China's Credit Environment Improved: Official

China's central bank says the country's credit environment has been improved because a credit information database is in place.

A senior official with the People's Bank of China says the bank wants to expand the use of the database to reduce credit risks and strengthen commercial security.

Put into full operation nationwide from January 1st, 2006, China's credit information database covers 570 million individuals and 12 million businesses. It could be accessed free of charge from 200,000 terminals.

Those terminals were spread in China's financial institutions, including commercial banks, non-banking financial agencies, rural credit cooperatives and institutions managing public housing funds.

The database contained the details and addresses of individuals and their payment defaults on mortgage loans, social security funds, public housing funds and bills for mobile and land-line phones.

The vice governor of People's Bank of China, Su Ning says that the establishment of such a database has at least yielded three good results.

"First of all, it contributes to the expansion of credit loans. Before 2006, commercial banks usually provided individuals with only mortgage loans rather than credit loans. Secondly, the credit risks of commercial banks are reduced, as the database can easily track the loaning records of enterprises and individuals. Thirdly, the general public's credit awareness has been strengthened."

The official says that the central bank has been collecting more financial information through collaboration with other agencies to complete the database.

"In the last two years, the bank has been in talks with the State Environmental Protection Administration, the General Administration of Quality Supervision and Inspection and the Supreme Court of China, about increasing the range of the database through tracking tax payments and civil compensation."

Linked with the information system of the Public Security Ministry, the official says the database could also help financial institutions detect those who used fake identities to cheat on loans.