China Is About To Reveal Important Economic Data At A Very Pivotal Time For The Country

To understand the allure that social engineering holds for Chinese leaders, you have to go back decades, to long before apps and big data. In the years after the 1949 Communist Revolution, the government assigned everyone to local work units, which became the locus of surveillance and control. Individuals spied on their neighbors while also doing everything they could to avoid black marks on their own dang’an, or government files. But maintaining the system required massive state effort and oversight. As economic reforms in the 1980s led millions of people to leave their villages and migrate to cities, the work unit system fell apart. Migration also had a secondary effect: Cities filled up with strangers and pianzi.

It didn’t take long for the central government to start thinking about gamifying good behavior. Leaders realized that “if we are going to have a market system that is supposed to be self-guiding, we also need to have self-guiding credit systems,” says Rogier Creemers, a scholar of Chinese law at the Leiden Institute for Area Studies in the Netherlands. In the late 1990s, a working group at a Chinese Academy of Sciences institute developed the basic concepts behind the social credit system. But the technology wasn’t advanced enough to support the Communist Party’s broader political designs.

Nearly a decade ago, I spent a few weeks in Suining, a mostly rural county in Jiangsu province, near Shanghai. Back then, local governance was not subtle. When officials decided to clamp down on people running red lights, they urged citizens to take pictures of offenders, whose images would later be featured on the local television channel.

Then, in 2010, Suining became one of the first areas in China to pilot a social credit system. Officials there began assessing residents on a range of criteria, including education level, online behavior, and how well they followed traffic laws. Each of Suining’s 1.1 million citizens older than 14 started out with 1,000 points, and points were added or deducted based on behavior. Taking care of elderly family members earned you 50 points. Helping the poor merited 10 points. Helping the poor in a way that was reported by the media: 15. A drunk driving conviction meant the loss of 50 points, as did bribing an official. After the points were tallied up, citizens were assigned grades of A, B, C, or D. Grade A citizens would be given priority for school admissions and employment, while D citizens would be denied licenses, permits, and access to some social services.

The Suining system was rudimentary, and it briefly sparked a national debate over what criteria should be included in a social credit score. But it provided a testing ground for what could work nationally. And however crude the letter grades were, they were less crude than what they replaced. Social credit in Suining was accompanied by a shift to subtler government messaging.

Since the Suining pilot, dozens of cities have developed their own systems. The power of technology had caught up. Eventually, these systems will be integrated into the nationwide government social credit system, which entails a significant logistical headache. To aid in the task, the government has enlisted Baidu, a big tech company, to help develop the social credit database by the 2020 deadline.

The Chinese tech companies have, in their way, helped to shift the Party’s attitude toward digital technologies. When the internet first came to China, bursting into people’s lives in the form of blogs and chat rooms, the Party saw it as a threat. Here was a place where people might speak their minds, join together, dissent. Leaders responded to these impulses through censorship and other aggressive tactics. But companies like Ant Financial have shown just how useful digital technologies can be in gathering and deploying information. Instead of merely reacting to content by banning search terms or shutting down websites, the government now collaborates with the private sector on facial and voice recognition technologies, along with artificial intelligence research.

In 2015, a few months after Zhima Credit debuted, Alibaba founder Jack Ma and 14 other executives traveled to the US with President Xi ­Jinping for his first state visit. Ma, along with leaders at Tencent and Baidu, also sits on the board of the Internet Society of China, a quasi-­governmental organization under the direction of the Party.

This strategic nexus is a delicate one, though. In recent months Chinese regulators have taken steps to exert more control over tech companies. Last August, the People’s Bank of China ordered mobile and online payment companies to connect to a central government clearinghouse, giving regulators access to transaction data. Two months later, The Wall Street Journal reported that Chinese internet regulators were considering taking a 1 percent stake in the major tech companies.

The dial showed that I had reached only a quarter of my potential. My score put me in the category of "Common Folk."

One possible scenario for a social credit partnership is that the central bank will oversee the development of a broader metric, like a FICO score, while letting companies like Ant Financial collect data to feed into that score. Whatever its eventual structure, the larger social credit system “will definitely be under the government’s control,” says You Xi, the reporter who wrote the book about Ant Financial. “The government doesn’t want this very important infrastructure of the people’s credit in one big company’s hands.”

Chinese people who have been branded untrustworthy are getting the first glimpse of what a unified system might mean. One day last May, Liu Hu, a 42-year-old journalist, opened a travel app to book a flight. But when he entered his name and national ID number, the app informed him that the transaction wouldn’t go through because he was on the Supreme People’s Court blacklist. This list—literally, the List of Dishonest People—is the same one that is integrated into Zhima Credit. In 2015 Liu had been sued for defamation by the subject of a story he’d written, and a court had ordered him to pay $1,350. He paid the fine, and even photographed the bank transfer slip and messaged the photo to the judge in the case. Perplexed as to why he was still on the list, he contacted the judge and learned that, while transferring his fine, he had entered the wrong account number. He hurried to transfer the money again, following up to make sure the court had received it. This time the judge did not reply.

Although Liu hadn’t signed up for Zhima Credit, the blacklist caught up with him in other ways. He became, effectively, a second-class citizen. He was banned from most forms of travel; he could only book the lowest classes of seat on the slowest trains. He could not buy certain consumer goods or stay at luxury hotels, and he was ineligible for large bank loans. Worse still, the blacklist was public. Liu had already spent a year in jail once before on charges of “fabricating and spreading rumors” after reporting on the shady dealings of a vice-mayor of Chong­qing. The memory of imprisonment left him stoic about this new, more invisible punishment. At least he was still with his wife and daughter.

Still, Liu took to his blog to stir up sympathy and convince the judge to take him off the list. As of October he was still on it. “There is almost no oversight of the court executors” who maintain the blacklist, he told me. “There are many mistakes in implementation that go uncorrected.” If Liu had a Zhima Credit score, his troubles would have been compounded by other worries. The way Zhima Credit is designed, being blacklisted sends you on a rapid downward spiral. First your score drops. Then your friends hear you are on the blacklist and, fearful that their scores might be affected, quietly drop you as a contact. The algorithm notices, and your score plummets further.

Trending Hairstyles

Source :

Inside China's Vast New Experiment in Social Ranking
Mapping India’s Economic Future: Jobs, Growth and Banking Reform
China's economic growth remains stable at 6.9% in the second quarter
Hysteria watch: The truth about China's economy
Does Canada have an income-inequality problem?
Why China’s Economy May Be In Better Shape Than We Think
China’s economic ‘bargaining chip’
Why A Lot of Africans Are Not On the Internet. The Answer is Not As Obvious
Markets Live: $A drops, ASX climbs
Why A War Between China And Vietnam Is Inevitable