CRI听力:Experts: Rule of Law Crucial for A Social Credit System

China's rapid economic growth is praiseworthy, but a lack of trust remains a problem according to the State Council.

In a recent statement the State Council admitted behaviors undermining trust, such as business fraud and the sale of fake products, are rampant in many sectors.

Du Lichun, an economics professor at Peking University, says such lack of credibility presents a serious risk for the sustainable development of the Chinese economy.

"The market economy is a credit economy, which in turn is based on contracts. Only when all the economic agents observe the contracts, can the market operate effectively."

One of the most notable examples of this lack of trust was the tainted milk scandal in 2008.

Six babies died and hundreds of thousands fell ill by drinking a tainted milk formula, supplied by Sanlu Group, which was at that time a major player in China's dairy industry.

The company was reportedly aware of the problem for months, yet claimed the contaminant came from milk suppliers.

Now, the State Council says it aims to set up over the next five years a nationwide system to keep record of business behaviors of corporations and individuals.

Industrial management will then be partly based on their credibility to promote a healthy market order.

Liu Baocheng, a business ethics researcher with the University of International Business and Economics, says the government should try to improve its own credibility by promoting the rule of law.

"If there's no comprehensive legal system, relying solely on morality to cultivate business credibility is useless in a market economy. In particular, during the process of law enforcement, the government should first abide by the law, increase its transparency and then punish law-or-contract-breakers in an effective and fair manner."

Analysts point out that the law enforcement of some government agencies is often plagued by cronyism or even corruption.

Liu Baocheng calls on the government to make greater efforts to create a fair and transparent legal environment, which is the basis of enterprises' and citizens' credibility.

For CRI, I'm Wei Tong.