Foreign companies operating in China will soon operate under the corporate “social credit” system imposed by Beijing, a EU Chamber of Commerce, reported the Financial Times.
Chinese regulators from tax officials to customs agents are increasingly rating companies according to compliance with regulations, and sharing “blacklists” of corporations found to have violated rules, said the EU Chamber report. Beijing plans to combine those ratings into a single database that could be operational by next year, the report added.
Government documents show that a variety of Chinese regulators, covering areas from work safety to e-commerce and cyber security, are compiling ratings of companies against up to 300 specific rules, the chamber said.
The system primarily aims to improve the enforcement of existing regulations, and in many cases foreign companies could benefit as they often have better compliance in areas such as pollution, the chamber added.