China's Financial Opening Up: PBOC accepts Experian application

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03:20

Credit rating -- while a smaller part of the financial space, is a powerful tool in consumer finance. The Chinese government has been very tight in controlling credit bureaus in the past--but that's about to change. Zheng Junfeng reports.

International credit reporting giant Experian applied to the People's Bank of China for permission to operate its corporate credit business in China. And the central bank has accepted the application signifying another step in China's financial opening-up. A leading Chinese credit information company China Chengxin says it welcomes the company that serves over 200 millions customers in the U.S.

ZHANG BIN, CHAIRMAN & CEO "That's a good thing to help Chinese business partners, even competitors to learn from each other and to collaborate with each other, because the current financial system, not only domestic but international, has become an ecosystem."

Chinese central bank governor Yi Gang at last month's Boao Forum For Asia reiterated the central bank's 2016 decision to offer national treatment for overseas credit reporting agencies. Credit reporting agencies use data analysis to help lenders manage risks and borrowers get credit. Industry investors think credit reporting is far from reaching its market demand in China.

SELINA XU, PARTNER "We know a lot of US credit industry players like Experian, TransUnion and FICO Scores. In China, the credit score market is not that big yet. But it has great potential to have great development. "

China incorporated its first unified, private credit scoring company, Baihang Credit Scoring, on May 23rd. The move appears to be part of China's push to develop its own Experian. China Chengxin is a shareholder of Baihang and focuses on the application of AI.

SELINA XU, PARTNER "They have a strong technology background. In this industry, technology is very important. You use AI to collect, study and screen data. So technology is our main point to make our investment."

China has opened the corporate credit reporting sector to foreign companies, but not personal credit reporting. However, China Chengxin says that even the personal credit reporting market is open and it's ready for the competition.

ZHANG BIN, CHAIRMAN & CEO "We have a strong and deep understanding of customer behavior. We are very confident that during the long-term competition, we will know our customers better, a better KYC you know."

ZHENG JUNFENG "A modern financial system has to be based upon a sound and effective social credit system that would reward honesty and compliance as well as punish dishonesty and misconduct. China welcomes international experience and investment in establishing its own social credit system. Zheng Junfeng, CGTN, Beijing."