General Office of the State Council: Encourage enterprises with high credit rating to reduce collateral and guarantee requirements, gradually expand the coverage of credit loans, and increase the proportion of credit loans.

Daily Business News reporter | Zhou Yifei    Daily Business News editor | Bi Luming

Recently, the General Office of the State Council issued the “Implementation Plan for Establishing a Comprehensive Enterprise Credit Assessment System” (hereinafter referred to as the “Implementation Plan”). It states that credit assessment should play a better supporting role in financing for small and micro enterprises. It encourages lowering the requirements for collateral and guarantee in enterprises with higher credit assessment grades, gradually expanding the coverage of credit loans, and increasing the proportion of credit loans.

He Ling, Director of the Comprehensive Evaluation Division of the Business Environment Development and Promotion Center under the National Development and Reform Commission, said in a written interview with reporters from Daily Business News that the formulation and launch of the “Implementation Plan” coincides with a key milestone at the start of the “15th Five-Year Plan,” which is an important institutional arrangement for implementing the Outline of the “15th Five-Year Plan.” Through systematic design, the “Implementation Plan” establishes the institutional framework and operating mechanism for a comprehensive enterprise credit assessment system. By means of twelve measures to address issues such as repeated assessments, fragmented standards, and insufficient protection of rights and interests, it promotes enterprise credit assessment to move from a phase of “exploration on one’s own” to a new stage of “unified and standardized” implementation, continuously injecting credit-driven momentum into high-quality development.

Unified Public Credit Assessment Rules

Private enterprises play an important role in China’s modernized economic system and are an important force driving high-quality economic development. However, although there are a large number of private small and micro enterprises, their business stability is relatively weak.

The core of optimizing the business environment is to reduce the institutional transaction costs faced by market entities. He Ling told reporters from Daily Business News that the “Implementation Plan” clearly encourages relevant departments, platform enterprises, and others to provide preferential or convenient measures for enterprises with good credit status. “This means that business entities with good credit will enjoy more credit benefits in financing services, bidding and tendering, administrative approvals, and other areas, significantly reducing institutional transaction costs and creating an atmosphere of ‘credit has value and keeping promises brings benefits,’ so that a better credit environment will continuously lead to a better business environment.”

In addition, the lack of unified credit assessment rules is also a key reason why risks for enterprises operating across regions increase.

In this regard, the “Implementation Plan” also proposes improving an industry credit assessment coordination mechanism. Competent industry authorities will include the results of comprehensive public credit assessment in the indicator system for industry credit assessment, with specific weights determined according to actual circumstances. If the comprehensive public credit assessment result is Grade D, then the industry credit assessment may not be rated as Grade A.

He Ling believes that, guided by standardization and regularization, the “Implementation Plan” will promote the nationwide unification of public credit assessment rules. First, unify the basic assessment rules. In principle, data for the public credit assessment indicator should come from public credit information. As a general rule, assessment results are divided into four tiers: A, B, C, and D. The assessment cycle should not exceed one year at most, and assessment rules should be disclosed to the public. Unified rules enable enterprises to clearly understand where their credit is “good” and where it is “poor.”

Second, establish a coordination mechanism for assessment results. Include the results of comprehensive public credit assessment in the industry credit assessment indicator system, and clearly stipulate that for enterprises whose comprehensive public credit assessment is Grade D, the industry credit assessment may not be rated as Grade A, effectively preventing the “two different layers” phenomenon in cross-industry assessment results.

Third, promote joint incentives. Encourage relevant departments to provide preferential or convenient measures to enterprises rated Grade A in industry credit assessment, further optimizing the development environment for creditworthy enterprises.

Expert: Suggest developing credit products that fit the characteristics of private small and micro enterprises

How can the “Implementation Plan” be implemented effectively? He Ling told reporters from Daily Business News that the “Implementation Plan” lays out a feasible approach to establishing a comprehensive enterprise credit assessment system. Its implementation requires close coordination among localities and departments. The key is to strengthen coordination in three areas.

First, strengthen coordination between government and the market to achieve complementary strengths. The government should play a foundational role. Drawing on the strengths of public credit assessment in terms of authority and broad coverage, it should provide a foundational, inclusive credit “baseline.” The market should leverage its professional role: based on public credit information, credit reporting institutions and rating agencies add commercial credit information, industry characteristic data, and other information, to provide diversified and personalized value-added services—such as developing credit products that fit the characteristics of private small and micro enterprises. To achieve complementary strengths, the key is to promote the integrated application of public credit information and market-based credit information: enabling market institutions to obtain public credit information in accordance with law, and enabling public credit assessment to absorb effective feedback from market-based information, forming a sound pattern in which the government “sets the stage,” the market “performs,” and strengths complement each other.

Second, strengthen coordination between the central and local governments to improve governance effectiveness. At the national level, efforts focus on top-level design and management and supervision. The National Development and Reform Commission should establish and improve the comprehensive enterprise credit assessment system. Competent industry authorities should establish nationwide unified credit assessment rule systems for their respective industries, conduct comprehensive checks and clean-ups of irregular assessment practices carried out by localities on their own initiative, and strengthen guidance to industry associations and chambers of commerce. Localities should focus on ground-level application and improving services. Relying on public credit assessment, they can innovate and cultivate more “credit+” application scenarios, making credit a “people’s livelihood dividend” that is within reach for enterprises and the public. Through central-local coordination to improve the credit governance system, achieve synchronized resonance between “top-level design” and “grassroots implementation.”

Third, strengthen coordination between assessment and application to promote coordinated efficiency gains. The vitality of credit assessment lies in application. Only by enabling assessment results to be “used” and “brought to life” can the incentive and constraint role be truly realized. Assessment should support application. Public credit assessment should closely align with industry characteristics, regulatory needs, and other factors, and fully and objectively reflect whether enterprises comply with laws and regulations and relevant management requirements. Application should in turn inform assessment. Feedback information generated during application is an important basis for optimizing assessment rules. For example, if financial institutions find that the actual default rate does not match the ratings, and if regulatory departments find that assessment results deviate from actual risks, both should establish a closed-loop feedback mechanism, promoting continuous improvement of credit assessment in application, and achieving positive mutual promotion between assessment and application and coordinated efficiency gains.

Cover image source: Economic Daily media resource database