Laily UPN
The National Development and Reform Commission (NDRC) and the People’s Bank of China (PBOC), in collaboration with the member units of the State Council’s Interdepartmental Conference on the Establishment of a Social Credit System, have officially released the 2026 Edition of the National List of Basic Penalty Measures for Untrustworthiness. This comprehensive regulatory framework represents the latest evolution in China’s ongoing efforts to institutionalize a social credit system characterized by high-quality development, legal standardization, and the protection of the lawful rights and interests of credit subjects. By delineating the boundaries of state power in the realm of credit-based punishments, the 2026 List serves as a definitive guide for administrative, judicial, and market-based enforcement against entities and individuals deemed untrustworthy under Chinese law.
The Framework of Standardized Punishment
The 2026 List defines "penalties for untrustworthiness" as activities carried out by state organs and organizations authorized by law to manage public affairs—hereafter referred to as "public management bodies"—as well as other organizations utilizing judicial, administrative, or market-based tactics to penalize entities responsible for untrustworthy behavior. A central tenet of the new edition is the strict adherence to the principle of "legality." Public management bodies are explicitly prohibited from employing penalty measures that reduce the rights of subjects or increase their obligations beyond the scope delineated in the list, unless otherwise provided for by specific national laws or State Council policy documents.
The penalty measures are organized into fourteen items across three primary categories. The first category involves measures that directly impact a subject’s rights or obligations, such as market or sector entry prohibitions, occupational restrictions, spending limitations, and restrictions on exiting the country or advancing academically. The second category covers measures necessary for the performance of duties by public bodies that do not technically reduce rights, such as restricting applications for government funding, participation in award selections, or inclusion in key regulatory oversight. The third category encompasses actions by non-public bodies, including the inclusion of negative information in credit reporting or rating reports.
Historical Context and Evolution of the Social Credit System
The release of the 2026 Edition marks more than a decade of development for China’s social credit infrastructure. The journey began in earnest with the "Planning Outline for the Construction of a Social Credit System (2014–2020)," which sought to improve sincerity in government affairs, commercial integrity, social sincerity, and judicial credibility. Initially, the system faced international scrutiny for its potential for broad, non-legal punishments. However, since 2020, the Chinese government has pivoted toward a "rule of law" approach, focusing on standardizing the "blacklists" and ensuring that every punishment has a clear basis in administrative or criminal law.
In 2016, the State Council issued "Guiding Opinions on Further Improving Systems for Restraining the Untrustworthy," which introduced the concept of "joint punishment" (lianhe chengjie). This allowed different departments to share credit information and apply sanctions across sectors—for instance, a tax violator might be barred from bidding on construction projects. The 2026 List refines these mechanisms to prevent "over-punishment" and ensures that the severity of the penalty is proportional to the untrustworthy act.
Market and Sector Entry Prohibitions
A significant portion of the 2026 List is dedicated to expelling untrustworthy actors from specific markets or sectors. Under the Administrative Licensing Law, applicants who conceal information or provide false materials for licenses related to public safety, health, or property security face immediate prohibitions. In the realm of public infrastructure, the Bidding and Tendering Law provides the basis for canceling bidding credentials for entities involved in collusion, bribery, or contract fraud.
The 2026 Edition places a heightened emphasis on foreign trade and customs. Entities found violating the Export Control Law or the Customs Law may be prohibited from engaging in foreign trade or customs declaration activities for set periods. This is particularly relevant for "consignees and consignors" who offer bribes to customs officials or engage in smuggling. Furthermore, the list targets the financial sector, preventing individuals with major records of violations from becoming major shareholders in credit reporting establishments or trading in national securities venues and futures exchanges.
Professional Bans and Occupational Restrictions
The 2026 Edition continues to strengthen professional bans for individuals in positions of public trust. Under Article 37-1 of the Criminal Law, persons who use their positions to commit crimes may be prohibited by a court from engaging in related professions. This extends to the production safety industry, where staff of business units who exhibit dishonest conduct can face lifetime bans from the industry.
In the education sector, the Teachers Law and the Private Education Promotion Law provide the legal basis for prohibiting individuals from obtaining teaching credentials or operating private schools if they have a history of criminal punishment or have committed acts that cause "adverse social effects." Specifically, the list targets "actual controllers" of private schools who neglect management or operate multiple schools in violation of regulations.
