The reporting that follows include both the中文版 (the original Chinese language version), and with thanks to the marvelous translation skills of Flora Sapio, the English version. The originals may be accessed here:
Zhonghongwang, 25 April 2018
Photo: Zhonghongwang Reporter Zhang Quan
Foreign experts attending the seminar included Professor Larry Backer, and Professor Flora Sapio, formerly a honorary fellow at the CIW at the ANU. They respectively reported on the status of the construction of the U.S. and European credit system. Zhu Shaoming, the President of the Foundation for Law and International Affairs, was among the experts attending the seminar.
According to reports, Professor Backer’s presentation on the U.S. credit system was chaired by Professor Shi Xinzhong, director of the Credit Legislation and Credit Evaluation Research Center of Capital Normal University. In the afternoon, Professor Flora Sapio’s presentation on the European credit system was chaired by the director of the Beijing Municipal Academy of Social Sciences Survey and Research Center. Lu Xiaocheng moderated the presentation.
The Chinese experts participating to the seminar include:
Liu Zhaobin. President, China Quality Promotion Association, former General Engineer at AQSIQ
Fang Zhulan. Professor, School of Economics, Renmin University of China
Lin Yuyue. Director, Credit Academic Committee of China Market Society
Han Jiaping. Director, the Institute of Credit Research, Ministry of Commerce
Liu Weiguang. China International E-Commerce Center, Ministry of Commerce
Wang Yong. Researcher, Credit Department, Department of Market Order, Ministry of Commerce
Guo Wenbo. Department of Finance, Department of Credit, National Development and Reform Commission
Han Zhongliang. Researcher, Beijing Academy of Social Sciences
Dou Xiangxiang. Professor of Finance, Peking University
Jing Hua. Secretary General, Beijing Xinxin World Social Innovation Development Center
Sun Ping. Associate Research Fellow, Center for China Rule of Law, East China University of Political Science and Law
Sun Zhiwei. Professor, Beijing University of Materials Science
Xiao Weizhi. Deputy Dean of the Credit Risk Management College of Xiangtan University
Lian Guangyang. Lecturer at the Faculty of Law of Xiangtan University, former a doctoral student at the Università di Roma Tor Vergata, Italy.
Xie Wei. Lecturer at Xiangtan University Law School, Doctor of Law, at the Università di Roma “La Sapienza”, Rome, Italy.
Jin Shanming. Associate Researcher, Institute of Law, Chinese Academy of Social Sciences
Fu Hongyu. Associate Dean, School of Law, Beijing Foreign Studies University.
Zhang Jinbo. Beijing Changping Science and Technology Park Development Co., Ltd.
Wu Gaochen. Professor and Deputy Dean, School of Politics and Law, Capital Normal University
Xie Xinshui. Professor and Deputy Dean, School of Management, Capital Normal University
Dan Weili. Associate Professor, College of Political Science and Law, Capital Normal University
Zhonghongwang, 25 April 2018
Photo: Zhonghongwang Reporter Zhang Quan
Zhonghongwang – Beijing, April 25 (Reporter Wang Jingrong) "After the 19th Congress, social integrity (chengxin) and the integrity of the judiciary have become very important. Especially social integrity, is the component of China’s social credit system on which the largest part of Western studies focus”, stated Professor Larry Backer on April 25, during the Seminar on “The United States and European Credit Systems and their Implications for China”. [He] pointed out how “in China, within the construction of a credit system, social integrity constitutes only a small part. This is where Western countries misunderstand China’s social credit system”.
An American Perspective on the Construction of China's Integrity (chengxin) System
During the seminar, Professor Larry Backer first introduced the characteristics and achievements of China's credit system construction from the perspective of an American legal expert, and he emphasized that two core issued are involved in this system, from its leadership to its implementation. The first one is its systematic, comprehensive top-level design. The second one is strengthening and improving the implementation process through the demonstration and combinations of areas and fields. Larry Backer pointed out that the government is not merely a central leader in decision-making, but it will also play a key role in all key areas. Special attention must be paid to the Party’s core leadership position in the entire issue, and “social credit will become the government’s point of departure in key areas, [and so] government pledges will be respected, and [government] will further supervise the behavior of civil servants.”
The Core Content of the Hidden Construction of Credit in the United States
"In the United States there is no unified platform to collect and monitor credit information credit information.", Professor Larry Backer emphasized in the introduction of the US credit system construction, to provide a reference: "In observing the technical behavior of the US credit system, it should be noted that the issues in its superstructure and ideology (yishi xingtai) are hidden within its technology. This is the opposite of the situation in China”. Larry Backer pointed out that in the West, there is no model similar to China's emerging social credit system. [The Western social credit system] is mainly a model of governance risk management and compliance, which contains three core contents. The first is a data-driven management and control system; then a system for identifying and responding to targeted risks; and a system needed to identify and satisfy legal and social norms, but this is the purpose of the other two aspects. On this basis, technical developments, including supervision, reporting, data collection, integrity packaging and distribution of data, and the linkage between analysis and the principled behavior of targets, are used to formulate reward and punishment systems.
The Ultimate Purpose of the Operation of the U.S. Credit System
Professor Larry Backer combined a case in which a company in Wisconsin in the United States has implanted chips for credit information collection and behavior management in its employees. His analysis pointed out that the guidelines and ultimate purpose of establishing and operating the US credit system are for risk control and compliance. They include, first, at the law enforcement level, a system that can be applied to different aspects, such as a system generated by specific algorithms for different groups of people through data collection. For instance, in the field of law enforcement [such a system] can effectively supervise or control the illegal conducts of some sex offenders. Second, is promoting information transparency, and it is used to supervise the good performance of government and enterprises. Third, in terms of organizational and individual behavior control, behavior control is achieved through credit (xinyong). Fourth, is the influence and the promotion of a credit culture. Larry Backer pointed out that the ultimate goal of these efforts is clarify the responsibilities of individuals, governments or other actors.
The Challenges of U.S. Style Social Credit Construction
Talking about the issue of information collection in the U.S. social credit system, Larry Backer mentioned the management of the Pennsylvania State University through algorithm design and data analysis, pointing out how due to the need for risk management, the school’s hiking association can exist, but it cannot organize hikes. [He pointed out how] the data algorithm is is not neutral, and not biased. “In many cases, there is a supervisory goal behind the application and analysis of data, and it is hoped that a certain result can be achieved through the application of a certain part of the data.”
“Everyone may have discovered two typical characteristics of the US social credit system. One is that there is no unified government supervision; the other is that data analysis and application are entirely market-driven.” Professor Larry Backer also described an analysis of the challenges credit construction in the United States is facing. The first one is the challenge of system construction, including data collection and integrity. The second one is given by management issues, including the coherence of government behavior and the integration of private credit branches, and how to solve the problem of administrative abuse. The third one is given by political issues, such as the integration with political or regulatory standards outside of China, including their application to Chinese companies operating overseas, but also by data collection, data retention, and the integrity of data. The fourth one is an interpretive challenge, including data interpretation and the algorithm itself. The fifth one is whether the review system itself will be damaged by its embedding in the social credit system.
Larry Backer finally pointed out that the relevant components of credit development in the western society are already well developed, but there are still typical differences between the West and China, that is, data is mainly collected on individual business behavior data collection, and there is no unified government supervision. This point is very much different from China.