Shaanxi in northwest China, is conducting a pilot project for the establishment of a standard social credit system.

Liu Xiaoyan, deputy secretary-general of the provincial government, said its national standards committee is determined to see Shaanxi as the first province to establish such a system with support from the State Development Bank.

Shaanxi signed a cooperation agreement with the bank on Wednesday, Liu said.

"The dishonesty that exists today not only increases the cost of trade and reduces economic efficiency, but also undermines the morale of society, and affects our external image and competitiveness," Liu said.

The provincial Party secretary, Zhao Leji, said: "We will strive for 10 years to basically establish a moral and credible foundation for our society."

Chen Yuan, president of the State Development Bank, said the bank cooperation with the province will be long-term, and joint efforts will be made to build Shaanxi's credit system.

Huang Saimeng, deputy director of the Shaanxi Provincial Development and Reform Committee, said departments and bureaus concerned have made great efforts and have laid a good foundation for the establishment of a credit system.

"A Credit Shaanxi website has been established with the joint-efforts of more than 40 governmental departments and bureaus. It will provide information about credit issuance and other services," Huang said.

The Xi'an branch of the People's Bank of China has built a system for individuals and firms seeking credit information.

Local administrations of industry and commerce, taxation, quality inspection, food, and medicine, have also built or are building their own credit databases, Huang said.

"At present, our province's social credit system is still in the initial stages, management agencies are inadequate, local matching legislation is incomplete, we lack a credit information sharing mechanism, and monitoring and punishing dishonesty is ineffective," Huang said.

The social credit system will encompass a series of laws, rules and regulations, organizations and their regulatory structures, and tools for information collection and disclosure.

This is essential to maintaining social and economic stability, Zhang Baotong, a social and economic development expert, said.

(China Daily July 20, 2007)