Source: Global Times    Published: 2019-4-22

China's credit reporting system has not yet included information on utility payments, which was heatedly discussed online in recent days, as more effort is needed to address problems like data accuracy, an official said Monday.

Such information that could reflect people's economic activities and reveal their daily lives will be gradually included in individual credit reports after obtaining personal consent, as it will help improve the building of China's credit reporting system in a comprehensive way, experts told the Global Times.

The Credit Reference Center (CRC), which is under the People's Bank of China, the country's central bank, started in 2006 to explore the collection of utility payment information to expand the scope of China's credit reporting system, Wang Xiaolei, deputy director of the center, said at a briefing in Beijing.

After gaining consent, the system will collect information on utility fees that are charged on a "use first, pay later" basis to help set up credit files for Chinese people who do not have credit records at financial institutions, Wang said.

At present, 460 million people do not have credit records.

The center will strictly regulate the integrity of the data, which will then be collected into the database and open for inquiry.

But questions persist, such as whether information can be correctly paired with the corresponding person, or whether someone will be penalized for not paying bills due to poor service by the utility provider, Wang said, noting that more time is needed to tackle these issues.

Utility fee information, such as overdue payments for more than two months, is likely to be gradually included, Dong Ximiao, a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Monday.

For those lacking credit records, collecting their utility payment information will help them build a credit profile and access more convenient financial services at a lower cost, Dong noted.

Equal treatment

The credit reporting system is being upgraded and it is not clear when the updated version will be released, according to the CRC.

But some new personal information will be added to the version currently being used, including nationality.

"Including nationality information [in the future credit reports] is just to reflect the actual situation as more and more foreign people come to live and work in China. They have demand for credit and will be treated equally with Chinese," Wang told the Global Times.

"Banks will do basic checks before granting them credit, and we will inform them if their credit information will be recorded," she said, noting the process may also involve cross-border information exchanges if their previous credit reports are needed.

Countries are cautious about providing such information and will have their own requests for the recipient institution to protect the information security of their citizens, according to Wang.

"In the context of globalization with the frequent exchange of goods, capital and people across the globe, to include nationality information will be conducive to controlling risks during cross-border economic activities and regulating global business," said Xu Hongcai, a Beijing-based economist.

It's a broader effort by the Chinese government, which is showing its determination to enhance the establishment of the domestic credit system, Xu said.

But during the process of information collection, some issues need greater focus such as privacy protection, Xu said.

Wang Danqing, a partner with Beijing-based ACME consultancy, agreed, saying that strict requirements will be imposed, such as how data can be used.

The CRC said it highly values the safety of credit reporting work and has stepped up efforts to improve the management system to prevent information leaks.

The credit report has become an "economic ID" for enterprises and individuals and the credit system has become a vital part of China's financial infrastructure. The system has recorded credit information from 990 million people and 25.9 million companies and other institutions.

The number of inquiries for personal credit reports by data subjects themselves reached 96.8 million in 2018.

Dong Ximiao is associate dean at the Chongyang Institute for Financial Studies at Renmin University of China.