Social Credit and the CCP 19th Congress (3): Tightening the Screw on Corporate Compliance?

A further, interesting development in the run-up to the 19th Congress of the CCP took place with the publication on the People’s Daily of a document adopted on September 8.

The document is entitled “Opinions of the CCP Central Committee and of the State Council on constructing an environment for the healthy growth of entrepreneurs, promoting the spirit of outstanding entrepreneurs and better developing the role of entrepreneurs.”

Divided in 10 chapters, and 19 paragraphs, the Opinions outline a series of programmatic measures to:

1. protect the lawful rights and interests of entrepreneurs

2. promote fair competition

3. create a social environmment that respects and encourages entrepreneurial initiative and innovation

4. promote compliance with law and discipline

5. promote innovation

6. encourage compliance with social responsibility

7. train outstanding entrepreneurs

8. strengthen Party leadership

There are signs that social credit mechanisms may become the means of choice to ensure corporate and individual compliance with the law and with social responsibility norms.

Among others, the Opinions call for establishing a robust sub-system of punishments and rewards tailored to entrepreneurs. The system will involve the creation of credit dossiers specific to entrepreneurs. Dossiders will include information retrieved from industry and commerce, tax, financial, environmental, safety production departments, judicial organs, and trade and industry associations.

Entrepreneurs already have the obligation to comply with existing social credit mechanisms. However, the decision to issue an Opinion specifically addressed to them shortly before the 19th Party Congress should not be under-estimated.

The Opinion may signal how, ahead of the 19th Party Congress, the CCP has already reached a consensus on certain very specific positions advanced by some of the forces it represents. Regardless of the dynamics that have led to its adoption, this document may have paved the way to a future tightening of compliance regulations.

The full text of the Opinion, in Chinese, can be accessed here.

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