social credit system - Souwie on ...

March 11, 2020 Souwie

In a world where virtual reality and fake news are becoming the norm, demand for that highly prized commodity, trust, is rising. In China, the speed of change on a scale hitherto unknown together with a lack of political transparency, has created a large deficit of this vital ingredient. I spoke with researchers from the Leiden Asia Centre on the social credit system, due to be rolled out nationwide this year.

What is the social credit system and how does it work?

The Chinese government provided the first clear definition of what the social credit system should look like in 2014. According to the system’s founding document, the scheme should “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.” Since then, Dr. Rogier Creemers explains, the government has ‘opened it up to tender’. The result: ‘a huge variety of systems across the country driven by the general principles and spirit of social credit’.

Thus, in 2015 there were 11 pilot schemes but this rapidly grew to 32 and by 2017 there were 623 social credit systems on offer across the country. Thus Associate Professor, Liu Jun, of the University of Copenhagen, points out that currently there is no unified social credit system in China. Some are government led and some are corporate led systems involving companies like Tencent and Alibaba. Liu Jun goes on to draw parallels with Aadhaar in India, the world’s largest biometric database and Germany’s schufa system for credit rating.

However, the Chinese approach, although not yet fully operational, appears to be much more far reaching. PhD candidate, Adam Knight, has spent time in China researching the reality of the social credit system. He explains that the Chinese government has selected 28 model cities from across the country on which others will base their social credit systems.

One that stands out in particular is Rongcheng in Shandong province. It is a relatively small city by Chinese standards, 650 000 people, and represents, ‘a very distilled microcosm of the national system at large’. It is here that Adam Knight conducted his research into the nuts and bolts of the system on the ground. He explains that it is the Credit Management Department’s job to gather information, decide on punishments and rewards and catalog behaviours.

Minus 50 points for spreading rumours on WeChat.

Knight provides an example of the taxi industry. Each taxi driver in Rongcheng is given a social credit ranking. They are pooled in groups of ten with the ‘best’ or most honest taxi driver placed in charge. This person is responsible for reporting misbehaviour from other members of the group. The information is used to create a star rating for each driver which is displayed on the front of the taxi. Other examples include actions like 10 points for clearing snow off the pavement, minus 5 points for arguing with your neighbour or minus 50 points for spreading rumours on WeChat. Drunk driving will probably cause your score to plummet. But donating to a charity or volunteering in one of the city’s programmes will earn you social credit. If your score drops below a certain level you may be banned from receiving government subsidies or attending university.

How is this data being collected? Officials from the department of Credit Management insist that anything that influences your points needs to be backed with official documents. However, Knight explains that there are well over a thousand volunteers in the Rongcheng area whose job it is to ‘snoop on their neighbours’, pen and paper in hand. These social credit records are then passed up on a monthly or sometimes a yearly basis. Cash incentives further muddy the waters of the system and result in data of varying quality. In theory, a person should be given 10 days notification if their social credit score is going to change. But in reality this seldom happens, Knight explains. Inaccurate data undermines one’s ability to appeal against the system.

Social credit system ‘is a tool designed to enhance trust in the market place’ – Dr. Creemers

Chinese media tends to provide what Knight terms, ‘an event driven perspective’ on the introduction of the social credit system. It is presented as life-improving and there is little focus on issues of surveillance or privacy. Chinese law scholar, Dr. Creemers, who argues that China is largely ‘misunderstood’ due to lack of genuine interest from the West, admits that there is ‘no notion of a generalised right of privacy in Chinese law’. Instead, rules on data protection are ‘deeply contextualised’.

Data is not therefore seen as the personal property of citizens and is often collected without their permission. Creemers admits that he doesn’t see any form of GDPR coming to China soon. But describes the social credit system as ‘a tool designed to enhance trust in the market place’. Until recently few Chinese citizens had a bank account. This makes assessing credit worthiness difficult, particularly in a country as large as China. A lot of government held information in China is still on paper. Thus the social credit system is also about digitizing these paper records.

‘China is in a very serious trust crisis’ – Zheng Yefu

But the issue of trust goes deeper than this. “China is in a very serious trust crisis,” said Zheng Yefu, a sociologist at Peking University and author of the book “On Trust.” Reasons for this are varied. Some cite the Cultural Revolution and other political changes that ended traditional societal structures designed to ensure trust. Others say that the demands of a market economy in a society that lacks a well-developed legal and regulatory system is to blame.

The government’s recent morality campaign – ‘Eight virtues and Eight Shames’ is evidence of growing concerns in this regard. But as some commentators point out, the government itself is far from transparent. The release of inaccurate government statistics for political purposes, a general lack of accountability and systemic corruption within the party ranks are hardly the ingredients of which trust is made.

Willing to forego some privacy if it means less fraud and crime.

Ethnographic research by Xinyuan Wang of University College London carried out over a period of 16 months suggests that Chinese citizens view the situation quite differently. Focusing on Shanghai, Wang found that most were willing to forego some privacy if it meant less fraud and crime. Food and drug safety are particular areas of concern. However many also associate the West’s ‘mature credit system’ with high levels of trustworthiness. The rule of law and the trust and transparency that it fosters cannot be replaced by the Communist Party’s social credit system. Perhaps one day Chinese citizens will know this, from first-hand experience.

December 4, 2019 Souwie

China’s international image has been decades in the making. Although democracy and human rights have never been high on the Communist Party’s agenda – phenomenal economic growth paired with a reasonable record of line towing with regards to international organisations and diplomacy resulted in acceptance by many Western nations of China’s authoritarian regime. Some even suggested that China might provide an alternative model to Western capitalist democracies for developing nations. But in just a few short months, much has changed.

