Explore our Chinese solution, including the key verification sources available, the standard of verification possible and how to protect your organisation.
By 2020, digital payments in China were projected to reach over $1.9 trillion, with an estimated 40% of the population already using mobile digital wallets. As China cements its position as a global economic powerhouse, it’s vital for businesses and institutions to understand the country’s verification processes, including the use of the ID number within the People's Republic of China. The ID number remains unchanged for the entire lifetime of a Chinese citizen. Ensuring that they can confidently authenticate the identities of Chinese individuals is not only a key compliance issue but also a critical step in mitigating risk and meeting regulatory obligations.
China’s economic influence has intensified over the past decade. Once known as the world’s largest exporter in 2010, China became the world’s largest economy in 2015, surpassing the U.S. the previous year. Although per capita income remains below the global average, the country’s post-COVID recovery has been remarkable. China recorded an 18.3% GDP growth rate in the first quarter of 2021 compared to the same period in 2020—the strongest quarterly growth since 1992. As vaccination campaigns progress, sectors such as hospitality, recreation, and tourism are poised to operate without major restrictions, while financial services may experience a more cautious recovery due to tighter lending conditions. In this evolving landscape, our Identity Verification Experts can guide you through the key verification sources and standards available, helping you protect your organization and navigate China’s complex citizen identification with confidence.
Financial Action Task Force (FATF) Status
China has been a member of the FATF since 2007, as they have established money laundering and terrorist financing regulations in compliance with the FATF recommendations.
Since the FATF’s 2019 assessment, China is continuously updating its 2007 AML regime to strengthen its framework. China is compliant on 7, largely compliant on 18, partially compliant on 6, and not compliant on 6 of the recommendations. China remains in enhanced follow-up and will report back to the FATF on progress to strengthen its implementation of Anti-Money Laundering / Countering the Financing of Terrorism measures in October 2021.
Regulators
People’s Bank of China (PBOC) (中国人民银行)
The PBOC is the central bank of the People’s Republic of China, and they are responsible for the establishment and regulation for all monetary policies and financial institutions in mainland China. PBOC is the primary authority coordinating all AML/CFT initiatives of the government with several regulatory bodies under it:
The PBOC heads the Anti-Money Laundering Joint Ministerial Conference (AML Joint Ministerial Conference) with 21 state agency members. Since 2002, they have regular meetings to direct and coordinate the AML/CFT framework implementation.
The China Banking and Insurance Regulatory Commission (CBRIC) is the prudential regulator for bank and insurance entities and supports the PBC on AML/CFT supervision.
The China Securities Regulatory Commission (CSRC) is the prudential regulator for securities institutions and supports the PBC on AML/CFT supervision.
Anti-Money Laundering Bureau (Securities Bureau) is responsible for AML activities in the People’s Republic of China. They cover everything AML from conducting studies, establishing rules and policies for financial institutions, engaging in international cooperation, and consolidating and analysing information on suspicious payment transactions. Along with assisting the judiciary departments in investigating money-laundering-related criminal cases, ensuring proper security arrangements for the PBC system.
The Ministry of State Security (MSS)
MSS is responsible for investigating crimes that threaten state security including money laundering and terrorist financing. They collect and process ML/TF intelligence and share such information with other investigative bodies.
Eurasian Group (EAG)
In 2004, the EAG was established by the decision of the Inaugural Conference and at the initiative of the Russian Federation, supported by the FATF, IMF, World Bank, and several other countries. The main goal of EAG is to facilitate the implementation of international standards, carry out joint programs within the Financial Intelligence Unit sphere, conduct evaluations, analyse trends in AML/CTF mechanisms, and coordinate technical assistance corporations.
Asia Pacific Group on Money Laundering (APG)
China is a founding member of the APG since 1997. The APG is an international governmental organisation. It consists of 41 member jurisdictions, focused on ensuring that its members effectively implement the international standards against money laundering, terrorist financing, and proliferation financing risks.
US Department of State Money Laundering Assessment (INCSR)
The US State Department categorises China as a Country/Jurisdiction of primary concern regarding Money Laundering and Financial Crimes.
Relevant regulations
China has taken significant steps to strengthen its AML/CFT regime as money laundering is a severe problem in China. In the first six months of 2020, the PBOC issued penalties of more than 370 million yuan ($53.9 million) for money laundering violations, exceeding the total for all of 2019.
Recently China has tightened its KYC and AML requirements for financial institutions (FI’s) in its practice to eliminate money laundering and terrorism financing. FI’s are required to enhance their process of due diligence by conducting periodic identity verification checks. Along with maintaining their obligation for carrying ongoing monitoring processes for all transactions. The AML regulations drafted in 2007 have been updated, broadening their scope to non-financial institutions. Non-financial institutions will be required to comply with the rules.
