, said that commercial cheating, vicious debt arrears or escaping debts and arbitrage are frequent, presenting serious hidden dangers to economic and financial security.
"These malpractices have not only distorted economic relations, but also increased the cost of trading, ruined social conventions, and impaired the development of the market economy," Xie said.
The negative effect and losses due to creditability problems are huge. Among the 60,000 enterprises that open accounts with the four major state-owned commercial banks, more than half have been found to have escaped debts, leaving a great amount of bad debts in the commercial banks.
It is estimated that forged and shoddy goods cause an annual loss of 200 billion yuan, and the amount of financial expense added due to debt chains and cash transactions tops 200 billion yuan.
"Credit is the life-blood of a market economy. To build China's credit system is of vital importance in guarding against financial risks," Xie Qingjian said.
A low credit rating will inevitably affect international cooperation and the inflow of foreign capital. Many Chinese specialists proposed laws on social credit in order to secure a normal economic order and regulate the behavior of enterprises and individuals.
The modern information networks would make a universal social credit system possible, according to the specialists.
( March 10, 2002)