China’s Social Credit System: Genesis, Framework, and Key Provisions

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Minxin Pei

Sunday, March 1, 2020

The Chinese government launched an ambitious program to build a social credit system in 2014.  During the last six years, the State Council issued several key documents that seek to define the objectives and key parameters of such a system.  Based on these documents and reports on the progress of the system in the media, it is evident that the Chinese government has made significant progress in conceptualizing and specifying the functionalities of its social credit system.  At the moment, Beijing’s current approach remains experimental, seeking to gradually improve the design and capabilities of the system through trial-and-error at the local levels.  Judging by the ambitious goals set forth in the State Council’s outline document issued in 2014, actual progress in building the system may be limited due to the immense technological and administrative challenges. 

The social credit system the Chinese government is building has received enormous attention in the international community.  Many have sounded an alarm that this system, which will contain data encompassing all aspects of the lives of ordinary Chinese citizens, will allow the Chinese party-state to develop and maintain surveillance capabilities imaginable only in George Orwell’s 1984.  Yet, despite the hype and fear about China’s social credit system, scholarly research based on solid evidence is still in its infancy.  As a result, much remains unknown about this system, in which the Chinese government has invested enormous political capital, bureaucratic energy, and financial resources.  Evidence based on official documents and media reports suggests that, as with its tried-and-true approach to institutional innovation, the top Chinese leadership may have set ambitious goals in terms of the capabilities of this system and the speed at which it can be constructed, but real work in building and testing the system is being carried out in various pilot programs in dozens of localities.  At this stage, provincial and local authorities follow the broad guidelines set by Beijing in the promulgation of the relevant programs and regulations, but they still retain significant discretion in designing and operating their respective systems.

 

Given the immense technical and administrative difficulties in constructing what might be reasonably called “the mother of all surveillance systems,” such an incremental approach seems to make practical sense.  But the enormous diversity of Chinese local jurisdictions, such as their administrative capabilities, financial resources, and technological sophistication, will likely create serious complications in building an integrated and reliable national social credit system.  This process will probably require much more time than the Chinese leadership initially expected.  Although a fragmented and less-effective social credit system may strengthen the power and reach of China’s surveillance state, there are potential pitfalls of a flawed system tasked to monitor and sanction government workers, companies, and ordinary citizens.  Besides the obvious potential for corruption, abuse, and violation of the rights and privacy of the subjects of the surveillance, even a relatively small error rate in terms of data collection and processing could seriously harm the welfare and lives of a frighteningly large number of innocent people.

 

In the following pages, we will briefly analyze the political impetus driving the construction of a social credit system and describe the broad guidelines and objectives established by the top Chinese leadership.   In future issues of CLM we will further examine how provincial and municipal authorities are implementing Beijing’s directives, evaluate China’s efforts, and analyze the potential impact on the surveillance capabilities of the Chinese party-state.

 

Political Impetus

 

The Chinese state undertook serious and sustained efforts to build various platforms or systems to collect data on its citizens and businesses long before the State Council announced its plan in 2014 to construct a national social credit system.  The most well-known is the “Golden Shield Project.” launched in 1998, that, during the last two decades, has provided the Ministry of Public Security immense data-collection and hi-tech surveillance capabilities.  Due to the “Golden Shield Project,” the Chinese police now have instant access to key personal data, including in many cases biometric information, on most adult Chinese citizens.  Voice recognition, ubiquitous video cameras, facial recognition, and broadband communication networks have also boosted the ability of the Chinese police to fight crime and keep tabs on individuals and groups considered potential threats to rule by the Chinese Communist Party (CCP).

