TodЛs somos políticЛs. TodЛs hacemos política.

As mentioned in the previous article, SCS is not a monolithic centralized system, but rather a set of sectoral, local and private policies, regulations, and credit systems. Among these systems, inconsistences, frictions, and contradictions occur from time to time. Therefore, to avoid making oversimplified judgments about the future of this system, we need to investigate its current structures and operations, and analyze the internal and external forces that can shape its future development trajectory. This article seeks to rethink the current risks associated with SCS and to present a perspective on domestic contention around SCS from both inside and outside the government system.

Problems ahead

Recent data from Sesame Credit shows SCS has been effective in achieving its primary goal of regulating market participants. For instance, 46 percent of those Sesame users who were blacklisted paid off their debt within one month (Ahmed, 2019). However, we have also seen worrying trends in the current implementation of SCS, especially in the local city-level SCSs, which incorporate more and more social conduct into their credit evaluation frames. Briefly, there are two salient risks: the invasive expansion of SCS and the lagged institutional safegurads for data rights protection.

Primarily, there is a dangerous tendency of excessively expanding SCS into various social domains, some of which are hardly relevant to creditworthiness. As mentioned in the first article, some cities have incorporated dubious terms into their own SCSs such as trivial misconduct like parking violations, not paying electricity fees, garbage misclassification, and eating in the subway. These attempts not only threaten individual autonomy, but also deviate from SCSs’ initial goal of building social trust. Incorporating misconduct that has nothing to do with creditworthiness only deteriorates people’s trust in the system. Besides, these problematic SCS terms also reflect a lack of consistent understanding of the boundary and procedures of credit data collection and processing.

Besides, in contrast to the rapid expansion of blacklists and punishments, institutions for individual data rights protection seem to lag behind. To prevent potential misclassification and biases that could lead to wrong blacklisting, citizens should be given adequate information and chances to make a case about why and how his/her records should be modified (Ahmed 2019). In Shanghai (Standing Committee of the Shanghai People's Congress 2017), Hubei (Standing Committee of the 12th Hubei Provincial People's Congress 2017) and Zhejiang (Zhejiang Provincial Development and Reform Commission 2019), such objection and correction mechanisms are just beginning to take shape and citizens can request to correct SCS records if errors or omissions are found. However, more effective institutions are still needed to hold the social credit departments accountable and transparent to citizens. Besides, it is still unclear whether the accuracy and security of data gathering and processing in most SCSs can keep up with the rapid expansion of the local SCS database (Chorzempa et al. 2018).

Contentions inside and outside the government system

Inside the system: internal dynamics

The Chinese political system is never monolithic. Throughout the development of SCS, we can always see contentions among different departments and levels of government, and these internal debates have been constantly shaping SCS.

During the early experimental period before 2014, state media had already denounced some local attempts at scoring and rating citizens based on problematic “social trustworthiness” criteria. These early attempts were likened to the “Good Citizen Cards” given out by the Japanese occupation army during World War II (Creemers 2018, 10). However, at this moment, some city-level SCSs like the one in Rongcheng seem to be moving backwards to these precarious ranking and scoring practices.

Currently, most internal restrictions and criticisms of problematic local and private SCSs come from the central People’s Bank of China (PBoC), the national coordinator and supervisor of SCS construction. In 2015, PBoC interrupted a local governmental SCS in Jiaxin city on the grounds that it was “treating citizens unfairly” (Zhang 2019). In 2018, PBoC also directly suspended 7 private credit service projects due to their security deficiencies and data rights infringements (Zhang 2019). Many officials from PBoC are also ardent advocates of a narrower, economic-centered definition of social credit. The deputy director of PBoC Chen Yulu insisted that local SCSs should be used to deal with “trust crisis within transactions caused by information asymmetries in the market”, instead of “being a tool for differentiating people into hierarchical social classes” (Li 2017). Wang Lu, the former deputy director of the credit center in PBoC also asserted that “using social credit system to tackle all social problems is not only naïve, unpractical, but also harmful” (Wang 2017). Besides, other internal forces including the National Development and Reform Commission (NDRC) and some members of the National People’s Congress (NPC) have urged to clarify and raise the standards of recording credit information and set more rules to prevent local power abuse (Zhang 2019).

