Establishing and Improving the System of Joint Incentive for Keeping Faith and Joint Punishment for Losing Faith and Accelerating the Advancement of the Development of Social Honesty

• Document Number：No. 33 [2016] of the State Council
• Area of Law： Government Affairs
• Level of Authority： Regulatory Documents of the State Council
• Date issued：05-30-2016
• Effective Date：05-30-2016
• Status： Effective
• Issuing Authority： State Council

Guiding Opinions of the State Council on Establishing and Improving the System of Joint Incentive for Keeping Faith and Joint Punishment for Losing Faith and Accelerating the Advancement of the Development of Social Honesty
(No. 33 [2016] of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
The improvement of social credit system and the acceleration of the development of a new-type market regulatory system with the credit as its core are helpful to further promote the simplification of administrative procedures, decentralization of powers, and transformation of governmental function, and create a market environment featuring fairness and good faith. For the purpose of establishing and improving a system of joint incentive for keeping faith and joint punishment for losing faith, and accelerating the development of social honesty, the following opinions are hereby offered:
I. General requirements
(1) Guiding thought.
By comprehensively implementing the spirit of the 18th National Congress of the Communist Party of China(CPC), the Third, Fourth and Fifth Plenary Sessions of the 18th Central Committee of the CPC, by implementing in-depth the spirit of a series of important speeches delivered by the General Secretary Xi Jinping, according to the decisions and arrangements of the CPC Central Committee and the State Council, closely centered on the strategic arrangement of “Four Comprehensives,” by firmly establishing the concept of innovation, coordination, greenness, openness and shared development, by implementing, enhancing and innovating the requirement for social governance, the advancement of development of social credit system shall be accelerated, the information disclosure and sharing shall be enhanced, the credit incentive and restraint measures shall be used in accordance with the laws and regulations, a trans-regional, cross-departmental and cross-field system of joint incentive for keeping faith and joint punishment for losing faith jointly participated in by the government and society, so as to promote the market participants in lawful operation in good faith, maintain regular market order and create a social environment with good faith.
(2) Basic principles.
-- Commending good faith and punishing those losing faith. Credit incentive and restraint measures shall be underscored to provide more incentives to entities of good faith and punish more entities for losing faith, so as to benefit those keeping faith, restrain those losing faith, and develop a system and mechanism to commend good faith and punish those losing faith.
-- Cooperation between departments and social coordination. Through credit information disclosure and sharing, a trans-regional, cross-departmental and cross-field mechanism of joint incentive and joint punishment shall be developed, so as to form a common governance pattern featuring coordination and cooperation between government agencies, self-regulatory administration of industry organizations, vigorous participation of credit service institutions, and pervasive supervision by public opinions.
-- Protecting rights and interests in accordance with the laws and regulations. In strict accordance with the provisions of laws, regulations and policies, acts in good faith and acts losing faith shall be scientifically defined, and joint incentive for keeping faith and joint punishment for losing faith shall be conducted. Mechanisms for the repair of credit, objection, petition, etc. shall be established and improved to protect the legitimate rights and interests of the parties.
-- Highlighting priorities and overall arranging advancement. With adherence to problem orientation, priorities shall be given to the resolution of issues concerning losing faith in key fields which endanger public interests and public security for the time being, the people has strongly reported, and have significant and negative impact on social and economic development. The local people's governments and departments concerned shall be encouraged and supported in innovation and demonstration, and gradually promote the mechanism of incentive for keeping faith and punishment for losing faith to every field of economy and society.
II. Completing the mechanism to commend and stimulate acts in good faith
(3) Selecting and setting examples of good faith through multiple channels. Administrative counterparts with good credit as determined by departments concerned and social organizations during the implementation of credit administration by category, moral models of good faith, outstanding young volunteers, members of good faith recommended by industry associations and chambers of commerce, entities of good faith discovered by media, etc. shall be set as examples of good faith. Departments concerned and social organizations shall be encouraged to establish credit records of entities of all types in administration and service, promote to society those without bad credit records and relevant examples of good faith, and team up with other departments and social organizations to provide incentives to those keeping faith. Industry associations and chambers of commerce shall be encouraged to improve the credit assessment mechanism of member enterprises. Enterprises shall be guided in voluntarily making comprehensive credit promises or special promises over product or service quality, etc., disclose product or service standards in self declaration, accept social supervision, and create a good atmosphere where enterprises compete to be models of good faith.
