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Credit System Emphasized
The proposal of setting up an annual "Credit Day" on September 19 has been put forward, winning support from enterprises and individuals at the China National Forum On Credit Economy , according to today's China Daily.

The forum started yesterday and will run through tomorrow during the Second Beijing Chaoyang International Business Festival.

Credit crisis has become part of social life and economic activities in recent years. The manufacturing and selling of fake goods, contract swindles and loans remain incessant after repeated prohibition, the proposal says.

With China's entry into the World Trade Organization(WTO ), China's enterprises face more fierce competition and challenges.

However , Chinese enterprises are at a disadvantage due to a far from perfect credit system, Sun Fuling , vice-chairman of the Chinese People's Political Consultative Conference, said.

He insists that cash transactions remain dominant in commercial and trade activities.

Transactions that are paid for on credit account for only 20 per cent of the total, while in Western countries 90 per cent of transactions are paid for on credit.

Furthermore the method of paying for business supplies in cash might seriously impede the expansion of trade and business development.

Compared with developed countries , few Chinese enterprises have managed to set up mature credit management systems

However , the ratio of the Chinese enterprises that have bad loans, that cannot repay their loans due to poor business performance, is up to 30 per cent, much higher than the 0.25-0.5 per cent in other countries.

The national economy and certain enterprises have suffered great loss as a result.

(Xinhua News Agency 09/20/2001)

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