No Trace Left: China Cleans Up Business Credit Records
The State Administration for Market Regulation recently issued a notice regarding the implementation of the Measures for the Administration of the List of Enterprises with Abnormal Operations. According to the notice, once a business entity is removed from the abnormal operations list, the related information will no longer be publicly displayed—achieving a “no trace” policy after removal.
To date, China’s National Enterprise Credit Information Publicity System has stopped disclosing about 48.42 million entries concerning abnormal operations, affecting around 25.51 million market entities—including 5.02 million enterprises, 20.13 million individual businesses, and 362,400 farmers’ cooperatives.
The revised Measures came into force on May 1, 2025. Upon approval of a removal application, public disclosure of the related listing will cease. This addresses business concerns, enhances credit restoration, fosters fairer conditions, and strengthens market confidence—supporting China’s economic recovery.
The abnormal operations list, part of China’s business “blacklist” system under the social credit regime, tracks relatively minor violations—mainly around incomplete or outdated business disclosures. It differs from more serious lists like the Seriously Illegal and Dishonest Entities List or the National Basic List of Punishment Measures for Dishonest Conduct.
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Businesses may apply for removal depending on the cause of listing:
- Failure to submit annual reports: May be removed after submitting the overdue report.
- Failure to disclose enterprise info on time: May be removed after fulfilling disclosure duties.
- Failure to register a name change: May apply for removal after the name change is properly registered.
- Unable to contact via registered address: Can apply after updating the registered address or confirming reachable contact details.
In each case, the local market authority will decide on removal within five working days of receiving the application or verifying the correction.
These changes make the system more balanced. While transparency remains a goal, companies that address minor infractions won’t face lasting reputational damage. This encourages timely compliance while reducing the long-term burden on businesses, helping foster a healthier business environment. Keep in mind, that compliance and liability regulations for companies have tightened and underwent (partially) significant changes under the new company law.
We at ECOVIS advise the person in charge to closely monitor the status of the enterprise’s abnormal operation list, and to contact professionals for help in a timely manner if necessary.