(4) Exploring and establishing a “green passage” for administrative approval. In the process of handling administrative licensing, examples of good faith and administrative counterparts which have no bad credit records over three consecutive years may, based on the actual circumstances, be provided “green passage,” “acceptance notwithstanding temporary lack of some documents,” and other facilitating services. In respect of an eligible administrative counterpart, save documents which shall be provided as required by laws and regulations, if some application documents are incomplete but it promises in writing the provision of such documents within a prescribed time limit, such application shall be accepted to accelerate the handling process.
(5) Prioritizing the supply of public service convenience. During the implementation of the arrangement of financial funds programs, preferential policies supporting investment attraction, and other types of governmental preferential policies, consideration shall be given to in priority market participants of good faith, and more support shall be given. In the fields of education, employment, entrepreneurship, social security, etc., individuals of good faith shall be provided key support and convenience in priority. In the activities as to public resources, it shall be advocated to adopt bonus points for credit and other measures in accordance with the law and agreements in respect of market participants.
(6) Optimizing administrative regulatory arrangements for enterprises of good faith. The market regulatory departments at all levels shall, based on the credit records and credit appraisal category of the regulation counterparts, pay attention to the adoption of big data measures, improve interim and ex-post regulatory measures, and provide facilitating measures to market participants. In respect of enterprises of good faith satisfying certain conditions, frequencies of routine examination and special inspection shall be optimized.
(7) Reducing market transaction cost. Relevant departments and entities shall be encouraged to develop “easy tax loan,” “easy credit loan,” “easy credit debt,” and other incentive products for good faith, and financial institutions, commercial sale institutions and other market service institutions shall, by referring to and using the information on the credit, accumulated points for credit and credit appraisal results of market participants, provide more preferential treatment and convenience to market participants of good faith, and allow those of good faith to gain more opportunities and material benefit in market.
(8) Vigorously promoting market participants of good faith. The departments concerned of the people's governments at all levels shall publicize in a timely manner the information on the outstanding credit of market participants of good faith at government websites and the “Credit China” website, promote in priority enterprises of good faith at exhibitions, bank-enterprise connection, and other activities, and make credit an important reference factor in the market resource allocation. Credit investigation institutions shall be guided in strengthening the collection of positive information of market participants, and put more weight on the incentive rating of market participants of good faith in industries and fields with many reported problems on good faith. Industry associations and chambers of commerce shall be propelled to strengthen the development of good faith and self-regulation, commend members of good faith, and report “stories on good faith” in the industries.
III. Improving the mechanism to restrain and punish acts losing faith
(9) Imposing joint punishment in key fields and on acts seriously losing faith. On the basis that the relevant departments and social organizations handle and appraise acts losing faith in their respective industries in accordance with the laws and regulations, through information sharing, other departments and social organizations shall be promoted in imposing joint punishment measures on acts seriously losing faith in accordance with the laws and regulations. Key points include: firstly, acts seriously endangering the health, life and safety of the people, including acts seriously losing faith in the fields of food, medicine, eco-environment, engineering quality, safe production, safety in fire prevention, compulsory certification, etc. Secondly, acts seriously damaging fair competition order of markets and regular social order, including bribery, tax evasion, tax fraud, malicious escape from financial obligations, malicious default in payment for goods or services, malicious default in payment of remuneration, illegal fund-raising, contract fraud, pyramid schemes, unlicensed business, manufacture and sale of counterfeit, fake and inferior products, intentional infringement upon intellectual property rights, bidding by lending or borrowing qualifications, bid rigging, colluded bidding, false advertisement, infringement upon the legitimate rights and interests of consumers or investors in securities or futures, serious damage to the dissemination order of cyber space, disrupting the public order by rallying people, and other acts seriously losing faith. Thirdly, refusing to perform statutory obligations and seriously jeopardizing the credibility of judicial agencies and administrative agencies, including the acts seriously losing faith that after the judgment rendered or decision made by judicial agencies or administrative agencies, the parties capable of fulfilling their obligations refuse to satisfy or escape from satisfaction, etc. Fourthly, refusing to perform defense obligations, refusing or escaping from military service, refusing or delaying the requisition of civil resources, or impeding the reconstruction of requisitioned resources, jeopardizing defense interests, damage to defense facilities, and other acts.
