Companies Urged to Honor ContractsThe Chinese Government is urging domestic companies to honor contracts and abide by international practices.About 10,500 companies have been appraised as enterprises with high credit rating and sound record of honoring contracts, according to latest statistics from the State Administration for Industry and Commerce (SAIC). The enterprises have been awarded certificates by SAIC. The surge in the number of 'honest' enterprises is due to the Chinese Government's efforts to encourage honest conduct and to abide to market order in the face of the challenges of globalization. As China has improved its market operation system amid intensifying competition and with the approaching of its entering the World Trade Organization (WTO), Chinese companies are increasingly focusing on credit rating and fulfillment of contracts. As a result, the good corporate image has brought about economic returns to these companies. "We regard the credit rating of a company as important as its assets and management," a director of Shanghai Baoshan Steel Co. Ltd. said. "The companies that always honor contracts can easily win trust from foreign partners and sign new contracts in competition with others," said Li Xiaokuan, deputy director of the Department of Market Regulation of SAIC. Local experts pointed out that the market economy is definitely based on credit. Therefore, the practice of contract fulfillment has significant bearing on the potential for expansion among Chinese companies and on China's international image. The Chinese government will take further action to promote honest conduct among companies, including lowering banking interest rates for companies with high credit. |
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