China's Social Credit Initiative in a Global Context: First Attempt at FAQs

(Pix Credit 6th Tone))

I have started thinking through the issues around social credit generally, and the Chinese Social Credit project . I will be working through the issues and practices that are presented by the emergence of Social Credit theory--both in China (as an indigenous and quite complex set of policies, advances on political theory, and operational challenges), and in the rest of the world. To understand the shaping of law today (and soft law as well) one must understand social credit. To understand social credit, one must understand the evolving structures of the relationships, in law and politics, of the relationships between states, its masses, and the institutions through which it operates. 

This post provides a first cut at an FAQ. These are not so much questions frequently asked, but the sort of questions that ought to be asked with frequency--and then considered more dispassionately.  For more please see my colleague, Flora Sapio's post HERE. 

Index of Posts.



FAQ No. 1:


1. China’ social credit system has received a lot of bad press during the last 6 months, a majority of them directed at the social credit system for individual consumers. What would you say are the most common misconceptions about the system?

It should be emphasized that China’s social credit system has received a lot of bad press in the West, where it is not clear that social credit is understood. Or perhaps it is more plausible to suggest that the bad press is the consequence of fear and ignorance in the absence of much investigation. What the bad press does serve as good evidence of is the way it nicely illustrates the way that Western media and intellectuals have been projecting fears of changes in the West on the social credit system in China. This campaign to project Western fears of what may be occurring in Western society in the private sector onto the public sector projects in China is extremely helpful in understanding the social credit crisis of the West but it tells us little about the Chinese efforts to theorize and implement its own system in its national context. One must remember that in the West our society has been socialized into accepting a fairly extensive social credit system with direct effect on individuals for many decades. Private credit ratings, employee ranking and assessment (which might be shared), grocery store preferred customer and shopper cards, reward credit cards are all social credit system and quite embedded in intimate individual activity in the West. The Chinese social credit system may adapt many of these Western models.But it is too early to tell. In any case at least in some respects, the effects of social credit on individual consumers may, ironically, merely bring Chinese individuals up to an equivalent level of intrusion as that already well established in the West.

2. Can you explain a bit more about the current developments of the social credit system? (Or should I say multiple systems?

As I understood, the system is quite fragmented right now.) Chinese government at all levels are currently working on issues of scope and implementation. As is usual in the Chinese system, the state has produced a number of conceptual statements, and a number of governmental units have sought to start pilot and other programs. But the efforts to date have been tentative and to some extent quite contingent. One of the projects that teds to get some attention are those developed by the Shanghai government. These, to a large extent appear to suggest the framework of Trip Advisor and similar programs of data gathering and dissemination (with consequential effects ob producers).

3. How do you see China’s recent decision to pull back on plans to license big technology companies to develop social credit scores for consumers? How will this affect existing systems like Alibaba’s Sesame Credit?

We can only speculate here.But some speculation may well point to a number of possibilities. First, the pull back might suggest that it was thought necessary to reset the relationships in light of changing objectives. Second, it could mean nothing more than that the state is now considering engaging in the work itself. Third,. it might suggest that a new form of cooperation between state and private sectors might be in the works. Fourth, despite the allure of melodrama int he West with respect to all things Chinese, it likely does NOT suggest that the Chinese have rejected cooperate or licensing, or engagement to mutual benefit. Do not be surprised to see big technology intimately involved on the development of social credit projects. How that involvement will be structures though is for the moment an open question

There is a broader point to be made here as well. To speak only of Alibaba and its relation to the state in the context of social credit control systems is to pretend that this is an exclusively Chinese issue.  It is not.  One might also speak to the variations int he West--Google, Facebook, Amazon, among the most recognizable firm names have also been involved in developing relations with their respective governments and to similar ends. And not just targeting consumers.  The Western press has not ignored stories of the use by these firms (and others) of what is now understood in Chinese terms as "social credit" for the management of social opinions, expectations and consumer behaviors.

4. Do you think that the social credit systems devised by private companies have more interest in boosting consumption than increasing integrity as some have suggested?