Public health and safety are also prioritized. The list includes prohibitions on engaging in pharmaceutical production, medical device testing, and even the collection of human genetic resources for those who have violated the Drug Administration Law or the Regulations on the Management of Human Genetic Resources. These measures are designed to ensure that only "trustworthy" operators handle products and services critical to human life.
Restrictions on High-End Consumption and Travel
One of the most visible aspects of the social credit system is the restriction on consumer behavior for "judgment defaulters" (shi xin bei zhi xing ren), often colloquially known as laolai. According to the 2026 List, these individuals are restricted from high-spending activities to ensure they prioritize the repayment of debts.
Restrictions include:
- Aviation: Prohibition on purchasing airplane tickets.
- Rail Travel: Prohibition on soft sleeper berths and seats on "G-series" high-speed trains, as well as first-class seats on other trains.
- Leisure: Restrictions on staying in star-rated hotels, visiting nightclubs, or golfing.
- Real Estate: Prohibitions on purchasing real estate, building or expanding homes, or engaging in high-end remodeling.
- Education: Restrictions on sending children to high-tuition private schools.
Data from the Supreme People’s Court over the past decade indicates the scale of these measures. Historically, millions of purchase attempts for air and high-speed rail tickets have been blocked annually due to untrustworthiness. The 2026 List formalizes these restrictions, ensuring they are applied uniformly across the country while maintaining a clear removal procedure once debts are settled.
Data Security and Telecommunications Fraud
Reflecting modern challenges, the 2026 Edition includes specific provisions for data security and telecommunications fraud. Organizations or individuals that cause major data leaks, violate core data management systems, or provide important data to foreign judicial bodies without approval face the suspension of data handling operations.
In response to the rise in cross-border scams, the list implements measures from the Law on Countering Telecommunications and Internet Fraud. This includes restricting the functions of phone cards and bank accounts for those involved in the illegal sale or rental of such assets. Telecommunications operators who fail to fulfill their oversight duties can have their business licenses revoked or be ordered to suspend operations for rectification.
Local Supplemental Lists and National Standards
While the 2026 List serves as the national baseline, the document acknowledges the role of local governance. Where local regulations provide for specific penalty measures unique to a region, local social credit leadership departments are authorized to compile "supplemental lists." However, these local measures must not conflict with national laws and must be necessary for the performance of local duties.
The designation standards for "seriously untrustworthy entities" (zhongda shi xin zhuti) are strictly regulated. Departments are prohibited from expanding the scope of these lists on their own. All standards for entry, removal procedures, and remedial measures must be disclosed transparently through the "Credit China" website and relevant regulatory portals.
Implications for the Business Environment
For domestic and international businesses operating in China, the 2026 List provides a much-needed degree of predictability. By consolidating fourteen categories of punishment into a single, legally-backed document, the NDRC and PBOC are attempting to reduce administrative arbitrariness. The "Notice Pledge System" mentioned in the list allows trustworthy applicants to bypass certain bureaucratic hurdles, whereas those with negative records are denied such facilitations, creating a tangible economic incentive for compliance.
Fact-based analysis suggests that the 2026 Edition will lead to a more bifurcated market: entities that maintain high credit ratings will enjoy lower transaction costs and preferential access to government programs, while "seriously untrustworthy" entities will find it increasingly difficult to operate across multiple sectors. The inclusion of "environmental violations" and "back agricultural wages" in the blacklist criteria also signals the government’s intent to use the social credit system as a tool for enforcing ESG (Environmental, Social, and Governance) standards and labor protections.
Conclusion and Future Outlook
The National List of Basic Penalty Measures for Untrustworthiness (2026 Edition) represents a maturation of China’s social credit system. By shifting away from broad, experimental pilots toward a standardized, law-based framework, the government aims to balance the need for social order with the protection of individual and corporate rights. As the system moves forward, the focus will likely remain on the integration of big data and real-time monitoring to ensure that untrustworthiness is not only punished but prevented. For the general public and the business community, the message is clear: creditworthiness is no longer just a moral virtue but a fundamental prerequisite for participation in the modern Chinese economy.
Rifan Muazin
