China’s Potential New Trade Weapon: Corporate Social Credits

Wall Street Journal  | Fri, Aug 30, 2019

by Yoko Kubota

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BEIJING—After five years, China is putting the finishing touches on a sweeping new system to punish and reward companies for their corporate behavior. But foreigners worry that, amid the continuing U.S.-China trade dispute, Beijing will use its new corporate “social credit” system as a weapon against international businesses.

While Beijing’s better-known plans for a social-credit system for individuals have stirred privacy concerns, a parallel effort to monitor corporate behavior would similarly consolidate data on credit ratings and other characteristics, collected by various central and local government agencies, into one central database, according to China’s State Council. The system is set to fully start next year.

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