Enterprise Credit Construction and Laws, Rules and Regulations
Economic globalization has become the irresistible objective trend of the world economic development. It brings almost all the countries into the world economic running system. Under this situation, the credibility of the enterprise has been the “bottleneck” which restricts of our national economic development. If losing credit support, no enterprise can participate in the international competition, let alone integrating into the world economy. It is not only necessary for the development of enterprises but also an objective requirement of China’s economic development to launch the Enterprise International Credit Rating and Promotion.
I、ROMAN I. Perfecting the Laws, Rules and Regulations on Credit Issue
The enterprise credit construction of can not only help the enterprise as market entity realize the importance of the business credit and credit right as to favor the faith keeper and let the faith breaker undertake legal and moral responsibility. There should be some relevant laws, rules and regulations as guarantee to punish the breaking faith behaviors after exposure. It is an important and indispensable part of the credit construction.
At present, due to the non standardization of the market order and economic order in our country, in many areas exists the artificial advertisements, the price misleading, the copyrights pirate, the willful illegal action, loan default, tax evasion and cheating, smuggling and obtaining foreign currency under false pretenses, and other illegal actions. All these actions are related to the indifference to and losing of credit conception, the lag of laws, rules and regulations. These actions have caused damage of thousands and millions yuan to economic development each year which is incalculable immaterial loss. If left to be developed, it will destroy the normal market economic order, stunt the development of enterprises and have bad influence on the sustainable development of the national economy. For credit construction, we should perfect laws, rules and regulations as well as strengthen the guarantee function of law system for credit.
Therefore, the 16th Party Congress proposed the strategic task of “rectification and standardization of market economic order and establishment of the perfect social credit system under market economy”. The Third Plenary Session of the 16th CPC Central Committee further indicated that “to shape a social credit system with morality as support, property right as foundation, law as guarantee is a necessary condition for building up the modern market system and also a principal strategy for standardization of market economic order”. Premier Wen Jiabao writes in Report on Social Credit System Construction in Shanghai: Credit construction covers every social and economic field. It is a comprehensive system which related to law, system, morality, management, service, information, etc. It requires gradual popularization from the credit construction of key industries, organizations and enterprises. It also requires the close cooperation between related governmental departments and social organizations. Related rules and regulations needs to be gradually established and improved.” Law is the most important and basic rule and guarantee. We should not only talk on morality as guarantee for credit. We should legally punish those actions without morality and business credit at all. Article 6 prescribes in The Contract Law of the People’s Republic of China: “The parties must act in accordance with the principle of good faith, no matter in exercising rights or in performing obligations.” Article 42 prescribes that the party is liable for damages if it performs acts which violate the principle of good faith in the conclusion of a contract. There are more punishment provisions on action of breaking faith such as transferring assets for debt evasion, disclosing other parties’ business secrets after fulfillment of the contract, etc. However, it is far more than enough to have principle regulations on credit. The abidance of business credit would only be acknowledged and protected by raising credit guarantee to legal level, not only stay at the level of public supervision. Some countries have written the business credit right into law. Article 824 prescribes in German Civil Code: “A person who declares or publishes, contrary to the truth, a statement which is likely to endanger the credit of another, or to injure his earnings or prosperity in any other manner, shall compensate the other for any damage arising therefrom, even if he does not know of its untruth, but should know of it.” This clause has take credit right as an independent right for confirmation and protection. At present, although our county has Copyright Law, Trademark Law, Exclusive Law, which acknowledge and protect these invisible property right and civil right party can find appropriate law basis against tort, the laws, rules and regulations on business credit in our country has not been perfect yet and in credit information consistency of market entities exists the problems of imperfect legislation and supervision vacuum. People often establish business credit on morality and conscience, which only guaranteed by the public voice and use “gentleman’s agreement” instead of institutional rules. Therefore, it should legalize and specify the publicity of credit information, personal privacy and protection of business secret, the confirmation and protection of credit right, and the punishment for assaulting business credit right. It plays a very important role in institutionalization and legalization of business credit, protection of credit entities and preventing the lack of business credit. It is good for maintaining the normal economic and social order and being accordance with the basic requirements for civil virtues.
Ⅱ、Strengthen the Implementation of the Credit Law
When the law system is established, the implementation should be strengthened to increase the cost due to breaking faith.
