengbo points out that the personal credit industry requires participation from institutions representing various types to meet market demands. Credit is the foundation and underlying business of finance, supporting lending. Under the requirements of mandatory licensing and the disconnection of direct financial information, the value of personal credit licenses will gradually increase. As the financial industry develops progressively, the application scenarios for credit will become richer and more diverse.

Liu Xinhai states that China has the world’s largest consumer market and plans to further develop its consumer economy in the future. Efficient and diversified personal credit services are important digital economic infrastructures. There needs to be a central bank credit system as public infrastructure, state-backed credit institutions to ensure data security, and personal credit institutions based on large technology platforms to compete and promote each other, making the entire personal credit market more dynamic.

Liu Xinhai points out that the future establishment of Qiantang Credit’s personal credit license will have a positive impact on the industry: on one hand, it will help to align personal credit infrastructure with the development of the digital economy; on the other hand, being based on a large technology platform, market-driven incentives and specialized operations can bring technological and business model innovations to the field of personal credit.

Professional Committee of Credit Management

China Mergers & Acquisition Association

Daily Archives: April 19, 2024

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The third personal credit rating license may accelerate implementation; what impact will this have on the industry?