How China’s debtors are treated
With an estimated 8.8 million debtors in its midst, China is taking drastic measures in attempt to make people repay their debts. In late 2013, the Supreme People’s Court – the country’s highest court – introduced a public blacklist site that ‘shames’ debt-defaulters by both name and ID number.
‘Named and shamed’
Brought in ‘in an attempt to make people comply with verdicts to repay their debts’, the site launched with 31,259 names and has since grown to 8.8 million.
The controversial system also places restrictions on these individuals. Through their ID numbers, the government bans them from flying domestically, from using high-speed trains and from enrolling their children at expensive private schools. Debtors also cannot stay at hotels rated 3-stars and above, are charged higher fees when booking cars and face ‘tougher’ exams when joining the civil services.
In theory, these restrictions aim to curb high-expenditure consumption and spending deemed unnecessary to sustain a ‘normal life of business’.
“It is hoped that by imposing such inconveniences on their daily lives, debtors will be encouraged to pay back the money they owe in a timely manner,” the court said in its statement earlier this year.
The listed debtors have, altogether, been prevented from flying 8.7 million times and denied from using 3.4 high-speed train tickets.
What are the effects?
The Supreme People’s Court noted at the end of 2017 that the list has led to more than 1 million court orders being voluntarily carried out –one positive outcome from the scheme.
Debt defaulters can expect to have their current and future job prospects limited: major employers check the creditworthiness of applicants – the website is referred to in this process – and it is estimated that around 170,000 on the list have consequently been denied employment.
Since the list was created, China has reported plans to create a country-wide social credit score system that will be rolled out in 2020. The lower the credit score, the fewer opportunities available to that individual.
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