(10) Strengthening administrative restraint and punishment on acts losing faith. In respect of entities seriously losing faith, all regions and all departments concerned shall list them as key regulatory counterparts, and adopt administrative restraint and punishment measures in accordance with the laws and regulations. All regions and all departments concerned shall strictly examine and verify administrative licensing and approval programs, strictly control the issuance of production licenses, limit approval and examination of newly added programs, limit stock issuance, public listing for financing or bonds issuance, limit listing and financing on the National Equities Exchange and Quotations, limit the establishment or holding shares of financial institutions, small-loan companies, financing guarantee companies, startup investment companies, Internet financing platforms and other institutions, limit the engagement in Internet information services, etc. All regions and all departments concerned shall strictly limit their application for financial funds programs, limit their participation in transactions involving relevant public resources, and limit their participation in the licensed operation of infrastructures and public undertaking. Enterprises seriously losing faith, their legal representatives, principal persons in charge, registered professionals directly responsible for acts losing faith, etc. shall be subject to measures of prohibition from market and industry access. The honorary titles of enterprises seriously losing faith, their legal representatives, persons in charge, senior executives, directors and shareholders directly responsible for acts losing faith, and other persons shall be revoked in a timely manner, and they shall be disqualified for the participation in the selection for advanced and outstanding persons or entities.
(11) Strengthening market-oriented restraint and punishment on acts losing faith. In respect of entities seriously losing faith, relevant departments and institutions shall disclose in a timely manner the relevant information with the unified social credit codes as index, to facilitate the market in identifying acts losing faith and preventing credit risks. Relevant departments and institutions shall urge the relevant enterprises and individuals to perform statutory obligations, restrain entities seriously losing faith, which are capable of fulfilling their obligations but refuse to do so, from going abroad and from purchasing immovable property, taking airplane, taking senior-rating train and seats, traveling for holiday, checking in hotels with star rating, and other luxury consumption, and take other measures. Credit investigation institutions shall be supported in collecting information on acts seriously losing faith, and including them into credit records and credit reports. Commercial banks, securities and futures business institutions, insurance companies and other financial institutions shall be guided in, according to the principle of risk pricing, raising the loan rates and property insurance premium rates in respect of entities seriously losing faith, or restraining the provision of loans, sponsorship, consignment sales, insurance and other services to them.
(12) Strengthening industry-oriented restraint and punishment on acts losing faith. Industry self-regulatory conventions and professional ethics codes shall be established and improved to promote the industrial credit development. Industry associations and chambers of commerce shall be guided in improving the mechanism of internal credit information collection and sharing, and including acts seriously losing faith into member credit archives. Industry associations and chambers of commerce shall be encouraged to cooperate with qualified third-party credit service institutions in rating and appraising the credit of member enterprises. Industry associations and chambers of commerce shall be supported in, according to the industrial standards, industrial provisions, industrial regulations, etc., as the circumstances may be, taking such disciplinary measures as warning, circulation of a notice of criticism in the industry, public criticism, no acceptance, persuasion for quit, etc.
(13) Strengthening social restraint and punishment on acts losing faith. The role of social organizations of all types shall be allowed to fully play their roles, and social resources shall be guided in the pervasive participation in the joint punishment for losing faith. A system of reporting loss of faith shall be established and improved, the public shall be encouraged to report enterprises seriously losing faith, and the information of the informants shall be strictly kept confidential. Relevant social organizations shall be supported in filing public interest litigation against environmental pollution, infringement on the legitimate rights and interests of consumers and public investors, and other group tortious acts. Impartial, independent and qualified social institutions shall be encouraged to monitor public opinions on acts losing faith with big data, and compile and publish regional and industrial credit analysis report.
(14) Improving personal credit records and promoting the implementation of joint punishment measures to individuals. Acts losing faith of enterprises and institutions shall be included into the credit records of enterprises and institutions, and at the same time into the personal credit records of their legal representatives, principal persons in charge and other persons directly responsible. While joint punishment is imposed on enterprises and institutions losing faith, corresponding punishing measures shall be imposed on relevant responsible persons according to the provisions of laws, regulations and policies. The joint punishing measures for losing faith shall be implemented to individuals by establishing a complete personal credit record database and a joint punishment mechanism.
IV. Establishing a coordination mechanism of joint incentive for keeping faith and joint punishment for losing faith
(15) Establishing a trigger and feedback mechanism. Under the system of the inter-ministerial joint meeting for the development of social credit system, a initiating and responding mechanism of joint incentive for keeping faith and joint punishment for losing faith shall be established. The departments initiating the joint incentive for keeping faith and joint punishment for losing faith in all industries shall be responsible for determining who shall receive incentives or punishment, and the initiating departments shall be responsible for taking corresponding joint incentive or joint punishment measures against the relevant entities.