 

However, the CCP aspires to build an even more comprehensive system that can help monitor everyday socioeconomic activities, collect and maintain a vast database on such activities, and use the information to shape the behavior of corporate entities and private citizens.  After the rise of Xi Jinping in November 2012 and the turn toward hard authoritarian rule one year later, the push for a national social credit system gathered momentum.  The first mention of such a system appeared in what was touted as Xi’s bold blueprint for economic reform approved by the Third Plenum of the Eighteenth CCP Central Committee in November 2013. Buried in the third section of the CCP Central Committee’s Decision Concerning Some Major Issues in Comprehensively Deepening Reform (中共中央关于全面深化改革若干重大问题的决定), is a brief and innocuous reference:  “We will establish and improve a social credit collection system to commend honesty and punish dishonesty” (建立健全社会征信体系,褒扬诚信,惩戒失信).[1] Although inclusion of this policy goal in the plenum decision did not attract much attention at the time, the intent and ambition of the Chinese government became clear seven months later, in 2014, when the State Council released a “Planning Outline” announcing comprehensive construction of a social credit system for the 2014–2020 period (社会信用体系建设规划纲要(2014—2020年).[2]  In July 2019, the General Office of the State Council issued what appeared to be a follow-up document, “A Guiding Opinion on Accelerating the Establishment of a Social Credit System and Building a Credit-based Monitoring System” (国务院办公厅关于加快推进社会信用体系建设构建以信用为基础的新型监管机制的指导意见).  Although this opinion is largely similar to the “Planning Outline” issued by the State Council in 2014, the 2019 opinion has less authority, even though its content is more specific. The two most noteworthy features of the “Guiding Opinion” issued in 2019 are designation of the National Development and Reform Commission (NDRC) as the leading coordinator in the building of the and endorsement of many of the measures adopted from the various pilot programs that took place during the previous five years.[3] 

 

Before we analyze the conceptual framework, objectives, policy tools, and implementation of this plan, it is worth noting that the CCP’s top leadership placed very high priority on the project, as seen by at least four meetings convened by the Central Leading Group for the Deepening of Overall Reform (中央全面深化改革领导小组) in 2016 to discuss and approve the key documents related to the social credit system as well as by Xi’s personal instructions given at these meetings (Xi is chairman of this central leading group).[4] For example, at the meeting of the central leading group on April 18, 2016, Xi’s spoke of establishing and improving a coordinated system to incentivize creditworthiness and punish and deter acts of untrustworthiness, and to speed up construction of social creditworthiness.  He emphasized that the focus should be on problems of untrustworthiness in key sectors that harm the public interest and safety, elicit a strong public reaction, and have serious negative impacts on socioeconomic development (建立和完善守信联合激励和失信联合惩戒制度,加快推进社会诚信建设,要充分运用信用激励和约束手段,建立跨地区、跨部门、跨领域联合激励与惩戒机制,推动信用信息公开和共享,着力解决当前危害公共利益和公共安全、人民群众反映强烈、对经济社会发展造成重大负面影响的重点领域失信问题).[5]  At the central leading group’s meeting on November 1, 2016, when it discussed three key documents on social credit, Xi pointed out that establishment of creditworthiness encompassing government administrative agencies and officials, ordinary citizens, and e-commerce was a “crucial component” of China’s social credit system (加强政务诚信、个人诚信体系和电子商务领域诚信建设,是社会信用体系建设的重要内容).  Xi further stated that the project of building this system should begin with key sectors and groups (以重点领域、重点人群为突破口).[6]

 

Judging by the timeline of the rollout of relevant central government policies, documents, and provincial programs, Xi’s interest in and endorsement of a social credit system likely provided the necessary political impetus behind the accelerated implementation of the vision initially laid out in the State Council’s 2014 document.  In particular, the key State Council policies on the construction of the social credit system were all issued at the end of 2016, apparently after they were approved by meetings of the Central Leading Group for the Deepening of Overall Reform.[7] 

 

Objectives, Focus, and Tools

 

The most important document laying out the principle, framework, objectives, and implementation guidelines was issued by the State Council in June 2014.[8]  Titled “Planning Outline for the Construction of a Social Credit System (2014–2020) (社会信用体系建设规划纲要(2014–2020年), the outline offers a valuable glimpse into the social credit system as conceived by the Chinese government.  Here we can only highlight its most noteworthy features.

