China’s Social Credit Dàtóng Dreams

How China’s Social Credit-Will Change our Lives

China’s Social Credit Dàtóng Dreams Technologies that expose Americans to government scrutiny of have always raised concerns. In 1968. China’s Social Credit Dàtóng Dreams bureaux were reporting debtors’ sexual and political preferences, The New York Times[1] warned, “Transferring such information from a manual file onto a computer triggers a threat to civil liberties, to privacy, to a man’s very humanity–because access is so simple”. Two years later the Fair Credit Reporting Act restored some privacy but, in 2018, the Federal Child Support Registry tracked parents, the Federal No-Fly List grounded troublemakers, an IRS list blocked tax dodgers’ passports, the Federal Sex Offenders List followed sex offenders and the National Security Agency’s mission[2] remained, ‘Know It All, Collect It All, Process It All, Exploit It All’.

Americans are subjected to as much government scrutiny as China’s Social Credit Dàtóng Dreams, but the two societies’ attitudes to reflect our Roman, individualistic and their Confucian, collectivist prejudices.

We inherited our distrust of politicians from Republican Rome, most of whose citizens distrusted their governments of aristocratic amateurs.

Who murder rivals and provide the masses with entertainment and free corn, won advancement by creating a majority that supported them and dividing the electorate on that basis. Whereas Chinese politicians won promotion by uniting people around common goals. That is why the Chinese have trusted their politicians for as long as we have distrusted ours.

Ten per cent of all America’s retail sales made online while in China, it’s thirty per cent, and thereby hangs a tale–of the value of trust.

In 1985, as capitalism was taking hold, the government launched Consumer Rights Day. Officials and vendors took to the streets, experts discussed product quality. And TV screens flashed shots of fake merchandise being shredded, crashed and burned. One element of that campaign remains popular today: the annual awards for companies that cheat their customers.

The Law in China

Hauled before a billion gleeful television viewers, cheating CEOs beg forgiveness and promise to change their wicked ways.

Most local but when Apple called out for persistently defying China’s two-year warranty law. CEO Tim Cook apologized and confirmed.

The CEOs of Volkswagen and Nikon also took the Walk of Shame, announced recalls, altered policies, grovelled satisfyingly–and their companies now thriving.

In 2001, with the advent of the Internet and its potential for anonymity and fraud. The People’s Daily called for the creation of then-unheard-of ‘corporate and individual credit dossiers. To promote sincerity, chengxin, and trustworthiness, Yongxin. Scholars extolled the moral benefits of accountability and American consultants promised that credit records would make online transactions trustworthy.

But consumers, accustomed to all-cash transactions made face to face, remained sceptical. So, the government changed the balance of power and legislated[3] ethical manufacturing, truthful advertising, secure distribution, honest payment and trustworthy delivery.

When even this failed to stimulate buyer enthusiasm, Beijing mandated that retailers must accept returns unconditionally within seven days.

So, pay double fines for false advertising and refund three times the price of counterfeits (Nike urged Chinese consumers, ‘make money off the counterfeiters!’).

With trust finally establish and smartphones ubiquitous, shopping exploded. And a billion credit new records created an online economy bigger than the rest of the world’s combined. During one twenty-four-hour sale in 2017 an online merchant. Alibaba, handled 256,000 transactions each second, delivered a billion packages and peddled 140,000 new cars in the process of selling goods worth $25 billion.

On the back of this success, Alibaba pledged $300 billion (of which the government guaranteed $12 billion) to provide finance, insurance, loans, logistics and analytical tools for cash-strapped small firms, farmers and street vendors and to help four hundred million unbanked rural people establish personal credit in a safe online environment.

But even this level of societal trust did not satisfy a society committed to dàtóng and, in 2014, the People’s Daily lamented.

Our national family currently suffers from socially unhealthy phenomena like economic disputes, telecommunications fraud, lack of trust and indifference to human feelings, perhaps because our integrity system poorly designed…Integrity systems are important: they should start with the government than work to strengthen honesty, promise-keeping and respect for basic morality and customs”.