(16) Implementing ministry-province coordination and trans-regional cooperation. All regions shall be encouraged to determine examples of good faith and entities seriously losing faith within their respective administrative regions, and initiate ministry-province coordination and trans-regional joint incentive and punishment. The guiding role of the system of the inter-ministerial joint meeting for the development of social credit system shall be made full use of, and a trans-regional, cross-departmental and cross-field mechanism of cooperation in the development of social credit system shall be established and improved, to strengthen credit information sharing and mutual admission of credit rating results.
(17) Establishing and improving a credit information publicizing mechanism. The disclosure of the information on government credit shall be advanced and the online disclosure system of the information on administrative licensing and administrative punishment shall be comprehensively implemented. Unless it is otherwise provided in laws and regulations, the people's governments at or above the county level and their departments shall disclose within 7 working days on government websites the information on the administrative licensing, administrative punishment, etc. of all types of natural persons, legal representatives and other organizations, and timely submit it to the “Credit China” website, to provide the public “one-stop” inquiry service. Relevant information involving enterprises shall, according to the provisions of the Interim Regulation on the Publication of Enterprise Information, be publicized at the enterprise credit information publication system. Judicial agencies shall be advanced to publicize judicial judgment, lists of persons subject to enforcement resulting from losing faith, and other credit information at the “Credit China” website.
(18) Establishing and improving a mechanism to summarize, share and use credit information. Depending on the National E-Government Network, a national credit information sharing platform shall be established to play the pivotal role to summarize and share credit information. The establishment and improvement of credit sharing platforms of all provinces (autonomous regions and municipalities directly under the Central Government) and the credit information systems of all industries shall be accelerated, and the development of China young volunteers credit information system and other programs shall be advanced, so as to summarize and integrate the credit information of all regions and industries, and realize the interconnection and information sharing of nationwide credit information sharing platforms. Depending on the national credit information sharing platform, based on the memorandum of cooperation concluded between the relevant departments, a credit information management system of joint incentive for keeping faith and joint punishment for losing faith shall be established to realize response initiating, information push, feedback execution, credit repair, objection handling, and other dynamic coordinating functions. The people's governments at all levels and their departments shall embed the inquiry and use of credit information of the national credit information sharing platform in the work process of examination, approval and administration, and ensure that “those who should be examined are examined,” and “reward and punishment are put in place.” The mechanism for the government and credit investigation institutions, financial institutions, industry associations, chambers of commerce and other organizations to share information shall be improved, and the interaction and integration of government credit information and social credit information shall be promoted, to maximize the role of joint incentive for keeping faith and joint punishment for losing faith.
(19) Regulating the credit red list and blacklist systems. The system of red list of examples of good faith and the system of blacklist of entities seriously losing faith shall be constantly improved, the making and publication of red lists and blacklists in all fields shall be regulated in accordance with the laws and regulations, and an exit mechanism shall be established and improved. On the premise of guaranteed independence, impartiality and objectivity, the relevant civil groups, financial institutions, credit investigation institutions, rating institutions, industry associations, chambers of commerce, etc. shall provide the information of the “red lists” and “blacklists” to government departments for their reference and use.
(20) Establishing a list system of incentive and punishment measures. On the basis of memorandum of cooperation in relevant fields, the matters subject to joint incentive and joint punishment as specified by the provisions of laws, regulations and policies shall be sorted out, lists of joint incentive and joint punishment measures shall be established, which shall fall into two categories: firstly, compulsory measures, i.e. incentive and punishment measures jointly taken in accordance with the law; and secondly, recommended measures, i.e. measures recommended by all participants, being in conformity with the guiding policy of commend good faith and punishing the loss of faith, and implemented by all regions and all departments based on actual circumstances. The inter-ministerial joint meeting for the development of social credit system shall summarize experiences, constantly improve two types of lists of measures, and promote the enactment of the relevant laws and regulations.
(21) Establishing and improving credit repair mechanism. The departments initiating joint punishment measures and the implementation departments shall, according to the provisions of laws, regulations and policies, specify the period of the joint punishment on all types of acts losing faith. Whoever rectifies acts losing faith and eliminate negative influence within the prescribed time limit shall not be subject to joint punishment anymore. A social encouraging and caring mechanism helpful for self-correction of errors and voluntary rectification shall be established to support individuals with acts losing faith in repairing personal credit through social charitable services and other methods.
