Local government agencies should take credit records into account when carrying out inspections, inviting bids, recruiting and promoting officials, as well as considering awards and setting punishments, according to a draft regulation released yesterday.
The draft of the Shanghai Social Credit Regulation stipulated the government bodies should check the credit records of individuals and companies before issuing subsidies or handling applications for local residence permits and hukou, the city's household registration, or permanent residency permit.
The draft bill was submitted to the city's legislative body yesterday for evaluation.
It is expected to be approved by Shanghai People's Congress in mid-2017, making Shanghai the first city on the mainland to have such credit legislation, said Shao Zhiqing, vice director of the Shanghai Economy and Information Technology Development Commission.
Those with good credit records will receive priority during various applications and the application process will be simplified. It will also be easier for them to receive financial or other support from the government. Companies, with a good record, can expect the frequency of random checks from the government to be reduced.
However, those with poor credit histories will become major targets for inspections and will not receive full government support.
Local banks and other financial institutions are also encouraged to increase loan and insurance rates or stop lending money to those with poor credit histories, while offering discounts and other incentives to those with good credit accounts, the draft bill stated.
It also stipulated that violations of food and drug safety, environmental protection, construction quality and production safety regulations, as well as fire safety and other activities threatening public health and safety will be deemed as "serious credit losses."
The serious losses tag will also include those who offer bribes, cheat on taxes, refuse to follow adjudications or dodge military service.
The government bodies, industry associations and companies can publicize their lists of the "serious credit losses," the draft bill said.
Those on the list will receive "special penalties" such as being banned from industries as well as being hit with financial curbs, the draft said.
Local individuals can view their own credit counts twice a year. Poor records can be removed if the offenders have corrected their wrongdoings.
Those who illegally obtain, steal, provide or sell personal credit accounts may face criminal charges, the draft added.