If a Western government made such a statement we would regard it as campaign rhetoric (when President Carter proposed that Americans engage in ‘the moral equivalent of war’ by sacrificing to achieve energy independence from OPEC the public ignored him) but Beijing had data. They Trial Spotting their trust ideas for ten years and figures showed that even more trust would create more money and fewer headaches for everyone.

China Teleological State

Morals are public and collective and since everyone shares the dàtóng dream. They pay attention when the government talks about integrity, honesty and morality. Because they had all experienced ‘lack of trust and indifference to human feelings’ and knew that. They, as a society, needed a moral upgrade.

They relaxed about personal privacy because their culture has always valued trust highly. But put little store in privacy and have always trusted their governments highly. Indeed, they expect senior officials to be not merely trustworthy but morally exemplary and were not surprised when, in 2014, officials promised[4] to create ‘a spiritual civilization, Jingshan warming, and govern the country by virtue, hide zhiguo,’ and saw the first signs three years later.

Until 2017, deadbeats, laolai, could refuse to repay loans indefinitely because the police refused to collect debts, then The Supreme Court ruled that anyone who fails to carry out a valid court order or administrative decision could be placed on a public list for up to two years and a Trial Spot changed the balance of power: a provincial court permitted the publication of laolais’ names, ID card numbers, photographs, addresses and outstanding debts and, simultaneously, restricted their access to ‘luxurious activities’ like first-class hotels, flying and high speed rail and, by 2018[5], had blocked twelve million laogai flights, five million high-speed train trips and–to Beijing’s horror–blacklisted a thousand government officials.

Other Trial Spot courts were thriftily creative. One delivers a stern message to everyone who telephones laowai. “The person you are calling is listed as dishonest by the Dengfeng People’s Court.

Please urge them to fulfil their obligations”. Another, in Henan, simply uses a free app, Douyin, to feature laowai in a video clip (set to dramatic music) on the court’s website and claimed. Their first victory when a Guangxi man saw himself and paid a $78,000 debt.

China's Social Credit Dàtóng Dreams (Image: Douyin)

Suining County[6], Jiangsu Province, had jumped in with both feet in 2010 with a ‘mass credit’ program, dashing xinyong, scoring individual conduct. Citizens gives a thousand credit points to start and lost them for infringing legal, administrative and moral norms. A conviction for drunk driving cost 50 points, having a child without family planning permission cost 35 points and non-repayment of loans, 30 to 50 points. Lost points could be recovered after two to five years depending on the gravity of the infraction and citizens were categorized from A-D on the basis of their scores.

A-class citizens received preferential access to employment opportunities. While lower-ranked citizens faced increasing levels of scrutiny when applying for membership in the Party, the military. The civil service, to qualify as a government vendor, for low-cost housing, basic social welfare, business licenses. And for permits in healthcare, transportation, subsidies, low-interest loans and government-sponsored skills training.

The county went a step further and made the entire list and scores public. A move Xinhua News compared to the Good Citizen Cards, liangminzheng, issued by Japanese occupation authorities. During World War Two and a Global Times editorial demanded that citizens–not the government–control such information.

Though crude and embarrassing, the trial produced valuable data on calibrated disincentives. Public naming and shaming and rewarding compliance with urban rules and regulations.

The Plan for Establishing a Social Credit System 2014-2020 proposes. To first ‘create confidence in the law,’ sīfǎ gōngxìn, as a precondition to building integrity in government, commerce and society. So that government officials, companies and individuals can be held accountable for their impact on society. The Social Credit program will help to create a ‘culture of integrity,’ chéngxìn wénhuà, restore ‘social trust,’ shèhuì chéngxìn gōngxìn, and transform society for the better.

China's Social Credit Dàtóng Dreams

President Xi, who had pioneered transparent government as a provincial governor, saw greater benefits at the national level. He hopes to transform bureaucrats’ responsiveness by inviting everyone who interacts with them to score their performance and to scrutinize opaque government departments.

