su ning : fostering modern credit culture in china speech by mr su ning, deputy governor of the people ’ s bank of china, at the international conference on “ public policy for credit reporting system ”, beijing, 28 september 2004. * * * ladies and gentlemen, i am very pleased to attend the international conference on “ public policy for credit reporting system : strengthening dialogue and cooperation between the government and the private sector ”. credit reporting system is essential to the modern financial system and plays a significant role in financial and economic development. in the recent 20 years, credit reporting system has received increased attention from the government and the private sector of all countries. this conference jointly sponsored by the world bank and the people ’ s bank of china ( pbc ) conforms to the needs of development of the credit reporting system in the world. the conference will not only enable participating countries to share the experience and lessons in their respective development but also strengthen dialogue and cooperation between the government and the private sector. i ’ d like to take this opportunity to talk briefly about evolution of credit culture in china. over thousands of years, the brilliant culture of the chinese people has nurtured the rich literature on credit culture. the confucian school attached great importance to the values of credit culture. for example, the analects of confucius stated in one chapter, if the common people lose confidence in the government, then the state will have no foundation for its existence. in another chapter, it wrote, if the government advocates credibility, it will gain confidence from the common people. the analects of confucius has touched on the credit culture in many other parts, e. g. the saying of “ if a person has no credibility, then he will not be appointed for posts ”, and that of “ a person shall insist on keeping his word and seeing his actions through to the end ”, etc. with the social and economic development, china ’ s credit culture has been confronted with unprecedented challenges. they are mainly reflected in two aspects. first, the foundation of china ’ s traditional credit culture lies in the mutual trust between individuals through contacts. ethics and the close relationship between individuals form the foundation of china ’ s traditional credit culture. such credit culture only meets the needs of economic activities within limited scope, and could no longer meet the needs when the scope for economic transactions has widened from a small community to the whole country or even the whole world. second, before the introduction of reform

with certain emission quota to relevant companies, and the companies can only emit greenhouse gas within their quotas. if a company wouldn ’ t meet the emission quota requirements, it could purchase extra emission quota from other companies that achieved good performance in greenhouse gas emission, or help developing countries to promote clean energy program as well as exchange for extra “ credit quota ” through planting trees. in china, we should learn from the international carbon trading mechanism to study the emission quota system and develop emission quota trading market. through price - discovery function of the financial markets, different economic entities can adjust their interests and fulfill the target of environment protection, energy conservation and reduction of pollutant emission. the emission quota trading system could also provide a new market - based compensation mechanism for the protective cultivation of farmland. in summary, financial institutions should fully recognize the importance and urgency of energy conservation and reduction of pollutant emission, take effective measures earnestly to promote the realization of targets set for energy conservation and reduction of pollutant emission in the 11th five - year plan period as well as a harmonious and sustainable economic and social development.