Outside the system: public opinion

Outside the political system, public opinion also affects the layout of SCS. Kostka and Genia’s study shows a very high level of public approval towards SCS in China: over 80% of all respondents approve of SCS and strong supporters of SCS are more likely to be older, have a higher income, male, more highly-educated urban citizens (Kostka 2019, 11). Supporters perceive SCS as a useful instrument to mitigate institutional and regulatory deficiencies, leading to more trustworthy and law-abiding behavior in the market.

However, some problematic SCS measurements still drew wide public attention and criticisms, sometimes leading to changes. In January 2019, the PBoC credit reference system attempted to incorporate water and electricity fare payment into individual financial credit evaluation criteria, but this attempt was eventually discarded due to wide discontent on social media. Afterwards, state media also called for more caution and prudence in designing credit evaluation criteria and suggested more effective institutions for data protection and the modification of incorrect credit records (Xinhua Net 2019).

Conclusion

Contrary to the popular imagination of a sophisticated monolithic totalitarian surveillance and social control regime, the current state of SCS is rather fragmented and immature and its dominant rationale is still centred on regulating behavior in the marketplace. However, the lack of a clear consensus about credit data gathering and processing has left space for local power abuse and invasive data collection, bringing risks to personal information rights and individual autonomy. Therefore, the following institutional improvements may be needed to address these problems: 1) clearer legal foundations and consensus on social credit data gathering and processing that respects individual autonomy and data rights, 2) effective institutional restrictions on and supervision of local and private SCSs that can hold SCSs accountable and increase transparency, and 3) an adequate dissent and correction mechanism that can help citizens challenge problematic and incorrect SCS records. Fortunately, in recent domestic contentions, a considerable number of voices from both inside and outside the government system are calling for a restriction of the excessive expansion of the SCS and for the protection of individual data rights, which gives us some hope for a more just and effective SCS.


Ahmed, Shazeda. 2019. “The Messy Truth About Social Credit”. Last modified: April 22, 2019. http://www.chinafile.com/reporting-opinion/viewpoint/messy-truth-about-social-credit.

Chorzempa, Martin, Paul Triolo, and Samm Sacks. 2018. “Policy Brief 18-14: China’s Social Credit System: A Mark of Progress or a Threat to Privacy?” Last modified: June 2018. https://piie.com/publications/policy-briefs/chinas-social-credit-system-mark-progress-or-threat-privacy.

Kostka, Genia. 2019. “China’s social credit systems and public opinion: Explaining high levels of approval”. New Media & Society. https://doi.org/10.1177/1461444819826402.

Li, Haixia. 2017. “央行副行长陈雨露:加快推进个人征信业务牌照发放工作”. [deputy director of central bank Chen Yulu: Accelerate individual credit service licensing]. Last modified: April 20, 2017. http://money.people.com.cn/n1/2017/0420/c218900-29225034.html.

Wang, Lu. 2017. “央行征信中心汪路:社会信用体系建设十年利弊分析.” [PBoC Credit Center Wang Lu: Analyzing Pros and Cons of 10-year SCS Construction]. Last modified: December 11, 2017. http://www.sohu.com/a/209838738_649029.

Standing Committee of the 12th Hubei Provincial People's Congress. 2017. Hubei Provincial Social Credit Information Management Regulations. Last modified: May 4, 2017. https://www.chinalawtranslate.com/%E6%B9%96%E5%8C%97%E7%9C%81%E7%A4%BE%E4%BC%9A%E4%BF%A1%E7%94%A8%E4%BF%A1%E6%81%AF%E7%AE%A1%E7%90%86%E6%9D%A1%E4%BE%8B/?lang=en.

Standing Committee of the Shanghai People's Congress. 2017. Shanghai Municipal Social Credit Regulations. Last modified: June 30, 2017. https://www.chinalawtranslate.com/en/%E4%B8%8A%E6%B5%B7%E5%B8%82%E7%A4%BE%E4%BC%9A%E4%BF%A1%E7%94%A8%E6%9D%A1%E4%BE%8B/.

Zhejiang Provincial Development and Reform Commission. “浙江省公共信用修复管理暂行办法”. [Zhejiang Province Provisional regulations on Public Credit Correction]. Last modified April 11, 2019. http://www.zjdpc.gov.cn/art/2019/4/11/art_1808_1756638.html.

Xinhua Net. 2019. 水电费信息暂不采集,体现征信建设谨慎. [Water and Electricity Fares Payment Information Will Not Be Recorded, Constructing SCS Needs Prudence]. Last modified April 23, 2019. Retrieved from http://www.xinhuanet.com/comments/2019-04/23/c_1124401771.html.