To make sure they do, he initiated a ‘one-stop’ policy: henceforth, citizens need to make only one visit to government offices to get their needs handled. More than that and their Social Credit will suffer.

The Welfare Ministry wants Social Credit to combat benefit fraud and the Commerce Department wants to stimulate new economic activities and everyone wants to be rid of laogai.

Private individuals can easily alter their behaviour and, in any case, can do little damage but corporate cheating destroys economies and corporate cultures are difficult to change. The government has high hopes for Social Credit here, too. The Ministries of Ecology, Finance and Customs combined their enforcement departments and have already punished[7] fifty thousand companies based on a joint social credit system that tracks company behaviour, makes scrutiny more intense and penalties more severe.

CHINA DREAMS OF Gini

But of all the country’s trust issues, most people identify food security as the most pressing. Market self-regulation does not work because the food supply can be contaminated by many players.

Trial Spots suggest that the system, even in its current, embryonic form. Can reduce market inefficiencies and economic crimes like product counterfeiting, food and drug safety violations and disregard of regulations. In a 2018 report. The Food and Drug Administration listed six cases of swine fever under investigation to illustrate how contamination can get out of hand in a big country:

1. On August 11, the manager of a breeding farm and a hog trader in Heilongjiang Province’s Jiamusi City transported. A load of 253 hogs infected with the ASF virus to a Shuanghui processing plant in Henan Province’s Zhengzhou. Veterinary officials provided false certificates and ear tags. China’s Social Credit Dàtóng Dreams

2. On July 30, a load of 248 hogs were transported from Jilin province’s Siping City to a slaughter facility in Zhucheng, Shandong Province. A veterinary official at a highway checkpoint in Lishu county of Jilin illegally issued a health certificate.

3. In June, a farmer in Jun’nan District of Shenyang purchased 100 piglets from a trader in Jilin Province. After some died of disease, the farmer sold 45 pigs to another farmer in Shenyang New District. These pigs were the first ASF case reported on August 2.

4. In Shenyang’s Faku County, China’s Social Credit Dàtóng Dreams two officials. Issued animal health certificates outside their region of responsibility, making it difficult to trace the virus.

5. In Anhui Province, Xuanzhou City, one veterinary official was criticized for failing to shut down. An illegal slaughterhouse and a second official issued false health certificates.

6. On September 20, a farmer in Tongliao, Inner Mongolia allegedly bribed. A veterinary official to issue a health certificate for 96 pigs transported. From Tieling in Liaoning Province to a slaughterhouse in Hohhot, Inner Mongolia. Four of the pigs had symptoms and two died.

 

Since corporations can do far more damage than individuals, the State Enterprise Credit Reporting System. Guójiā qì yè xìnyòng xìnxī gōngshì xìtǒng is integrating existing laws into a transparent system of universal accountability designed. To make transactions–court judgements, online diaper purchases, traffic fines and mortgage applications–cheap, easy and trustworthy and life more enjoyable for trustworthy people and less convenient for cheats.

The system gives users to access companies’ licenses, registered offices, compliance records and penalties. And bars executives of blacklisted companies from holding senior positions in other companies for several years (and even from privileges like sending their children to private schools).

Rogier Creemers says, “Rules broken by corporations can lead to their being unable to issue corporate bonds and individuals officers being blocked from company directorships. Trust-breakers can face penalties on subsidies, career progression, asset ownership. The ability to receive honorary titles from China’s Social Credit Dàtóng Dreams government. Penalties include limiting the ability to establish companies in the financial sector. Issue bonds, receive stock options, establish social organizations or participate. So, in government procurement programs or receive government subsidies or in-kind support.

Trust breakers barred from senior positions in State-Owned Enterprises, financial sector companies and social organizations, entry into the civil service. The Communist Party and the military; they restricted from sectors including food, drugs, fireworks and dangerous chemicals and refused authentication for customs purposes. They ineligible for honorary titles and special procedures were required.

when they applied for loans, barred from purchasing real estate, land-use rights, exploiting natural resources and subject to restrictions on conspicuous consumption. And no longer allowed to travel first class, on high-speed trains or civil aircraft, to visit star-rated hotels or luxury restaurants, resorts, nightclubs and golf courses, to go on foreign holidays. To send their children to fee-paying schools, purchase some high-value insurance products, or buy homes or cars”.

