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3rd Seminar on Sharing Best Practices and Enhancing Cooperation of Credit Reporting between Mainland China, Taiwan and Hong Kong Held in Xiamen
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Date: September 19, 2014

The “Third Seminar on Sharing Best Practices and Enhancing Cooperation of Credit Reporting between Mainland China, Hong Kong and Taiwan” was held in the city of Xiamen under the co-sponsorship of the CCRC, the China Society for Finance and Banking, the Taiwan Academy of Banking and Finance (TABF), China Credit Information Service Ltd., and TransUnion (HK) between September 16 and 17, 2014. Pan Gongsheng, Deputy Governor of the PBC, delivered the opening address at the event. The seminar also saw addresses by Hsu Chia-tung, Chairman of TABF, and Lu Lei, Director-General of the Research Bureau of the People’s Bank of China (PBC). Wang Xiaoming, Head of the CCRC and Secretary of the CCRC Party Committee, chaired the opening ceremony.

In his address, Deputy Governor Pan spoke of emerging opportunities in the Mainland China credit reporting industry, and also touched on key policy directions for future development. In addition, he expressed his hopes of more opportunities to promote finance, economy and trade development between Mainland China, Hong Kong and Taiwan with cooperation in the area of credit reporting as a key bridge between the three.

Mr. Pan observed that the central government and society in general had attached great importance to the building of a robust social credit environment wherein the credit reporting system plays a significant role in boosting trade efficiency and productivity levels for a healthy economy and a harmonious society. As the building of social credit environment continued apace alongside the transformation of government functions, market demand for credit reporting products and services would increase exponentially. The development of Internet and Big Data technologies had lent strong support to the development of the credit reporting market, and also provided data processing approaches required for innovative credit reporting products and services. In face of these new opportunities, said Pan, it was important that the development of the credit reporting market in Mainland China be further enhanced so that a diversity of market needs vis-à-vis credit reporting products could be met.

To this end, there was a distinct need for the development of diversified credit reporting service providers and for stronger support of cross-region exchange and cooperation, said Pan. Further, the active application of new technologies as well as the integration and development of traditional and new credit reporting business models were also required. At the same time, the implementation of the Regulation n of the Credit Reporting Industry was critical to effective supervision and regulation, and also provided a blueprint for the orderly future development of credit reporting. Further, a system of standardised practices aimed at protecting the rights and interests of data subjects, including dispute resolution and a credit repair mechanism, was also needed in place.

According to Mr. Pan, increasingly close trade and economic ties between Mainland China, Hong Kong and Taiwan had paved the way for more mutual exchange and communication among credit reporting regulators and service providers. Such interaction, and further discussion on a cooperation framework between respective credit reporting service providers, would help further facilitate investment and trade between Mainland China, Hong Kong and Taiwan in what would be a win-win situation.

In the opinion of Chairman Hsu of the TABF, the credit reporting industry played a critical role in promoting economic and financial development as economic, trade and financial ties continue to deepen between Mainland China, Taiwan and Hong Kong. He expressed his hopes for enhanced communication within the region for cooperation that can further drive the industry forward.

Director-General Lu of the PBC Research Bureau suggested that the credit reporting industry would, at a certain stage, provide substantial support to the mainstream finance industry and even transform the industry. Such an impact is expected to manifest in three ways: i) transaction costs would become lower as the finance industry begins to valorise primary repayment sources over secondary ones (such as guarantees) thanks to access to real-time and reliable information; ii) access to reliable real-time availability of information may weaken the rigid barriers between equity financing and debt financing; and iii) there may be changes to the current model of credit reporting regulation as more financial institutions adopt broad-sweeping IT systems in these businesses and as new rules and regulations with regard to the management, control and use of information are needed.

Subjects covered at the seminar include the development of China’s financial market and credit reporting industry; the development and innovation of credit reporting products; protection of the rights and interests of data subjects; application of credit reporting information in anti-fraud and micro finance of commercial banks; SME credit reporting; the impact of Internet finance and Big Data on the credit reporting industry; and possible mechanisms of cooperation for the credit reporting industry in Mainland China, Hong Kong and Taiwan. These were covered fully by experts from the Development Research Centre of the State Council, the PBC, the International Finance Corporation of the World Bank; credit reporting service providers, commercial banks and other financial institutions in Mainland China, Hong Kong and Taiwan; and certain foreign credit bureaus; as well as scholars from universities, who also shared their experiences in these areas at the same time. More than 100 representatives from commercial banks, other financial institutions, credit reporting service providers and  in Mainland China, Hong Kong and Taiwan were in attendance at the seminar.