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 introduces and very briefly considers the ways in which China will be seeking foreign assistance or expertise in the construction of its social credit system. It suggests that to understand the construction of social credit in China one must look to patterns of inbound foreign direct investment rules in China, and to the incorporation of social credit systems from the West into China and back again.
Index of Posts.
The catalogue is a legal document listing what industries are open for foreign investors. It has been revised and re-released many times since its creation in 1995. The new edition is the 7th version since the catalogue’s inception. The official 2017 catalogue was published on the 28th June 2017 and extended nationwide on the 28th of July 2017. Through the catalogue, several industries are becoming more deregulated and opened up for foreign investors. These deregulations involve removing shareholding limits or nationality requirements for partners on certain sectors for foreign investors as well as changing some restricted industries to permitted industries. The 2017 catalogue is structured into two categories; the ‘Encouraged’ category and the ‘Special Administrative Measures for the Entry of Foreign Investment’ (Negative List). The Negative List is split into two parts; restricted and prohibited. (Direct Foreign investment in China, p. 1)
Under the 2017 catalogue the sectors ‘Credit investigation and rating services’, ‘Railway passenger transportation’ and ‘Cargo handling’ are moved to the permitted category.ç
The currently used 2017 catalogue sees the following regulations for the sector ‘Services’. For the services sector, foreign investment cannot exceed 50% but this does not include e-commerce which can be wholly foreign owned.
The currently used 2017 catalogue sees the following regulations for the sector ‘Market investigations.' Endeavors into this sector must be Equity joint venture or Cooperative joint venture. For ratings survey of radio or television broadcasting majority shareholder must be Chinese party.
Tech giant Tencent is gradually testing and expanding its “social credit” system that will give users a numeric rating based on their spending habits and social connections, two years after rival Alibaba launched its own social credit system. . . . For both Tencent and Alibaba, there are several incentives to launch social credit schemes. For one, China’s consumers are massively underserved in the financial sector—most financial services cater to large businesses, and no credit rating company has achieved ubiquity for individuals. It’s also a marketing opportunity—users who spend more time or money on Alibaba and Tencent services can increase their scores and get benefits. For example, Ant Financial recently launched a scheme with Ofo, a popular bike-sharing company, allowing users to ride bikes without first paying a deposit. ("China’s Tencent is quietly testing a “social credit score” based on people’s online behavior").