An early harbinger of the power shift occurred when a prominent Beijing developer. Ignored court orders to pay his subcontractors and was denied a first-class ticket to London. He flew tourist.

Some trials are[8] highly controversial: a university in east China’s Zhejiang Province called the father of a student. Who had failed to settle an old bank debt, saying they had difficulty completing his son’s enrollment because the father still owed $30,000 to a local bank two years after the bank took him to court for defaulting and a judge warned him that blacklisting comes with consequences.

He promptly paid the debt but the case caused a stir online where netizens opined about ‘collective punishment’. Some supported the court and the school, saying that people with bad behaviour should be punished and arguing. Those children would not enjoy the benefits bought by the unpaid debt, the proceeds of crime. Others, concerned about children’s right to education, noted that parents, not their children are responsible for their own misdeeds. Five days later, the father paid the debt.

Trial Spots are experimenting with objections, appeals and credit repair and with citizens’ rights protections and good Social Credit, ratings are winning hearts.

And minds by attracting cheaper loans, upgraded flights, no-deposit rentals and even desirable schools for offspring.

Young people have begun posting their scores to attract mates, attaching videos to show how Alibaba’s unstaffed automobile vending machines provide them with free, three-day test drives and cheap loans. If they buy cars and China’s Social Credit  Dàtóng DreamsDaily regularly talks up the benefits. “After graduation, Zhang Hao, 28, found a job at a securities company in Hangzhou.

On his mobile app, Alipay, he saw an apartment he liked. Alipay, Alibaba’s mobile payment service, rates its users’ credit based on their consumption and investment habits and Zhang had a high score. So, exempt from the $1,000 security deposit and the $200 broker’s fee. The experience not only saved Zhang time and energy in renting an apartment, which is often complicated. But, also gave him a fresh look at the city where he was about to build a career”.

Expected to roll out nationally by 2021, Social Credit will be China’s biggest attitude adjustment since the Cultural Revolution.

If the program remains true to its purpose it will reduce friction and, thus cost, for trade, commerce, travel and even international relations:

a trusted, reliable third party who lubricates consumer commerce by providing verification and assessment and harmonizing social conduct.

tilt the balance of power further towards good citizens high and low and law enforcement agencies are delighted because, they say, “Regulation is easy but enforcement, zhixing nan, is difficult”.

More carrot than stick, the Social Credit will encourage citizens and corporations to create a trusting society, closer to dàtóng.

Could Social Credit be the new, kinder, gentler face of crime prevention?

[1] Witness Says Credit Bureaus Invade Privacy and Asks Curb. THE NEW YORK TIMES, MARCH 13, 1968

[2] Collect It All: The NSA Surveillance Doctrine. Andrew Conry Murray, Information Week, August 2014

[3] www.globalpolicywatch.com/2016/08/china-releases-draft-implementing-regulations-for-consumer-rights-protection-law/

[4] 18th Party Congress, November 8, 2012

[5] Global Times, 2018/5/20

[6] China’s Social Credit System: An Evolving Practice of Control

Rogier Creemers. University of Leiden

[7] China Economic Daily

[8] China Daily. 2018-7-14. 09:50:51

 

Have any Question?

3 thoughts on “China’s Social Credit Dàtóng Dreams”

  1. Pingback: China Teleological State - Here Comes China! China Teleological State

  2. Pingback: CHINA DREAMS OF Gini - Here Comes China! CHINA DREAMS OF Gini

  3. Pingback: Is China Really a Threat? - Here Comes China!

Leave a Comment

Your email address will not be published. Required fields are marked *

Share:

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
hcc headline2 mobile 1

GET ALL THE WEEK'S NEWS
WITH YOUR SUBSCRIPTION TO THE TOP CHINA NEWSLETTER

Amazon BUY THIS BOOK:

Most Popular

Categories