![]() : 18 In late January 2000, the State Council released an essay by Zhu in which Zhu stated that China must "vigorously rectify social credit." : 18 In March 2000, Zhu delivered the government's work report to the National People's Congress, in which Zhu talked about the need to rectify social credit in the context of supervision of financial institutions, fraud, tax evasion, and debt repayments. : 18 Premier Zhu approved the text and instructed government figures from ten ministries and commissions to begin studying the creation of a social credit management system. : 18 Among these academics was Lin Junyue, who became an important intellectual figure in the development of social credit. In January 2000, the research group from the Chinese Academy of Social Sciences compiled their research into a text titled National Credit Management System. ![]() ![]() : 18 In the United States, the research group studied and prepared translations of 17 American credit reporting laws, including the Fair Credit Reporting Act. : 18 Huang contributed more than RMB 300,000 to fund the research initiative and sponsored fieldwork in the United States and Europe. : 18 In September 1999, the Institute of Economics of the Chinese Academy of Social Sciences began a research project on establishing a national credit management system. : 17 Huang sent her report to Premier Zhu Rongji, who approved it and in August 1999 ordered the People's Bank of China to take immediate action. : 17-18 At the time, credit management and rating were largely unfamiliar concepts within the Chinese economy. In 1999, businesswoman Huang Wenyun wrote a report following her negative experiences with domestic business trustworthiness and her research into credit management in the United States business environment. The credit system aims to facilitate financial assessment in rural areas, where individuals and small business entities often lacked financial documents. The origin of the Social Credit System can be traced back to the early 1990s as part of attempts to develop personal banking and financial credit rating systems in China, and was inspired by Western commercial credit systems like FICO, Equifax, and TransUnion. Jeremy Daum, a Senior Fellow of the Yale Law School Paul Tsai China Center, who has studied social credit system for a number of years, said such misunderstandings are frequently propagated by western media, and explains that the system's "intended effect is actually primarily for "deregulation and reducing corporate malfeasance". However such a concept is not rooted in reality as the program is instead mainly focused on businesses and is very fragmented. One of the popular misconceptions is that the Social Credit System involves China giving every citizen a “score" based on what they did right and wrong, and then punishing those who have low scores. There has been a history of misreporting and speculative misconceptions in English-language mass media due to translation errors, sensationalism, conflicting information and lack of comprehensive analysis. The Chinese government's stated aim is to enhance trust in society with the system and regulate businesses in areas such as food safety, intellectual property theft and financial fraud. Managed by the National Development and Reform Commission (NDRC), the People's Bank of China (PBOC) and Supreme People's Court (SPC), the system was intended to standardize the credit rating function and perform financial and social assessment for businesses, government institutions, individuals and non-government organizations. The Social Credit System is an extension to the existing legal and financial credit rating system in China. It was first introduced formally by then Chinese Premier Wen Jiabao on 20 October 2011, during one of the State Council Meetings. The program initiated regional trials in 2009, before launching a national pilot with eight credit scoring firms in 2014. The program first emerged in the early 2000s, inspired by the credit scoring systems in other countries. The origin of the system can be traced back to the 1980s when the Chinese government attempted to develop a personal banking and financial credit rating system, especially for rural individuals and small businesses who lacked documented records. There are multiple, different forms of the social credit system being experimented with, while the national regulatory method is based on whitelisting (termed redlisting) and blacklisting. The social credit initiative calls for the establishment of a record system so that businesses, individuals and government institutions can be tracked and evaluated for trustworthiness. The Social Credit System ( Chinese: 社会信用体系 pinyin: shèhuì xìnyòng tǐxì) is a national credit rating and blacklist being developed by the government of the People's Republic of China.
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