 

In terms of objectives, the outline lists ambitious but relatively broad goals.  Given the immense technical and administrative challenges, it is understandable that Chinese leaders wanted to retain sufficient flexibility.  According to the “Planning Outline,” by 2020 China will have “basically” accomplished the tasks of establishing “foundational laws, regulations, and system standards for social credit” (到2020年,社会信用基础性法律法规和标准体系基本建立). Additionally, a system of credit collection based on the sharing of credit-information resources, with coverage over the entire society, will be constructed. A system of regulating credit will be basically built; a system of servicing the market for credit information will be relatively perfected, and mechanisms for incentivizing creditworthiness and sanctioning and deterring untrustworthiness will be fully functioning.  Construction of governmental, social, and judicial creditworthiness will have made clear progress, and the level of satisfaction in the marketplace and the society will have significantly risen.  Credit consciousness in the society will have increased widely, the credit environment for economic and social development will have improved significantly, as will have economic and social order (以信用信息资源共享为基础的覆盖全社会的征信系统基本建成,信用监管体制基本健全,信用服务市场体系比较完善,守信激励和失信惩戒机制全面发挥作用。政务诚信、商务诚信、社会诚信和司法公信建设取得明显进展,市场和社会满意度大幅提高。全社会诚信意识普遍增强,经济社会发展信用环境明显改善,经济社会秩序显著好转).[9] Six years after the State Council issued this document, progress appears to be mixed.  Although the central government and the local governments have promulgated numerous laws and regulations on social credit, it is difficult to gauge the progress on many aspects of the system.  In all likelihood, it would be a stretch to claim China has attained the ambitious objectives laid out in the 2014 State Council document.

 

Much analytical attention has focused on the potential of China’s social credit system to enhance the party-state’s surveillance of ordinary citizens and, to a lesser extent, surveillance of corporations.  But in reality, the State Council document also identifies surveillance of government entities and workers as an area of focus.   Overall, the Chinese government is attempting to use the system to monitor activities in four sectors.

 

1. Government Entities and Workers

 

The State Council document identifies as a long-term objective the establishment of a system of sharing information obtained by the government in its administrative activities.  Such a system aims to improve the government’s administrative efficiency and services.  The government will also take the lead in utilizing credit information and credit products in granting licenses, conducting purchases, appointing, promoting, and supervising officials, and performing other administrative responsibilities.  The document envisions the positive impact of this social credit system on enhancing the state’s capacity to enforce regulations and to improve the collection of statistics and local fiscal management.  Most intriguingly, this system will monitor individuals classified as government workers or civil servants (公务员).  Under the heading “strengthening the management and education of the creditworthiness of government workers” (加强公务员诚信管理和教育), a creditworthiness file for each government worker will be established.  This file will include reports on relevant personnel matters, records of administrative integrity, annual performance reviews, and conduct related to violations of law, discipline, and contracts (个人有关事项报告、廉政记录、年度考核结果、相关违法违纪违约行为).[10]  The information collected will be an important basis for evaluating, appointing, rewarding, and punishing officials.

 

In December 2016, the State Council issued the “Guiding Opinion on Strengthening the Establishment of Creditworthiness in Government Affairs” (关于加强政务诚信建设的指导意见) and provided more details on the information that will constitute the creditworthiness of government workers.[11]  It turns out that credit records will exist for government workers (and governments at all levels), consisting of judicial judgments against them for violations of law, regulations, and contracts, as well as acts of untrustworthiness, administrative penalties, disciplinary sanctions, and accountability action (违法违规、失信违约被司法判决、行政处罚、纪律处分、问责处理等信息纳入政务失信记录).  Such credit records will be collected and publicized by the leading agency responsible for construction of the social credit system at all levels of government.  “Credit China,” (信用中国), the official national website, will gradually disclose the records of untrustworthiness of governments at all levels and of government workers in accordance with the laws and regulations.[12] 

 

2. Commercial Sector (the Corporate Social Credit System)

 

The document devotes more space to commercial entities and activities than to government entities, personnel, or ordinary citizens.  It identifies a wide range of activities about which information will be collected for the corporate social credit system.  Among other things, the corporate social credit system will gather information on safety, fraud, loan repayments, compliance with tax regulations, construction, government procurements, corporate disclosures, advertising, professional services, and e-commerce. (We will analyze the corporate social credit system in a separate essay in a future issue of CLM.)

