From borrowing books from public libraries to borrowing bank loans, personal andenterprise credit records have been increasingly valued in China.

The first demonstration zone of social credit system in China, aimed to promote benefits ofgood credit, is planned for the Yangtze River Delta region, encompassing ShanghaiMunicipality, Jiangsu, Anhui and Zhejiang provinces.

The national pilot plan approved by the National Development and Reform Commission isexpected to help nurture a sound business and social environment in the region andregulate individual behavior based on credit records.

Under the system, trustworthy entrepreneurs and individuals will be rewarded, whileinfringers will be discredited.

The Yangtze River Delta region has benefitted from growth in enterprise credit andintellectual property rights (IPR) protection.

Since 2015, provincial-level governments have launched joint campaigns against cross-region and cross-industry IPR infringement and counterfeits.

By using big data, public security departments in the region have been able to worktogether on Internet business fraud.

Cases of infringement and counterfeit in the region are listed via the government, with detailed information open for examination.

“A collaboration on cracking down on fake and shoddy goods has helped mitigate barriersof local protectionism,” said Lin Haihan, who is in charge of the trademark division inShanghai Administration for Industry and Commerce.

In the tourist sector, an online tourist information center was launched on a test run inNovember, to give updates of bad records of tourist agencies.

Jin Xingming, deputy secretary general of Shanghai municipal government, said theunified credit system of the tourist market in the delta region is a “breakthrough” in thelinkage of the overall credit system.

“The credit system can deliver market-oriented penalties through blacklisting discreditedentrepreneurs. The system can join the efforts of social, government and marketsupervision,” said Jin.

Zhao Qiang, an entrepreneur from Anhui Province, had a taste of the benefits in 2016. Theentrepreneur needed only three days to borrow 7 million yuan (about 1 million U.Sdollars) from the Lai’an Rural Commercial Bank, when his stationery manufacturingcompany was in urgent need of cash.

The bank said the swift loan approval was due to Zhao’s credit rating.

In Shanghai, citizens with good social credit now can get a “credit card” in ShanghaiLibrary and borrow books for free.

However, the phenomenon still lack regulation. Without a transparent social creditsystem, rewards and penalties can not be given fairly.

“The social credit system pilot should break up small-scale credit reward and punishmentinitiatives in different cities, and provide a systematic and unified measure, which can beextended to a national practice,” said Wang Ningjiang, director of the Zhejiang ProvincialCredit Center.

He said the pilot should prioritize blacklisting firms with bad records for causingenvironmental damage or food safety problems.