As everyone knows, a credit system is something that almost all countries need to have, and it is a hugely important tool that helps in keeping the consumer credit market as strong as possible. To that end, the Chinese central bank launched a private credit score company named Baihang in 2018. That being said, a credit score company can only be taken seriously if it has access to the billions of bytes of data with regards to millions of customers and in that regard, the enterprise has run into trouble. For such a populous country like China, the whole enterprise can be a taxing one, and hence the People’s Bank of China reached out to the country’s top tech companies for data on their consumers. The companies in question are Tencent and Alibaba.
However, it has now emerged that the two companies have flatly refused to cooperate with the central bank with regard to data on their customers, and it constitutes an unprecedented move among companies in China. According to reports, there are as many as 460 million people in the country who do not have any credit history at all and instead depend on the growing Fintech sector in order to take out loans. Both Tencent and Alibaba own Fintech companies and hold a treasure trove of data about hundreds of millions of customers. The tech sector in China and the government have been in loggerheads about control of user data for some time now.
This is only the latest instance in which the two have clashed. In order to make sure that the tech behemoths in the country eventually cooperated with the People’s Bank of China, they had been made shareholders in the newly created credit score company. However, that has not been able to work as a motivator for the two companies when it came to sharing user data. Companies like Sesame and Tencent hold the biggest pool of customer data, and the companies do not feel there is much to gain by sharing it with Baihang. One of the employees at Baihang spoke about the sort of information that the company is looking for. The anonymous employee stated,
We’d like to get personal information and credit data from Tencent and Alibaba. Names, ID and phone numbers, histories of borrowings and paybacks.
It remains to be seen how this plays out, but for now, the state and the tech giants are in a stalemate.