Building a Credit Culture in China

This Financial Insights NewsFlash discusses the recent steps China has taken to create a credit culture and instill the notion of "risk" into lending decisions. On the back of massive projects to create individual and corporate credit information systems, the country is putting in place the infrastructure necessary to assess the creditworthiness of borrowers. This is critically important because lenders have traditionally lacked the necessary skills or systems to lend prudently. The goal is to support rapid credit growth but also to avoid the creation of new nonperforming loans, which could destabilize the economy.