(22) Establishing and improving a mechanism to protect the rights and interests of the subjects of credit. A credit information objection and complaint system shall be established and improved. If, when implementing joint punishment measures for losing faith, the relevant departments and entities find by themselves, or find upon the objection or complaint filed by market participants, that the information is untrue, they shall timely inform the entities supplying the information for verification, and the entities supplying the information shall verify it as soon as possible and feed it back. The joint punishment measures shall not be implemented during the verification of the information. Timely correction or revocation shall be made if the information is wrong after verification. If the legitimate rights and interests of relevant entities are damaged arising from erroneous adoption of joint punishment measures, relevant departments and entities shall vigorously adopt measures to restore their reputation and eliminate negative effect. Relevant entities shall be supported in protecting their own legitimate rights and interests through administrative reconsideration, administrative litigation and other methods.
(23) Establishing a follow-up mechanism for efficiency. All regions and all relevant departments shall establish and improve all systems of joint incentive and punishment, make full use of the relevant credit information management system like the national credit information sharing platform, establish and improve a follow-up, monitoring, statistics and assessment mechanism of joint incentive and punishment as to credit, and establish a corresponding supervision, examination and appraisal system. Departments and entities which ineffectively implement the measures of the collection and sharing of credit information, and incentive and punishment shall be subject to the circulation of notices and shall be urged to make rectification, so as to practically implement all joint incentive and joint punishment measures.
V. Strengthening the development of rules, systems and the culture of good faith
(24) Improving the relevant laws and regulations. The legislation in the field of social credit shall be continuously researched and argued. The research and advancement of collection, sharing, disclosure and use of credit information, and the legislative work in joint punishment on acts losing faith and other aspects shall be accelerated. According to the requirement for strengthening credit restraint and coordinated administration, all regions and all departments shall put forward suggestions on the amendment to the existing laws, regulations, rules and regulatory documents, or make targeted amendments.
(25) Establishing and improving standards and norms. The standards of the collection, storage, sharing, disclosure and use of information, credit rating, credit management by category, etc. shall be developed. The norms of the development of credit information sharing platforms at all levels shall be determined, and the technical requirement for data format, data interface, etc. shall be unified. All regions and all departments shall, based on the actuality, develop the work process and operation standards of the collection, storage, sharing, disclosure and use of information as well as joint incentive for keeping faith and joint punishment for losing faith.
(26) Strengthening education on good faith and the development of the culture of good faith. The forces of all parties in society shall be organized, market participants shall be guided in conducting business in good faith in accordance with the law and developing the concept of “business thriving in good faith,” and media and multiple channels shall be organized to publicize enterprises and individuals of good faith, so as to create sound social atmosphere. Moral restraint on acts losing faith shall be strengthened, the public opinion supervision mechanism shall be improved, the supervision over entities losing faith shall be enhanced through newspapers, radio, television, the Internet and other media outlets, the cases featuring loss of faith which have bad impact on society and are under serious circumstances shall be revealed in accordance with the law, and public appraisal, discussion, criticism and other activities shall be conducted, so as to form public opinion pressure and moral restraint on acts seriously losing faith. Education and help to individual losing faith shall be strengthened through schools, entities, communities, families, etc., so as to guide them in making timely rectification about the acts losing faith. Publicity and education for persons in charge of enterprises, students and young people shall be strengthened, and the development of professional ethics of accountants, auditors, tour guides, insurance brokers, public officers and other key groups with good faith as important content shall be enhanced. The publicity, coverage, and case study of joint incentive for keeping faith and joint punishment for losing faith shall be enhanced so as to advocate socialist core values.
(27) Strengthening organization, implementation, supervision and examination. All regions and all relevant departments shall deem the implementation of joint incentive for keeping faith and joint punishment for losing faith as important measures to advance the development of social credit system, conscientiously implement these Opinions, formulate specific implementation plans, practically strengthen organization and leadership, determine work institutions, staffing, program funds and other necessary guarantee, and ensure that all joint incentive and joint punishment measures are implemented. Relevant regions and departments shall be encouraged to conduct pilot program first, establish a permanent mechanism by concluding memorandum of cooperation, issuing regulatory documents and other means, constantly enrich the content of credit incentive, and strengthen credit restraint measures. The National Development and Reform Commission shall strengthen overall coordination, timely follow and master work progress, supervise and examine the implementation of tasks, and make a report to the State Council.
State Council
May 30, 2016