China's corporate credit reporting system: A comparison with the United States and Germany

Abstract

Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community.

Information Governance — a Missing Dimension in the Varieties of Capitalism Framework

“…One of the main goals of this system has been to set up central state-run databases that consolidate a large set of information on companies, other organizations, and individuals from different administrative departments on the local and national levels (State Council China, 2014;Meissner, 2017). Through this measure, the Chinese Party-state has gained sovereignty over data and centrality in the information infrastructure, which allows the government to proactively control which type of information is collected as well as publicly released (Krause et al, 2022). Another example of the strong role of the state in the Chinese information infrastructure is the topic of data protection.…”

“…Second, the Chinese state uses available company information in excessive ways (Krause et al, 2022). The government has acknowledged the importance of data for businesses and the economy by labeling it as a production factor as early as 2020 (CCCPC and State Council, 2020a).…”

“…Third, transparency levels of corporate information in China are high (Krause et al, 2022): While public corporate information platforms provide small amounts of information, the transparency levels of privately run information platforms are very high. The privately run platforms, such as Qichacha and Tianyancha, provide general information on a company as well as nancial information, whereas the public databases, e.g., Credit China and the National Enterprise Credit Information Publicity System, focus on data related to legal enforcement (Krause et al, 2022). This indicates that information disclosure is promoted as an important means to reduce transaction costs in business in a country with a comparably weak legal and enforcement system to China (Krause and Fischer, 2020).…”

“…And indeed, the analysis shows that companies in China aim to leverage information governance in all three areas that were outlined in Section 2.2 as elds for competitive advantages through information governance: innovations, e ciency gains, and better decision-making. With regard to innovation, the Chinese information structure with limited data protection makes data a valuable, yet relatively cheap resource that can be used multiple times (Krause et al, 2022). Hence, companies in China can apply big data for innovation at lower costs and with greater exibility.…”

“…Speci cally, the setup of China's information infrastructure and consequent responses by businesses in their approach to information governance resemble neither the LME model due to the strong role of the state in guiding the economy, nor the CME model given the strong emphasis on market forces and competition. For instance, the level of state dominance and centralization in the information infrastructure is signi cantly lower in LMEs (e.g., in the US, where private actors dominate) and CMEs (e.g., in Germany, where both public and private actors are involved) (Krause et al, 2022, Miller, 2000. This paper is not going to dive into the discussion on the categorization of the Chinese political economy in depth.…”