The law does not give the action of breaking faith severe punishment, which indirectly encourages people to abandon credit for the interest and foster the overspread of the social ethos of breaking faith. Thus, the role of punishment takes no effect. In developed countries, the compensation liability of the civil party due to tort by breaking faith is rather severe. We should borrow the tricks from these countries, strengthen the implementation of the breaking faith party, and define its compensation liability, even punitive compensation to increase the cost of breaking faith so that the faith breakers are not worth the candle. At the mean time, to properly adjust the lawsuit and arbitration proceeding so that the sanction on breaking faith behaviors can take effect timely. Facilitated by related law system, the business credit disclosure and business credit supervision should be established. Therefore, Enterprises International Credit Rating and Promotion has adopted the appraisal process of social announcement, enterprises appeal and regular management system of appraising faith keeping and punishing faith breaking.
Ⅲ、Perfect Credit Agency and Service System
As the business running organization, credit agency is the indispensable part of the credit society as well as the core content of the credit construction: a. in accordance with the orientation of “perfect rules and legislations, running license, business running, professional service”, we need to speed up the build-up of the credit agency service system and actively cultivate credit service demanding, including organizations of credit, rating, guarantee, business account collection, factoring, etc, especially developing the credit organizations and rating organizations; b. to establish credit service system, such as constituting Enterprise Credit Management Law and Personal Credit Management Law which standardize the behavior of credit service organization; c. to establish the information identification standard, information classification standard and data format coding standard and security standard, etc, to realize the standardization of credit service industry. We have established citizen ID management system and corporation code management on whose base we could establish citizen social code and corporation code management. To adapt to the need of the international competition, we are planning to bring this kind of code into the D&B code system for bringing into the related information on business credit and for unified management. Through this process, the information of the corporations and individuals with no business credit thus can be publicized.
Agency as a consultant has the responsibility for its correctness after credit reporting. It is liable for any damage to the clients’ economic loss by false report, which brings a restriction system for the truthfulness of the information. In addition, civil chambers, associations are liable for their own business credit supervision.
Under the situation of market economy, business credit as an invisible asset is the important meaning of the good social image for individuals and enterprises and also the constituent of the core competitiveness. In the process of market standardization, enterprises with good business credit win out when enterprises with bad business credit are washed out, which is the important rule and inevitable result of free competition.
Ⅳ、 Strengthen the enterprise internal credit establishment
It should be regarded as a legislation system establishment to strengthen the enterprise internal credit self-establishment. There are a lot of aspects without criterion either in the enterprises establishment area or in actual operation area because of uncompleted market system in our country. Now the forms of enterprises exist in our country including individual enterprise, partnership enterprise, corporation limited, joint-stock corporation limited and foreign invested enterprise, etc. Enterprises of different types usually operate out of rules during production and management, because it is lack of corresponding criterion. So other than further completing the Company Law in the legislation aspect, it should be more standardized in the aspect of enterprises forms and more reasonable in the aspect of operation to reduce the possibility of illegality and discredit.
In the “5C”, enterprises character is the key point. That means enterprises ethic, morality, behavior and style, which is shaped in the management activities by enterprises and administrators. It decides an enterprise’s credit to a large extent. Market economy needs not only maintenance from legal system, but also support from economy ethic. Establishing good market order is not possible if any one of them is absent. Laws and regulations are the authority backbone and ethic is the spiritual backbone for contract fulfillment. It will be hard to fulfill contract if market economy is lack of credit system and transaction cost would be high enough to prevent the steps of both transaction parties. So the final competition power of an enterprise depends on how to make the best choice in a series of values. Common value—the faith of credit is the power source of enterprises competition.
At the same time, we should build up correct enterprises ethic and enterprises culture, put more emphasis to the establishment of enterprises commercial credit system, establish and strengthen commercial credit consciousness of enterprises administer and manager of the entire society. More attention should be paid to the establishment of the ethic and the legislation with combined rights and obligations. Every enterprise should do it from itself and participate in the project of maintaining a fair order of market economy competition.
Enterprises credit has been the focus concerned by the entire society these days. It widely impulses and influences upon the whole society in our country because of losing enterprises credit. We must build up an enterprises credit system according to the situation of our country. The establishment of enterprises credit system should be legalization and systematism. Only with the guard of credit system, can we stand invincibly in the global economy competition.
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