‘Credit cities’ make in­roads in China

China Daily (Hong Kong) - - BUSINESS -

HANGZHOU — Zhang Hao found a job at a se­cu­ri­ties com­pany in the east­ern city of Hangzhou af­ter grad­u­a­tion.

The 28-year-old then saw an apart­ment he liked on­line be­fore log­ging on to the mo­bile pay­ment app Ali­pay, which is part of the sprawl­ing e-com­merce pow­er­house Alibaba Group Hold­ing Ltd.

Ali­pay rates a cus­tomer’s credit based on their con­sump­tion and in­vest­ment habits on the app.

Zhang had a high score and was ex­empted from the rental de­posit of 2,600 yuan ($380) and the bro­ker­age fee of 1,300 yuan.

The whole ex­pe­ri­ence not only saved him time and en­ergy in rent­ing an apart­ment, which is of­ten com­pli­cated in China, but also gave him a fresh look at the city where he was about to build a ca­reer. It gave him a “sense of be­long­ing”.

In China, more and more cities have of­fered cred­it­based ser­vices to cit­i­zens. And more and more peo­ple, such as Zhang, have be­gun to own their credit scores.

At a fo­rum on credit sys­tem build­ing in Hangzhou ear­lier last week, rep­re­sen­ta­tives from more than 300 Chi­nese cities jointly re­leased a dec­la­ra­tion. Their aim will be to im­prove peo­ple’s well-be­ing by en­hanc­ing credit build­ing in the coun­try.

“The credit econ­omy has kicked off in China,” said Lian Weil­iang, deputy head of the Na­tional Devel­op­ment and Re­form Com­mis­sion.

The cen­tral govern­ment has is­sued sev­eral doc­u­ments en­cour­ag­ing and guid­ing the so­cial credit sys­tem dur­ing the past three years.

With­out any de­posit, one can bor­row a bike, power bank, li­brary book or um­brella with the help of a smart phone.

“The build­ing of a credit city has made ur­ban life eas­ier and city gov­er­nance more ef­fi­cient,” said Zhu De­hai, deputy sec­re­tary of the city gov­ern- ment of Huaibei in An­hui prov­ince.

“In Hangzhou, credit is cash,” said Peng Lei, pres­i­dent of Alibaba’s fi­nan­cial arm Ant Fi­nan­cial. She said cit­i­zens with good Ali­pay credit could en­joy priv­i­leges in var­i­ous public ser­vices and ur­ban liv­ing.

Ac­cord­ing to Ant Fi­nan­cial, Ali­pay has ex­empted more than 38 bil­lion yuan of de­posits for its users, in­clud­ing 4 bil­lion yuan in bike-shar­ing fees.

yuan

de­posits Ali­pay has ex­empted its users from, in­clud­ing 4 bil­lion yuan in bike-shar­ing fees

Ex­perts said that due to an un­sound credit sys­tem in China, de­posits were amount­ing to tril­lions of yuan, lead­ing to heavy so­cial man­age­ment costs.

There are more than 3,000 public li­braries in China. But most of them have few vis­i­tors.

Ac­cord­ing to Guangzhou Li­brary, lo­cal cit­i­zens vis­ited it just 1.15 times on av­er­age last year.

But be­cause of the credit bor­row­ing ser­vice, cit­i­zens in many cities can now visit dig­i­tal li­braries, place or­ders on­line and have their books de­liv­ered to the door step.

A sur­vey tar­get­ing more than 100 city may­ors and man­agers in the coun­try re­vealed that 81 per­cent felt it would take up to 10 years be­fore China be­came a credit so­ci­ety.

But more than half said their city had al­ready started credit build­ing.

Statis­tics from Ant Fi­nan­cial showed that nearly 300 mil­lion Chi­nese had en­quired about their credit records or en­joyed credit ser­vices.

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