 

3. Social Sector

 

The social sector in the State Council document appears to be a broad, if not overlapping, category that covers activities performed by government, non-profit entities, and commercial establishments.  For example, healthcare, family planning, the social safety net, education, scientific and technological research and development, environmental protection, and clean energy are included in this sector, even though the Chinese government is the dominant or the sole actor in performing these activities and services.  But this sector also includes areas in which both public and private actors play important roles, such as culture, sports, tourism, and the Internet.  Two provisions in the document merit special attention.  Social (non-governmental) organizations are singled out as an independent category.  The envisioned social credit system will rely on an existing information database on these organizations to “accelerate and improve information on the registration and supervision of social organizations, perfect the system of disclosing information on social organizations, guide the openness and transparency of the operations of social organizations, and normalize activities to disclose information about social organizations (依托法人单位信息资源库,加快完善社会组织登记管理信息。健全社会组织信息公开制度,引导社会组织提升运作的公开性和透明度,规范社会组织信息公开行为). Another provision specifically involves the Internet.  According to the document, real-name registration will be gradually implemented and a system of evaluating “Net creditworthiness” (网络信用评价体系) will be set up to evaluate the creditworthiness of Internet companies and of users on the Internet, (对互联网企业的服务经营行为、上网人员的网上行为进行信用评估,记录信用等级).  A credit file covering Internet firms and Internet users will be established, and the government will actively promote a system of sharing Internet credit information with related credit information in other social sectors and will widely apply Internet credit information in all social sectors (建立涵盖互联网企业、上网个人的网络信用档案,积极推进建立网络信用信息与社会其他领域相关信用信息的交换共享机制,大力推动网络信用信息在社会各领域推广应用).  Most ominously, an “Internet credit blacklist” will be compiled to include firms and activities that engage in Internet fraud, fabricate and spread rumors, and violate other people’s legal rights and interests (建立网络信用黑名单制度,将实施网络欺诈、造谣传谣、侵害他人合法权益等严重网络失信行为的企业、个人列入黑名单).  Restrictions on online activities and denial of market entry will be imposed on the blacklisted entities (including individuals).  The relevant departments will be notified and such entities will be publicly exposed (对列入黑名单的主体采取网上行为限制、行业禁入等措施,通报相关部门并进行公开曝光).

 

4. Individuals

 

The 2014 State Council document makes only a brief reference to individuals (natural persons), stating that the envisioned system will rely on information resources on ordinary citizens collected in the state’s demographic database to establish and perfect the credit records on the social and economic activities of ordinary citizens.  The system will cover all natural persons in China.  Special attention will be given to the establishment of professional creditworthiness for “key groups” (重点人群职业信用建设), such as civil servants, legal representatives of companies, lawyers, accounting professionals, registered accountants, statistical professionals, tax professionals, auditors, assessors, senior executives of listed companies, healthcare workers, teachers, science researchers, media workers, tour guides, and other professionals.

 

In a subsequent 2016 State Council document focusing solely on natural persons the Chinese government provides more details on the parts of the social credit system that will directly affect such persons. Titled “Guiding Opinions of the General Office of the State Council on the Strengthening of the Construction of a System of Individual Creditworthiness (国务院办公厅关于加强个人诚信体系建设的指导意见), the document lists the key requirements for a social credit system focusing on individuals.[13]  In addition to reiterating that the “key groups” identified in the 2014 document will remain the focus of this system, the highlights of the “Guiding Opinions” include the following:

 

(1) The establishment of a registration system, based on individual real names, and unified national social credit identification numbers (公民统一社会信用代码制度), based on the current national identification number: The current national ID will also include the fingerprints of Chinese citizens. The new unified national social credit number will be used universally (公民统一社会信用代码全覆盖).  Special efforts will be made to promote use of the system of registration of individual real names on the Internet and for postal services, telecommunications, and financial accounts.

