China's Corporate Social Credit: a Comprehensive Compliance Enforcement System
September 20, 2019 | BY
Vincent ChowSet to be fully implemented in 2020, China's corporate social credit system will monitor all aspects of a company's operations and seek to shape their behavior through blacklistings and joint punishments. Lawyers and experts alike suggest foreign companies take advantage of the system when conducting due diligence and localize their compliance programs.
Jiangxi, China – February 23, 2019: Chinese women workers weave silk in neat coils.
Foreign companies must start preparing for China's corporate social credit scoring system or risk "[dying] by the score" – the stark warning of a new report from the EU Chamber of Commerce in China (EUCCC) authored in conjunction with the consultancy Sinolytics.
The report warns that corporate social credit "will be the most comprehensive system created by any government to impose a self-regulating marketplace". However, a year out from the system's full roll-out, foreign companies are largely unaware of corporate social credit despite the report warning that it could spell "life or death" for companies.
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