The PBOC enacted the Data Security Law (DSL) on June 10, 2021, taking effect on September 1, 2021. The DSL fulfils the deficiencies in the Cyber Security Law, 2017. These data protection laws include a series of laws, regulations, and national standards to further high standards and detailed requirements for the protection of personal information. DSL also states that any data processing that harms China’s national security, public interest, or legal rights and interests of its citizens and organizations is subject to legal liabilities. These increased regulations for personally identifiable information (PII) shape a strict legal structure for the Chinese market. Organisations are obligated to comply with these regulations to function legally.
Chinese verification available
Chinese citizens can be verified using government, commercial, and credit data sources within the People's Republic of China. Institutions can verify and validate their customers’ names, dates of birth, gender, province, phone number, addresses (based on their documentation) and document numbers. Citizens of China can be verified using the following documents:
National identity card (居民身份证)
The Chinese national identity card is the official identity document issued by the People’s Republic of China. The PRC State Council approved the citizen identification number system on October 1, 1999. Residents are required to apply for resident identity cards from the local Public Security Bureau. You can verify your customers’ first name, last name, date of birth, gender, and card number.
Passport
According to the Passport Law of the People’s Republic of China, the passport is issued to citizens by the Ministry of Public Security. You can verify your customers’ first name, last name, date of birth, passport number, and expiry.
Driver licence
The Department of Motor Vehicle issues the Chinese driver licences with each province having a different format. You can verify your customers’ first name, last name, date of birth, and licence number.
AML Screening
Global watchlists can identify if Chinese citizens are high-risk individuals or entities. You can screen your customers’ against PEPs, Sanctions and adverse media lists.
The Resident Identity Card (居民身份证)
The Resident Identity Card is an official and compulsory identity document for all Chinese citizens. Most Chinese individuals carry their cards with them as it is the only legal personal identification card recognised by most institutions. All Chinese citizens are issued with a unique 18-digit Citizen Identity Number which remains unchanged for their whole life.
The Resident Identity Card system also supports the verification of Chinese citizens to satisfy the Anti-Money Laundering and Know Your Customer regulations. Even when a Chinese citizen changes their Hukou (Household Registration) to a different province, their Citizen Identity Number remains the same.
The ID China card is designed very similar to a traditional credit card, containing core information assets on both sides.
Front Face of the Resident Identity Card:
Issuing Authority (签发机关) – location of the public security bureau which issued the card;
Period of Validity (有效期限) – the period given depends on the age of the individual; citizens over 46 years are given a “long-term” card with no expiry date.
Rear Face of the Resident Identity Card: ID Number
Name (姓名) – the surname is written first, and the vast majority of Chinese citizens have a single-character surname;
Gender (性别) – male (男) or female (女);
Ethnicity (民族) – China recognises 56 different ethnic groups, with Han (汉) being by far the most common at over 90% of the population;
Date of Birth (出生) – written in the form Year (年) Month (月) Day (日);
Address (住址) – although many Chinese citizens move away from home for work, this address usually refers to their “hometown address”;
Citizen Identity Number (公民身份号码).
Chinese crime verification
The Crime Verification service verifies the identity of a Chinese National and provides information regarding any Court and Police Records. This service is included as an optional return within the National ID verification.
Name – Match / No Match
DOB – Match / No Match
ID card number – Match / No Match
Additional returned data – Yes/no indicators if Court and Police records exist
One by one verification standard
1×1 verification is a process by which a Chinese citizen's identity is verified against one independent and reliable verification source; normally Chinese Government-issued ID documents.
To verify the authenticity of a Resident Identity Card, enter the following information for verification:
Name (姓名)
Citizen Identity Number (公民身份号码)
Date of Birth (出生)
This information is submitted directly to the Data Zoo IDU server located in China to adhere to the National Privacy Principals; none of this information is stored anywhere else in the national internet ID system. The response will be returned with a Match/No Match for each data element.
Two by two verification standard
The process by which a citizen’s identity is verified against two independent and reliable verification sources; normally Government-issued ID documents within the People's Republic of China and one other independent and reliable verification source.
Other independent and reliable verification sources to choose from include the following:
Bank Card – card information from the 20 banks that are part of the domestic bank card organisation in the People’s Republic of China and have been enhanced to support identity matching.
Name (姓名) – Match / No Match
Citizen Identity Number (公民身份号码) – Match / No Match
Date of Birth (出生) – Match / No Match
Banking Card Number – Match / No Match
Phone
Name (姓名) – Match / No Match
Citizen Identity Number (公民身份号码) – Match / No Match
Phone Number – Match / No Match
As the necessity for Electronic Identity Verification is growing in China and with their citizens increasingly involved in cross-border payments, the government has increased efforts to digitise their Resident Identity Cards and strengthen the national internet IDs. Therefore, to do business in and with Chinese individuals, one has to understand how to achieve successful identity verification and fulfil KYC and compliance obligations in China.