 

(2) The construction of mechanisms to record the creditworthiness of people working in “key areas” (重点领域) and collection, in a timely fashion, information about the creditworthiness derived from the activities of these individuals: Notably, the State Council will enlist non-governmental actors for the construction and operation of the new social credit system by directing that financial information databases and institutions or agencies engaged in collecting individual credit information vigorously expand the collection and services of the credit information of individuals working in these key areas.  Industry associations and chambers of commerce are encouraged to establish and improve the credit files of their members (金融信用信息基础数据库和个人征信机构要大力开展重点领域个人征信信息的归集与服务。 鼓励行业协会、商会等行业组织建立健全会员信用档案).

 

(3) Privacy, data protection, and credit repair: The “Guiding Opinions” direct that rules be drawn up to specify the limits and procedures for inquiry and use of individual credit information.  Regulations will be strengthened to ensure that databases on financial credit information and on credit-collection agencies will carry out their activities in accordance with the rules and regulations.  Enforcement will be strengthened against the leaking, falsification, destruction, sale, and illegal provision of individual credit information.  Financial institutions, credit-collection agencies, Internet companies, big data firms, and mobile app development companies will be placed under priority supervision and control to normalize (规范) their activities in the collection, provision, and use of individual information.  A system of correcting and repairing individual credit will be set up, as will a system governing dispute resolution and administrative review.  Activities such as the timely fulfillment of contracts, volunteering, and charitable donations can be applied to repair social credit.

 

(4) A unified national individual public credit information glossary (个人公共信用信息目录), classification standards (分类标准), and norms for the sharing and exchange (共享交换规范): A national individual credit information database will be built on the basis of platforms that share credit information.  The national platform of credit information sharing will gradually become the basis for a system of connecting and checking individual public credit information across regions, jurisdictions, and sectors (跨区域、跨部门、跨行业个人公共信用信息的互联、互通、互查机制).  Such a system will provide information inquiry services. Specifically, the government will explore the establishment of a mechanism to build individual public credit information and to manage creditworthiness scores.  In areas and sectors where suitable conditions exist, the social credit system will provide services to agencies that collect individual credit information.  A rough reading of this provision suggests that the emerging social credit system has a potential for commercialization.

 

(5) A joint reward and sanctioning mechanism: To make social credit a meaningful instrument of control, the Chinese government seeks to reward those with high social credit and to punish “seriously untrustworthy individuals” (严重失信个人).  The government will provide favorable treatment in education, employment, and the creation of businesses (创业) to individuals with superior (优良) credit.  Those who have a superior credit record or maintain a record without any violations for three years may receive “green lane” treatment in applications for administrative approvals.  “Seriously untrustworthy individuals” in “key areas” (重点领域) will be subject to unspecified joint sanctions (联合惩戒).  Businesses are encouraged to provide discriminatory services to “seriously untrustworthy individuals.”  Acts of serious untrustworthiness include those that endanger the health and safety of the public as well as acts involving defiance of judicial and administrative authorities, malicious evasion of debt obligations, illegal fund-raising, telecom and Internet fraud, traffic violations, and failure to pay taxes.  Information about these individuals will be disclosed by governments at all levels with the help of the official national “Credit China” website[14]  In a separate document issued by the State Council in May 2016 titled “Guiding Opinions of the State on the Construction and Perfection of Systems of Joint Rewards for Creditworthiness and Penalties against Untrustworthiness and Acceleration of the Construction of Social Credit” (国务院关于建立完善守信联合激励和失信联合惩戒制度加快推进社会诚信建设的指导意见), the government spells out in greater detail specific rewards for superior social credit and penalties for untrustworthiness.  It seems that the penalties listed in the document are to be applied against individuals who have violated the terms of economic contracts or loans.  Such individuals placed under “exit control” (限制出境) are subject to restrictions in purchasing real estate, taking commercial flights, buying premium-cabin train tickets, taking vacations, and getting luxury hotel accommodations.  Commercial banks and other financial institutions will be guided to deny them financial services.[15]  Of course, it is entirely conceivable that similar penalties may be levied against individuals who engage in politically offensive acts that result in the impairment of their social credit.

