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Social credit will affect foreign firms in China

Monday, September 2, 2019

Subject

China's corporate social credit system.

Significance

The corporate social credit system (CSCS) is now at a decisive stage as the authorities ramp up implementation and expansion nationwide. All companies, including foreign enterprises, will have to participate.

Impacts

  • Foreign companies operating in China will have to provide more data for credit scoring.
  • The information made publicly available on CSCS platforms will be useful in evaluating the trustworthiness of business partners in China.
  • The CSCS may level the playing field for foreign firms, because it is based on objective regulatory compliance measures.
  • The CSCS will increase the cost of non-compliance with laws and regulations.
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