Zhang Junkuo & Zhao Huaiyong

The establishment and improvement of social credit system is a prerequisite for improving the socialist market economic system, and is also the fundamental solution to regulating the market order. In terms of promoting the development and improvement of social credit system, the government has an important role to play, that is, to timely enact various laws and policies relating to the development of social credit system.

I. Connotation of Social Credit System and the Legislative Priorities

Social credit system has both broad and narrow senses. Social credit system in the broad sense includes four key links and aspects relating to credit transactions: the issuance of credit; the management and control of credit risks; the disclosure and service of credit information; and punishment for credit breach.

Social credit system in its narrow sense mainly refers to the system framework and service system relating to the above three kinds of activities, that is, the disclosure of credit information and service activities. In terms of international experiences, the establishment and improvement of the credit information disclosure and service system is the most important channel for improving the social credit conditions. In terms of China’s current practical situation, the credit information disclosure and service system are the most lagging behind and lacking, and require urgent improvement. Therefore, it is recommended that the establishment of legal framework relating to credit information disclosure and service activities should be considered as the legislative priority at the present.

The legal framework relating to credit information disclosure and service activities mainly involves laws and regulations in three aspects: laws and regulations promoting the disclosure of credit information; laws and regulations relating to the protection of credit information; and laws and regulations relating to standardizing the information service organizations.

II. Enacting and Improving Laws and Regulations on Promoting the Information Disclosure

To make credit information public according to law and to reasonably gather and to utilize such information fairly are the basic conditions for the establishment of the social credit system. Fundamentally speaking, information reflecting the main market credit situation mainly comes from the following three players: the government; the other transaction parties; and the party itself. Practical experiences prove that information accuracy and adequate disclosure are all very important. The players in these aspects are different in nature, and therefore they should be treated separately and differently when enacting legislation.

Information arising from the course of administrative law enforcement by government departments as industrial and commerce administration, customs, taxation, public security and judicial departments is an important source and component of credit information, and it is of critical importance for the construction of social credit system by making public such information according to law. As the provider of public products, credit information possessed by the government is of the nature of public property and belongs to social public resources. And it is the statutory obligation of the government to make public such information according to law. Therefore, the basic legislative principle should be: Making public government information is a general principle, and it is an exception if such information is not made public; and making public government information should not be oriented for profits. In the long term, it is necessary to enact a unified Government Information Disclosure Law. In the short term, considering the fact that enactment of the Government Information Disclosure Law involves many departments and need to properly handle complicated relationships, it is advisable to enact legislation on the disclosure of enterprise and personal credit information possessed by the government organizations, to enact the Regulations on the Disclosure of Government Credit Information as an experiment, and then enact the Government Information Disclosure Law when the conditions are ripe.

Generally speaking, information of enterprises and private individuals and information about business partners gathered during business activities all fall into the category of "private property", and they are not obligated to make such information public free of charge. From international experiences, there are few special laws mandating that enterprises and individuals must make public their own information and information about their transaction partners they come to know. In terms of China’s situation, there is no need to enact such special laws or policies.

Because financial institutions such as banks come to know large volumes of credit information about industrial and commercial enterprises and individuals in their business activities and occupy an extremely important position in the construction of social credit system, there is a need to formulate special rules and regulations governing financial institutions such as banks in making those credit information public. By borrowing international experiences and taking into consideration of China’s practical conditions, the following three principles should be reflected and observed in establishing the mechanism by which the financial institutions make public the clients’ information: the principle of voluntariness; the principle combining the protection of customers’ rights and interests and the punishment for credit breach; and the principle of encouraging competition.

III. Enacting and Improving Laws and Regulations on Information Protection

Information protection and guarantee of information flow contradict with each other, and laws must be made to regulate the relationship between the two in a balanced manner. Therefore, at the time of enacting laws promoting the disclosure of information, relevant laws relating to information protection must also be enacted and improved so as to ensure that privacy, commercial secrets and State secrets are free from illegal infringement.

Personal information includes privacy. When making public personal information, measures must be taken to protect privacy. First, to add clauses on privacy protection in the General Principles of Civil Law; Second, to enact the Privacy Law to expressly define the scope of privacy and legal liabilities for infringing upon privacy; Third, to clearly stipulate in the Government Information Disclosure Law that the disclosure of government information should not include privacy; and Fourth, to add relevant clauses on infringement upon citizens’ privacy to the Criminal Law.

Making public enterprise credit information also involves the protection of business secrets of enterprises. At present, the legal framework on the protection of commercial secrets should follow two principles: first, to strengthen the protection of business secrets of enterprises through legislation, and second, to regulate the relationship between the protection of commercial secrets and information disclosure, that is, at the time of effectively protecting commercial secrets of enterprises, realize reasonable disclosure of enterprises’ credit information. In terms of specific legal framework, the first thing is to enact, as soon as possible, the Law on the Protection of Commercial Secrets to expressly define the scope of commercial secrets and the legal liabilities for infringing commercial secrets, the second thing is to expressly stipulate in the Government Information Disclosure Law that the disclosure of government information does not include commercial secrets of enterprises.

Due to restrictions of historical environment when laws were enacted and the management needs, China’s existing laws and regulations on the protection of State secrets have an outstanding problem, that is, the definition of State secrets is too broad and ambiguous. This is, on the one hand, unhelpful to the effective protection of State secrets, and on the other hand, it also means restrictions on making government information public. International experiences have proven that the scaling down of the scope of secrets is, in essence, more constructive to the effective protection of information. At present, it is an urgent task to sort out and modify the "Rules on the Scope of Secrecy" made by various departments so as to better suit the needs for development.

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