 

In September 2016, the General Office of the Central Committee of the CCP and the General Office of the State Council jointly issued the “Opinions Concerning Accelerating the Construction of Credit Supervision and Warning and Punishment Mechanisms for Persons Subject to Sanctions for Untrustworthiness”  (中共中央办公厅 国务院办公厅印发《关于加快推进失信被执行人信用监督、警示和惩戒机制建设的意见》) providing in much greater detail the penalties against those who willfully engage in commercial default or fail to carry out judicial judgments.[16]

 

Credit Collection, Exchange, and Sharing

 

The State Council’s “Planning Outline” of 2014 lays out a series of measures to build a system with universal coverage and information-sharing capabilities. Of these, three warrant special attention: the construction of regional and sectoral information databases; the establishment of credit-collection systems; the promotion of exchange and sharing of credit information across sectors and regions.

 

1. Construction of Sectoral and Regional Databases

 

Key sectors (重点领域)will receive priority in the construction of databases on credit information.  According to the State Council, credit-information files will be established for entities and individuals involving the following sectors:  commerce, taxes, prices, imports and exports, workplace safety, product quality, environmental protection, food and health products, healthcare, intellectual property, logistics, construction, e-commerce, transportation, contract fulfillment, human resources, social protection, education, and scientific research.   

 

Regional databases will only include information pertaining to government administrative activities.  The goal is to provide access to credit information related to administrative matters for businesses, individuals, and credit-collection agencies.[17]  However, based on the local pilot programs and regulations, information databases set up by many local jurisdictions will contain information about the activities of commercial entities and private individuals.[18]

 

2. Construction of Credit-Collection Systems

 

The State Council does not explicitly define who will own and operate the “credit-collection agencies” (征信机构), but the reference to “social credit-collection agencies (社会征信机构) later in the section on information sharing indicates that they will include commercial and largely private entities.  Such agencies will, in accordance with the law, collect, process, and store the credit information of businesses, non-profit entities, and individuals.  The construction of systems of credit collection by these agencies should receive support from the (authorities in) the regions and sectors.  These credit-collection agencies will provide specialized services according to market demand.  In addition, they will expand utilization of credit reports in financial services and government administrative and enforcement activities.

 

In addition to the credit-collection agencies, the financial sector will establish its own unified credit-collection platform (金融业统一征信平台).  This platform will facilitate integration of the credit-information systems of the regulatory agencies overseeing banking, securities, insurance, and foreign exchange.[19]

 

3. Exchange and Sharing of Credit Information

 

The existing infrastructure of the credit-information system will be utilized to promote integration (互联互通), exchange, and sharing (交换共享) among various credit systems, with the goal of gradually forming a network of credit systems covering all credit entities, all types of credit information, and all regions in the country (逐步形成覆盖全部信用主体、所有信用信息类别、全国所有区域的信用信息网络). The exchange and sharing of information between the administrative credit-information system (政务信用信息系统) and the credit- collection system (征信系统) will be advanced according to law. The role of market-based incentives will be utilized to encourage society-based credit-collection agencies (社会征信机构) to integrate administrative and non-administrative credit information and to set up systems to provide differentiated credit-collection services. 

 

This provision indicates that the Chinese government envisions not only a social credit system with universal coverage and capabilities for information exchange and sharing but also a public-private partnership that will integrate government-operated systems and commercial systems (which will be incentivized to work closely with the government).[20]

 

Implementation

 

The “Planning Outline” of 2014 requires local and departmental authorities (各地区、各部门) to form task forces to formulate concrete measures to implement the outline.  These authorities are to conduct regular assessments of the progress in the construction of a social credit system within their respective jurisdictions.  Officials in charge of areas and departments with serious problems of untrustworthiness will be held accountable. Local governments will provide the necessary funding for the construction of the system and investment in the infrastructure of the system and in the demonstration projects.  Local governments and administrative departments are encouraged to launch pilot programs.

 

Three types of pilot or demonstration (示范) programs are mentioned.  First, regional comprehensive pilots (地方信用建设综合示范) will seek to build an integrated system with full regional coverage within one jurisdiction.  Second, pilots of regional cooperation will be established to promote joint regional collaborative mechanisms in the exchange and sharing of information and in the operation of joint reward and penalty programs.  Third, a trial credit reporting system will be implemented in the “key sectors” (重点领域和行业)listed in the “Planning Outline.”