I think it is a mistake to think about this issue in these binary terms. That certainly is NOT how the companies or the state likely thinks. To infect their logic with this framework merely distorts any analysis and reduces its value. Private companies, like the state, have interests in data for a number of reasons, some of which include consumption, and some of which include “integrity” issues (which was emphasized in the official pronouncements to be sure). Both private companies and the state also have strong interests in data as a means of responding to demand and in developing better strategic planning. Both are interested in social credit as a means of managing internal institutional cultures and of affecting and managing consumption, and better responding to both. Both are interested in social credit as a means of better engaging with the elaboration of cultural, economic and political narratives through which people understand and respond to the world. The levers of that engagement are produced through social credit derived data. But the judgements are more complex. And both might well be interested in social credit as a way to be more responsive to their consumers and other stakeholders while remaining rue to their institutional ideologies.

5. Some reports on China’s social credit system for companies mentions the following potential negative impacts to the local market: costs of compliance with government regulations, immature technology leading to unfair scores, risks to proprietary data both from government and from hackers, and opaque algorithms for calculating social credit (e.g., here). In your opinion, what is the most serious potential negative impact?

Litanies of negatives remind me of how risk averse people react to innovation and in the protection of the status quo. The litany of negatives reminds me of the negatives that were so clearly powerful a century ago when one spoke about the “revolution” that might evolve from an automobile culture. Those negative impacts appear laughable in retrospect—especially those which find an echo in the negatives associated with social credit: technology and delivery, compliance costs, corruption, bad purpose, and error of application. Indeed one could agree with all these negatives and find them largely irrelevant as negatives. These suggest current challenges to the development of the system—but none of these suggest fundamental problems that cannot be overcome.

6. In your opinion, can the system be an effective tool in combating fraud and corruption?

It is possible that social credit might be effective in combating fraud and crime. It it is also as likely that it will create additional possibilities for fraud and corruption. Again the automobile analogy—autos made it possible for police to deliver services faster and more effectively, but they also provided criminals with a new weapon to broaden and expand criminal enterprises.

7. Do you expect other countries will try to emulate China’s social credit system?

It is dangerous to try to read the minds of states—if only because each state is itself an aggregate of very many individual agendas and institutional imperatives. If the social credit system can be effectively implemented, and if it can be transposed into other national cultures in a way the is compatible to ruling ideology, then the answer is yes. And in my opinion, social credit is already poised to become a dominant mode of managing behavior all over the world.

8. The Chinese government has announced that artificial intelligence development strategy is going to be a part of a broader field of ‘integrity’ and ‘trust’. What role will AI play in the system?

Artificial Intelligence is the latest of a series of stories popularized in the press to scare ( and mobilize) mass opinion to some end (e.g., here and here). But the answer is: it depends. AI can be understood as a means of reducing administrative discretion to algorithm that can be made to exercise choice within parameters. Governments have been trying to do this with individuals for centuries. As an aid to disciplining discretion AI has potentially useful application. As a means of avoiding responsibility, or of hiding behind machine decision making to avoid individual responsibility (or governmental responsibility) then AI poses a danger to the integrity of any system that would so “wash their hands” of governance, in the fashion of Pontius Pilot.

9. Is there a danger of big data or algorithmic profiling and what might be the consequences?

The danger of profiling exists today without the benefit of big data. Bog data and algorithms merely enhance the human propensity to essentialize and sort humans by investing specific recurring data bits with significance. The danger is that the profiling—the prejudice of investing data with consequence ground din specific characteristics will become more efficient. More dangerous still is the willingness to invest data with a kind of unassailable quality that makes challenging data or algorithm impossible.

10. China does not have a good track record of keeping data private. How would you evaluate efforts so far to safeguards data privacy within the social credit system?

This question actually masks a more interesting one: the essence of social credit is grounded din transparency. But the data on which its judgments are based are grounded in privacy concerns. The contradictions of this simultaneous importance of transparency and privacy creates sloppy analysis and even sloppier understanding of the role of privacy and exposure in social credit (in China and in the West). China does not have a good track record of keeping data secret—true enough, but usually people who make that criticism then also criticize China for being a state that is obsessed with secrecy. Indeed, much press coverage of China is grounded in a fundamental critique of the effectiveness of its state secrets laws and its unwillingness to share information. So the underlying question is slightly different—to what extent is China willing to sacrifice the privacy of individuals to preserve the privacy and objectives of its social credit system? The Chinese have indicated a determination to treat data with some sensitivity. The integrity (and effectiveness) of social credit will depend on this. I suspect that China may be better at respecting this secrecy—not within the state, but among the public.