President Joerg Wuttke Interviewed by Bloomberg on China’s Corporate Social Credit System Go back »
2019-08-28 | All chapters
Jörg Wuttke, president of the European Chamber, was interviewed by Bloomberg at the launch of the Chamber’s latest report, The Digital Hand: How China's Corporate Social Credit System Conditions Market Actors, in Beijing on 28th August. The interview covered a range of issues related to the corporate social credit system, including its potential impact on business and unique mechanism. President Wuttke called on foreign companies and governments to keep abreast of developments in China's corporate social credit system.
Regarding the impact of the Corporate Social Credit System (Corporate SCS), President Wuttke said he believes it will be beneficial for business in the long term, though it will cause a lot more uncertainty, costs and complexity.
President Wuttke said few foreign companies in China were well informed on the Corporate SCS, and many confuse it with the SCS for individuals. He added that the Corporate SCS is different as it is how China is rearranging the regulatory system. Companies will no longer only have one relationship with one authority. Data from all authorities such as taxes, customs, and environment will be pulled together and then organised by artificial intelligence. President Wuttke also pointed out that the SCS is unique globally, as it will be the only system under which companies are given a score. This means it will not just be the legal obligations in the market that drive companies, it will be the algorithm-driven score that determines how high a company's interest rate will be and how many licences it gets. As this system is unprecedented, the European Chamber would like to ask the Chinese government to clarify further on how the scores will be calculated.
President Wuttke said the screening of key personnel is happening already, especially in Chinese companies. The leadership of entities in China will be held responsible to a larger extent as their behaviours will influence the companies' score. President Wuttke said he believes there’s a need to draw a line between personal behaviour and company ratings. Therefore, the European Chamber will reach out to the government to communicate more on this issue.
President Wuttke urged companies to be better prepared for the upcoming Corporate SCS. He said he hopes that the Digital Hand report will reach out to the US community and others to help companies prepare for next year when the Corporate SCS is rolled out. He added that the report is also a wakeup call for governments in other countries to understand the Chinese market and communicate with the Chinese authority.