 

A system of inter-ministerial meetings will coordinate tasks for the building of the social credit system.  Progress in constructing the social credit system will be an important component in the evaluation of administrative performance.  The inter-ministerial meetings will be held regularly to report on progress and to study and resolve major problems.[21]

 

Conclusion

 

Based on the key official documents analyzed above, we can draw several preliminary conclusions about the CCP’s objectives and policy instruments in the construction of an integrated social credit system capable of collecting, processing, storing, and utilizing information about the activities and behavior of government agencies, employees, commercial entities, non-profit organizations, and private individuals.

 

First, the party has invested enormous political energy in this priority project and will continue to develop this system regardless of external criticism and concerns.  The benefits of such a system in supervising government officials, regulating commercial entities, and monitoring private individuals far outweigh the potential costs in terms of financial resources and international reputation.

 

Second, although the party may have set broad and ambitious objectives for a social credit system, it apparently does not have answers to many technical and administrative challenges.  This is perhaps the most important reason why Beijing has permitted many local pilot or demonstration projects, which will likely help Beijing refine and improve the design and functionalities of the system.  However, acquiring all the necessary information to improve the system is likely to be a far more difficult task than anticipated.  As a result, the establishment and operation of an integrated national system may require a considerable period of time.

 

Third, most of the progress to date has occurred in the commercial sector, where it is easier to collect information about the behavior and activities of companies or individuals. Professionals are the priority subjects at this stage.  We can expect that in the future the Chinese government will apply the lessons learned from the commercial sector to other sectors.

 

Fourth, the Chinese party-state will enlist the assistance and participation of private-sector actors in the development and operation of its social credit system.  Specifically, the services of credit-collection agencies and technology firms will constitute a significant part of the system.

 

Finally, as designed, the social credit system will be fully capable of universal coverage and surveillance.  Even though official documents contain few overt references to the application of this system to the maintenance of social stability (except for the mention of an “Internet credit blacklist), the vague and broad definition of “untrustworthiness” (失信) suggests that, once fully constructed and functional, China’s social credit system could easily be deployed to place the country’s businesses and individuals under a high level of surveillance and to deter behavior and activities the party deems undesirable or threatening.

About the Contributor

 

Minxin Pei, editor of China Leadership Monitor, is Tom and Margot Pritzker '72 Professor of Government. He is also non-resident senior fellow at the German Marshall Fund of the United States. Pei has published in Foreign Affairs, Foreign Policy, The New York Times, the Financial Times, the Wall Street Journal, Project Syndicate, Fortune.com, Nikkei Asian Review, and many scholarly journals and edited volumes. He is the author of China’s Crony Capitalism: The Dynamics of Regime Decay (Harvard, 2016); China's Trapped Transition: The Limits of Developmental Autocracy (Harvard, 2006), and From Reform to Revolution: The Demise of Communism in China and the Soviet Union (Harvard, 1994).  Pei formerly was senior associate at the Carnegie Endowment for International Peace (1999–2009) and assistant professor of politics at Princeton University (1992–1998).  He was the Library of Congress Chair in U.S.-China Relations from January to August 2019.

 

 

 

 

Notes

[1] “中共中央关于全面深化改革若干重大问题的决定,” http://www.gov.cn/jrzg/2013-11/15/content_2528179.htm.

[2] “社会信用体系建设规划纲要,(2014—2020年),” http://www.gov.cn/zhengce/content/2014-06/27/content_8913.htm.  In September 201, the CCP’s Central Commission for Guiding Cultural and Ethical Progress issued a similar document on promotion of a system of creditworthiness.  See “中央文明委关于推进诚信建设制度化的意见,” http://www.sxcredit.gov.cn/gj/93648.jhtml.

[3] “国务院办公厅关于加快推进社会信用体系建设构建以信用为基础的新型监管机制的指导意见,” http://www.gov.cn/zhengce/content/2019-07/16/content_5410120.htm.

