Attachment I:  Press Conference of Enterprises’ International Credit Rating and Promotion

5.  International Credit, Lifeline of Enterprises, Resource of Development

Dear President Maolin, President David Emery,

ladies, gentlemen and friends,

I am very pleased to attend this press conference and eagerly expect that International Credit Enterprises of China can better participate in the international market competition. The Enterprises International Credit Rating and Promotion Campaign will definitely bring inexhaustible life resources to Chinese enterprises.

Credit is the footstone of the market economy.

Credit is based on morality. It is the guarantee for survival and development of Chinese enterprises.

Credit is the first element of an enterprise’s core competitiveness. It is an invisible asset that can be discounted at any moment, same as the enterprise’s brand. The enterprises entitled with ‘International Credit enterprise’ will be invincible in the global market competition.

However, the lack of credibility in some industries is rather severe. Debt collection, debt evasion, triangle debt, manufacturing and selling fake products, fraud, breach of contract, bluff and deceiving, etc. have caused enormous damages to individual, enterprises and the country. Such jeopardization is enlarging due to the increase of the trading cost and the opportunity cost. It is estimated that the loss suffered by Chinese enterprises in their market trading has made up 20 percent of our country’s gross domestic product due to the lack of credibility and violation of economic order. The direct and indirect economic loss totals about 600 billion which is equivalent to 20 percent of China’s financial revenue each year. The rate of execution of enterprises’ contracts is only 30 percent. The situation of enterprises in arrears is very serious. Statistics shows that there are 170,000 enterprises whose amount of receivables that haven’t been collected occupies 38 percent of their sales revenue and is 9 times of their total profit, reaching 1.5 trillion yuan. Therefore, the additional financial cost is 200 billion yuan each year. These enterprises have to pay in addition 900 million yuan interest each year. The bad debt ratio of some enterprises exceed 40 percent. The problem of credit has directly affected the survival and development of Chinese enterprises and has badly restricted the development of the national economy.

The situation is serious, but the hope is tremendous. Our party and our government have always attached great importance to the construction of credit. Especially in recent years, the credit construction of enterprises is required at an unprecedented stature. Under such situation, China International Institute of Multinational Corporations, along with D & B Corporation, the biggest global credit rating organization, has timely launched the ‘Enterprises International Credit Rating and Promotion. We hope that launch of this activity is of scientic criterion, equity and justness and probability to stand trials of market and time, like President Maolin and President David Emory have mentioned, and will therefore form a good circulation for the credit system of China enterprises. This will forever put an end to the phenomenon that people of credit are cheated from time to time while people without credit escape punishment.  

Credit construction is not only the work and responsibility of the rating organizers, but also the first responsibility of enterprises and the resource of enterprises’ survival and development. ‘For merchant, no honesty, no thriving, for business, no credit, no prospering’. Under the condition of market economy, any enterprise can not exist in isolation, but has to rely on credit to cooperate with other mainstay economies. Only there is cooperation, there is circulation. Only there is circulation, there is survival and development. Zhonghuan Group always attaches importance to credit construction. We believe that we are an eligible credit enterprise. We would like to take this opportunity to declare that we will sign up and join this campaign at once, in order to grow bigger  in ‘bringing in’ and ‘going out’ and take our responsibilities for the country, society and people. We are confident to be in the first batch of ‘International Credit Enterprises’. We will keep this title permanently in the future and establish the image of our enterprise in the world. Hereby we would like to suggest:

Do it from myself, be honest and creditable to build enterprise credit at a high jumping-off point with the international credit standards.

Government, enterprises, individuals and society work together to build a credit society and form the benign circulation of society’s credit.

We are full of confidence for the future! 

Thank you.

(Speech at the press conference by He Xiaoming, President of Zhonghuan Group )

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