Social credit system must bankrupt discredited people

A senior official argued that without due punishment, defaulters would only feel encouraged after it was reported China’s social credit system had blocked more than 11.14 million flights and 4.25 million highspeed train trips by the end of April.

An improved social credit system was needed so that “discredited people become bankrupt,” Hou Yunchun, former deputy director of the development research center of the State Council, was quoted as saying by Sina Finance at an annual credit development forum in Beijing on Saturday.

“If we don’t increase the cost of being discredited, we are encouraging discredited people to keep at it,” Hou reportedly said. “That destroys the whole standard.” The names of 33,000 companies which violated laws and regulations have also been published, said Meng Wei, spokeswoman for the National Development and Reform Commission, news website chinanews.com reported on Wednesday.

Hou’s phrase that the “discredited people become bankrupt” makes the point, but is an oversimplification, Zhi Zhenfeng, a legal expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times.

“How the person is restricted in terms of public services or business opportunities should be in accordance with how and to what extent he or she lost his credibility.”

The punishment should match the deed, Zhi said.

China has regulations but a national law is needed to gauge that correct punishment.

“Discredited people deserve legal consequences,” Zhi said. “This is definitely a step in the right direction to building a society with credibility.”