The country's central bank issued rules Tuesday to help set up a unified credit database on corporate borrowers to help banks evaluate risk.

The database would help "promote the development of the credit system, maintain financial stability and prevent lending risk," according to the bank's rules published on its Web site.

The central bank would be responsible for building and maintaining the database, which would pool credit information on corporate borrowers from commercial lenders, it said. Commercial banks would in turn use the corporate database to check the credit worthiness of borrowers once it was completed.

In January, the central bank formally launched a nationwide database to help banks check people seeking consumer loans.

Eager to promote a modern credit culture, the government has been pushing for a unified corporate credit database to help debt-ridden lenders evaluate risk as foreign competition rises.

Analysts say China has much to do to improve the country's weak credit culture and wean State banks off loans that are politically directed or influenced by government policies.

For decades, State banks have issued loans to loss-making State firms according to political rather than commercial criteria, resulting in a mountain of bad loans that have clogged the financial system. Chinese banks have been free to price their loans according to the creditworthiness of borrowers since the central bank removed the upper limits on lending rates in October 2004.

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