China Embraces Blockchain to Enhance Small Business Lending

China is taking steps to improve its banking system by implementing blockchain technology in lending processes. In a joint policy notice issued recently, the State Administration of Taxation and the National Financial Regulatory Administration called on banks and local authorities to upgrade the country's bank-tax interaction model.

The goal is to reduce information gaps and make it easier for small businesses to access financing. By integrating blockchain technology into the lending process, regulators aim to improve data sharing between tax authorities, lenders, and enterprises.

The policy notice emphasizes the importance of data standardization in credit assessment, making it possible for banks to assess repayment ability more accurately. It also highlights the need to treat tax compliance as a core indicator of creditworthiness, rather than just a regulatory formality.