Lo­cal govts pay off 3.3b yuan debt for so­cial credit sys­tem

Global Times US Edition - - CHINA - By Zhang Han

The Chi­nese cen­tral govern­ment said Thurs­day that lo­cal gov­ern­ments which had been listed as dis­hon­est en­ti­ties have paid off debt of over 3.3 bil­lion yuan ($475.5 mil­lion), as dis­hon­est per­sons will be barred from tak­ing pub­lic trans­porta­tion in the coun­try.

The Na­tional De­vel­op­ment and Re­form Com­mis­sion ( NDRC) has been tar­get­ing lo­cal gov­ern­ments’ dis­hon­est be­hav­ior since 2017, which is an es­sen­tial part of build­ing a vi­tal so­cial credit sys­tem in China, NDRC spokesper­son Meng Wei said at a press con­fer­ence in Bei­jing on Thurs­day.

Dis­hon­est en­ti­ties usu­ally in­volved peo­ple, le­gal per­sons of en­ter­prises and so­cial or­ga­ni­za­tions. But me­dia re­ports found out more than 100 lo- cal gov­ern­ments had been listed as dis­hon­est en­ti­ties.

Top of­fi­cials of dis­hon­est gov­ern­ments are banned from tak­ing high-speed rail­way, con­sum­ing in golf courts and high-end ho­tels, and pur­chas­ing real es­tate, ac­cord­ing to the reg­u­la­tions of China’s Supreme Peo­ple’s Court.

Zhu Wei, a pro­fes­sor at the China Univer­sity of Po­lit­i­cal Sci­ence and Law in Bei­jing, noted be­ing listed as dis­hon­est en­ti­ties serves as a warn­ing to lo­cal gov­ern­ments that they are not only ad­min­is­tra­tive en­ti­ties, but also civil sub­jects that should abide by civil laws.

Lo­cal gov­ern­ments some­times de­fault on con­struc­tion project money and de­mo­li­tion com­pen­sa­tion, vi­o­lat­ing civil laws and dam­ag­ing their trust­wor­thy image, Zhu told the Global Times on Thurs­day.

Top of­fi­cials of dis­hon­est gov­ern­ments will be ques­tioned by a so­cial credit con­struc­tion or­gan at the pro­vin­cial level to rec­tify dis­hon­est be­hav­ior, Meng said at the press con­fer­ence.

Dis­hon­est gov­ern­ments will also be re­ported to com­mer­cial banks, which would have an im­pact on the amount of loans banks could grant them. Govern­ment dis­hon­esty will also lead to a down­grade in their city credit rank­ing, Meng noted.

Low credit rank­ing and a bad record at fi­nan­cial in­sti­tu­tions will dis­cour­age po­ten­tial in­vestors. There­fore, the method is ef­fec­tive in reg­u­lat­ing govern­ment be­hav­ior, Zhu noted.

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