Coronavirus and the Corporate Social Credit System: A Two-Way Link
China’s Corporate Social Credit System (CSCS) is expected to be fully implemented in China by end of 2020. A company’s score is based on more than 30 criteria rated by different local authorities, including: China Customs, State Administration of Tax, Administration of Market Regulation, Ministry of Human Resources and Social Security, State Administration of Foreign Exchange.
>> Read our explainer: The Corporate Social Credit System in 10 Q&A
We have helped multiple clients assess their CSCS scope, identify and address risks, conduct informative/training sessions, and jointly establish a roadmap towards CSCS-readiness.
Now, many of them are asking: how will the coronavirus outbreak affect our scores? Will it delay the implementation of the CSCS?
What we are seeing on the ground is that authorities are going ahead with the CSCS rollout, and even putting the rating framework into practice to decide who gets more funding to fight the epidemic.
Coronavirus and CSCS: A Two-Way Link
Government authorities have issued strict epidemic prevention rules. Adhering – or not – to these guidelines can affect a company’s CSCS score, e.g. via HR-related criteria.
More often, though, what we have seen is a positive linkage between virus-related guidelines and the CSCS. Companies who follow these new policies closely are eligible to enjoy certain government incentives, including relief measures (tax and social contribution waivers) and rewards (e.g. subsidies).
As an integral part of our CSCS projects, we are now also helping clients comply with virus-related guidelines, while leveraging their good track records to access valuable government incentives.
>> Request Service Flyer: Keeping a High Corporate Social Credit Score
In February, two of our outsourced finance and accounting clients in China received government subsidies for epidemic prevention, after local authorities used “big data” to select the SMEs with good tax records.
Reach out to us if you’d like to know more about these case studies and discuss how we could support you.