Debt collection is a legal grey area in China at present, but the training and licensing of 100 debt collectors could be the start of the profession's emergence from the shadows.

While it remains illegal to operate a debt collection business, it is hoped that an increase in trained and qualified collectors who operate within the law can be a solution to China's debt problems.

For example, the China Banking Regulatory Commission at the end of June put bad loans of the nation's banks at 1.28 trillion yuan (US$150 billion).

The training programme was launched by China Employment Training Technique Instruction Centre (CETTIC), under the Ministry of Labour and Social Security, in April. The first batch of graduates qualified in late August.

While debt collection companies are illegal, in fact the business has existed for more than 20 years, with companies usually registered as "consulting" or "commercial investigation" firms.

"People always regard us as an underworld group, and link us to illegal activities such as violence, intimidation, and even kidnapping," said Zhao Qian, head of a debt collection company in Beijing, using an assumed name.

Although his company is registered as a commerce and trade enterprise, his main business is to ask for debt payment on behalf of banks, companies, and even individuals.

In Beijing, there are about 300 companies like Zhao's that are waiting for a legal license for their business, the Beijing News reported yesterday.

And every year, these companies recover debts of nearly 100 million yuan (US$12 million).

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