[4] These meetings took place on April 18, June 27, October 11, and November 1, 2016.

[5] “习近平总书记关于信用建设的论述摘编,” http://credit.pingxiang.gov.cn/news/MDMp.

[6] The three documents being reviewed and presumably approved at the meeting were the “Guidelines on Strengthening the Construction of Administrative Creditworthiness” (关于加强政务诚信建设的指导意见), “Guidelines on Strengthening the Construction of a System of Individual Creditworthiness,” (关于加强个人诚信体系建设的指导意见) and “Guidelines on the Comprehensive Strengthening of Construction of Creditworthiness in the E-commerce Sector) (关于全面加强电子商务领域诚信建设的指导意见), http://www.gov.cn/zhengce/content/2016-12/30/content_5154820.htm; http://www.gov.cn/zhengce/content/2016-12/30/content_5154830.htm; http://www.gov.cn/zhengce/content/2016-12/30/content_5154830.htm.

[7] These policy documents are, “Guiding Opinions on the Strengthening of the Construction of Administrative Creditworthiness,” (国务院关于加强政务诚信建设的指导意见), “The General Office of the State Council Guiding Opinions on the Strengthening of the Construction of the System of Individual Creditworthiness” ( 国务院办公厅关于加强个人诚信体系建设的指导意见), “The General Office of the Central Committee of the Chinese Communist Party and the General Office of the State Council Opinions on Accelerating the Construction of an Enforcement Mechanism FOR Supervision, Warning, and Penalties Against Individuals under Sanction for Untrustworthiness”  (中共中央办公厅 国务院办公厅印发《关于加快推进失信被执行人信用监督、警示和惩戒机制建设的意见》), and the State Council Guiding Opinions on the Construction and Perfection of A System Of Joint Rewards for Creditworthiness and Penalties against Untrustworthiness and Acceleration of the Construction of Social Credit” (国务院关于建立完善守信联合激励和失信联合惩戒制度加快推进社会诚信建设的指导意见). http://www.gov.cn/zhengce/content/2016-12/30/content_5154820.htm; http://www.gov.cn/zhengce/content/2016-12/30/content_5154830.htm; http://www.xinhuanet.com/politics/2016-09/25/c_1119620719.htm; http://www.gov.cn/zhengce/content/2016-06/12/content_5081222.htm

[8] “社会信用体系建设规划纲要(2014—2020年)的通知,” http://www.gov.cn/zhengce/content/2014-06/27/content_8913.htm.

[9] Ibid.

[10]Ibid.

[11] “国务院关于加强政务诚信建设的指导意见,” http://www.gov.cn/zhengce/content/2016-12/30/content_5154820.htm.

[12] Ibid.

[13] “国务院办公厅关于加强个人诚信体系建设的指导意见,”

http://www.gov.cn/zhengce/content/2016-12/30/content_5154830.htm.

[14] Ibid.

[15] “中共中央办公厅国务院办公厅印发《关于加快推进失信被执行人信用监督、警示和惩戒机制建设的意见》,” http://www.xinhuanet.com/politics/2016-09/25/c_1119620719.htm.

[16] “社会信用体系建设规划纲要,(2014—2020年),” http://www.gov.cn/zhengce/content/2014-06/27/content_8913.htm.

[17] See, for example, “Opinions on Implementing an Individual Credit System in Jiangsu” (江苏省加强个人诚信体系建设的实施意见), http://www.jsgwyw.org/2018/0404/54115.html; the expansive scope of the amount and type of information to be collected and the potential for misuse can be seen in the “Interim Measures on Management of Individual Public Credit Information Issued by the Government of Feng County in Jiangsu” (丰县自然人公共信用信息管理办法). The document was originally available on the website of the county government, www.chinafx.gov.cn, but it is no longer accessible.

[18] “社会信用体系建设规划纲要,(2014—2020年),” http://www.gov.cn/zhengce/content/2014-06/27/content_8913.htm.

[19] Ibid.

[20] Ibid.

[21] https://www.nybooks.com/daily/2019/11/26/how-chinas-rise-has-forced-hong-kongs-decline/