Some of the less savoury aspects of just how the massive apparatus of the Chinese Communist Party works have been highlighted. From the Hong Kong protests to the mass internment camps of China’s Uighur Muslims, along with advanced surveillance schemes and claims of the debt trap diplomacy of its Belt and Road initiative – China is coming under increasing pressure, particularly from the US. For those who favoured a live and let live approach, because, let’s be honest, money talks, such an option is increasingly difficult to justify.

Increasing tensions between China and Hong Kong are perhaps one of the greatest sources of embarrassment for a nation for whom ‘face saving’ is essential. After months of protest by pro-democracy groups, local Hong Kong elections have shown that the vast majority of Hong Kongers support the protesters. Contrary to narratives portraying the protesters as criminal thugs, bent on disrupting one of China’s most prosperous financial hubs, these results have apparently surprised even Beijing.

For years Hong Kong has seen its rights eroded by involvement from Beijing.

In contrast to Beijing’s trust in the power of economic prosperity to ensure compliance, a combination of factors have created a storm that is proving difficult to contain. For years now, Hong Kong has seen its basic rights eroded and ‘reinterpreted’ by Beijing and those who support it. This, in combination with a lack of social welfare programmes in Hong Kong, soaring house prices and erosion of job opportunities by an influx of mainlanders have created rising levels of anger and discontent among Hong Kong’s youth.

Close on the heels of the Hong Kong protests and Taiwan’s increasingly pro-democratic stance in the run-up to January elections, come the Xinjian Papers. Over 400 pages of leaked documents, detailing exactly how ethnic minorities in the Xinjiang region would be ‘re-educated’ in government organised ‘training schools’. These internal documents were leaked to the New York Times by a concerned member of the Communist Party. They reveal just how different the sanitized narrative of job training centers for China’s Muslim minority is from the chilling reality of exactly how officials should go about organising the most extensive internment campaign since the Mao era.

What happens to party members who dissent?

Documents went so far as to advise officials on how to handle awkward conversations with returning students who found their relatives gone. Lines like ‘Freedom is only possible when this virus in their thinking is eradicated and they are in good health’ bear a striking resemblance to the doublespeak of Orwell’s seminal work on totalitarianism, 1984. The leaked documents also provide insights into what happens to those party members who dissent. Especially high-ranking ones, such as Wang Yongzhi, who did not ‘stick to rounding up everyone who should be rounded up’. Mr. Wang who also defied the regime by ordering the release of 7000 camp inmates, was subject to public character assassination, stripped of his position and prosecuted.

Even more recently, China has launched compulsory face scans when registering users of new phones at stores across China. Those registering a new phone number will, according to reports, have to record themselves turning their head and blinking. For years now China has focused on matching internet users with their real identities. Social media firms were required to implement real-name registration almost a decade ago. The Chinese government insists that such measures are in the interests of all citizens as they will boost cyber-security and reduce internet fraud. This culture of surveillance dovetails almost seamlessly with the rise of artificial intelligence and big data.

Black-listed on China’s social credit system?

Beijing’s social credit system, due to come into full effect in 2020, exemplifies the kind of social control of which any self-respecting totalitarian regime would be proud. Although commentators say that its reach is still patchy and it is doubtful that it will be ready by next year, the ideas behind it are draconian. Credit is not only gained, it can also be lost and an individual may be black-listed as a result. If this happens, rights can be removed, including one’s right to travel, buy property or take out a loan. When this happens, as it did to Chinese journalist, Liu Hu, there is little one can do. There was no file, no police warrant, no advance notification, in his case. The lack of due process, makes recourse to justice extremely difficult.

These are just a few of some of Beijing’s less savoury projects. Much has been written about the so-called debt-trap diplomacy of its Belt and Road Initiative. In addition, China’s increasingly proactive stance when it comes to territorial claims in the South China Sea and Antarctica have also been noted. There are also a number of individual cases that raise concern. Australian journalist and blogger, Yang Hengjun, has been held in China since January. Details regarding his alleged offence are sparse but he has been charged with spying.

‘Democracy peddler’ held for months without access to his lawyers.

Australian authorities are concerned about his ailing health and the fact that he continues to be denied access to his lawyers. His case is due to be heard in China, in March. The conviction rate for those accused of a crime is 99% in China. It is typically preceded by a confession obtained through a long and secretive detention process. For self-confessed Chinese spy, Wang Liqiang, death is fairly certain should his request for asylum in Australia be denied. Wang’s story is still under investigation by Australian authorities. Beijing claims that he was convicted of fraud in China and that his claims are ‘absurd’.

What does the future hold? At a recent Chatham House rules event I attended on China’s role in global economic governance, a number of experts on China drew on the country’s history in order to provide a context for its future path. More than one drew attention to the Chinese view that the nation dominated the international system between the 5^th century BC, right up until 1900. The following decades were a time of humiliation and isolation for China. This ended in the 1970’s when China returned to the international system. Focusing on inclusion in global governance institutions and wider international acceptance, China was ready to step forward into a more assertive role by 2010.

Is it simply a matter of time?

Now, rising Chinese nationalism goes hand-in-hand with the nation’s increasing global dominance. The issue of course, is the Chinese people themselves. Will increased power and prosperity be enough to quieten a desire for more individual rights and freedoms? History suggests not, especially given events in Hong Kong and Taiwan. But the time scale of rising discontent, is also a major factor and that, is far more difficult to gauge.