Launched earlier this year, China’s social credit system has provoked widespread reactions and is fast becoming a seminal piece of China’s business proceedings.
Thus, understanding this controversial system is crucial for companies and business owners operating in the Chinese market. But unfortunately, this isn’t the case. A recent study surveying 197 European companies active in China proved that over 60% of respondents did not have any perceptions or understanding of the system as of yet.
In Mid-October we held PTL Group’s annual China Business Club meeting. Our UK Lead, Dor Barak, picked apart the Social Credit System and provided insights into the following topics:
- What China’s Social Credit System actually is
- The rationale behind the system
- The ‘Master Database’
- The Black & Red lists
- The system’s Rewards & Punishment mechanisms
- Some potential positives from the Social Credit System
- How to do business in China alongside this system
Dor also explained the practical implications that the system might have on foreign companies that are considering embarking on a China market entry project.
His talk and presentation “China’s Social Credit System – Explained” are now available to watch:
The main takeaway from all of this is that China’s Social Credit System is here to stay. And despite the natural uneasiness that may come with it, it should not deter foreign companies from starting a business in China. The idea here is to strive to get the most out of this system rather than to ignore and potentially lose out.
