China’s social credit system is more complex than most people realize

Interview with Qian Sun, an independent Chinese journalist living in Berlin. She is the author of an article: “China’s social credit system was due by 2020 but is far from ready”.

Qian, you’re living in Germany. But do you still have citizenship in China? 
Yes, I’m Chinese citizen, I live in Germany. I have a resident permit in Germany, but my nationality is Chinese. 

Is there an online platform where Chinese can learn their credit score?Theoretically, yes. Everybody should be able to check their scores. But not every province has the system installed. Some of the provinces have the system and Chinese can go to the municipality and check your score. But for some provinces, this service hasn’t been activated. So a lot of people don’t even know their scores. 

Do you know your score?  
I don’t have one, because a lot of people who are abroad don’t have a score. Even if you’re Chinese nationality, but you live somewhere not in China, you don’t have a score. 

My home province, it’s Shanxi province, that is not super developed. There are other pilot provinces, more economically developed areas. Because my province is not one of the pilot provinces, so there people also don’t have scores. 

In your article you wrote: “Chinese citizens face dozens of systems that are largely incompatible with each other.” What kind of systems?
For example, right now different ministries of China have different systems of …regulation, contribute to scoring system or to be a part of it. And every municipality, for instance, different cities, provinces have pilot projects and own systems. If I live in Beijing, it’s not like Beijing’s city government has a score for me, and in the same time national government has a score for me. It’s not like that. But it’s more like in Beijing they have a couple of systems that are regulated only in Beijing. But then in Shanghai, they have a different scoring system.

And if you move from Beijing to Shanghai, this two system right now are not talking to each other. So you can’t really track or transform your score yet. Also, it’s only based on the municipality level, city level. Besides, in the different ministries they try to have different systems. For example, the National House Commission (Ministry), they come up with idea, if you donate blood you can contribute to your scoring system, you can earn some points.    

The author of China’s social ideology is Lin Junyue, who said that “China needed a social credit system in order to help China’s transition to a credit economy (where non cash-based tools like credit cards would be essential). Now in 2021, does China have a well-functioning credit system? Are these expectations justified, thanks to the credit system?
Answering to the question: has China a credit system that works or looks good in terms of a credit system like a financial credit system? Yes, there are certain ratings, for example, financial. So under the financial group, that is a private credit system that’s working and people can refer to their credit system — is called SESAME credit. You don’t have to, but you can sign up voluntarily if you have a good credit, then you can get some small loans from certain banks. So it’s used as a tool for borrowing money or buying stuff. You want to buy a phone, you want to pay it in several parts, like several hundred every month. Then you can use this application, SESAME credit, to help you with that. But it’s not compulsory and it’s not connected yet with the national (social) credit system. 

The overall system is not established yet. And also in the category of financial credit, which is more or less established, that you have private ones that I mentioned — SESAME credit — but you also have the one that runs by a central financial system and is connected with Chinese banks. For example, the banks’ employees will be able to check that system. Because everybody has a system. If a person gets pension, they can look at your financial scores. But the one that we think about as a credit system that combines both the financial credits and a real social credit, it doesn’t really exist.  

Can you explain to readers what Lin’s eleven is?
It is Lin’s 11 because Lin was one of creator of 11 projects, where “Social Credit System” stands at the center. The eleven points are: credit legislation, government, market and financial credit regulation, building a credit system for businesses and individuals, credit services associations, professional qualification examination system, university education in credit management, credit services development, credit education project, city and industry credit subsystem, and social credit system construction planning. 

There’s big research group…behind them, behind Lin as well. And they want to build up a very comprehensive system that includes everything. And so you have created legislation which basically is the legislative part of the whole credit system, and it stands for, for example, the legal framework and legal background and legal foundation that enables the credit system to work. So that’s one of the most important parts. And then you have government market and a financial credit regulation, which works a bit more, you know, the credit system in general inside of the financial markets where you can regulate, and not companies, or you can give credit scores to companies. And you can read about your company. Everybody can check up their scores. And you have the sort of building a credit system for business and individuals. And it’s a bit similar as the credit systems that we’re looking at right now. So for individuals, you have the ones that you have financial side of the score. You also have the social set of the scores. 

And the credit service associations basically are a bit like leveraging the power of civil societies. And so you have different pillars. You know, you have the government pillar and then you have the private pillar (which are companies), and you also have the pillar of civil societies and organizations. And also Lin’s thinking about professional qualifications, examination system. So, for example, (it) also combines with a university education. So a bit like if you want to have a working credit system, then you want people that have the knowledge about it and be able to work hard. So they want to build a whole vocational training program for that, and also university degrees for that so people can actually have a degree in it. Or, you know, have a vocational training in college so they can work in it. 

Inside of the credit system, you can not only reach individuals, but also you can reach companies at the same time, different government entities. For example, as a citizen, you can also give scores to your municipal government and also the national institutions and national government. So that’s kind of the whole, like overall, very comprehensive credit system that Lin and his colleagues (envisioned).

Can you explain in brief what a social integrity score is (社会 诚信 一系) from China’s National Development and Reform Commission (NDRC)? What kind of functions does NDRC execute?
What is NDRC: it’s a macroeconomic management agency under the State Council, which has broad administrative and planning control over the economy of Mainland China. 

The difference between (that and) the social credit system. No social credit system is actually an overall comprehensive framework. And there are mainly two. So one is led by the central bank, and they are the ones led by the DRC, …called Social Integrity Score — the ones that everybody is kind of afraid of. You have to behave well in a social context, like help out people to cross the street, donate blood. And that’s kind of what shows that people has integrity. So that’s why it’s called a social credit integrity score. But also, as I explained in the article, there’s two systems intertwined. And it’s kind of confusing …in which province this is executed and in what province is not. So the one led by the DRC is more towards these social spectrums of credit systems or credit scores, compared to the one …led by the central bank. 

How has the international community reacted to a social integrity score?
In general, of course, people are very critical about it. They’re afraid that it’s…going to be a new level of surveillance and authoritative state. But at the same time, I think I know also some people think that it’s more nuanced than what it shows. It’s not just black and white. There are many layers and meaning, kind of complexity to this topic. In my opinion about it, if the four full spectrum of the criticism is actually there, that it’s very dangerous. But right now, it’s not there yet. This is very far from what people imagined. You know, it’s not a black mirror kind of scenario yet. 

In 2014, the central government published the first major announcement about the social credit system. Can you give a short review of it, the main idea?
It just highlighted why China needs a credit system because there is a problem. If people cannot trust each other anymore, as lack of trust in the society. And also the necessity that in the future, that if they want to be a credit society where, for example, you can use credit cards and all this, you need to build a common sense of trust. And in order to have that trust, they want to have this social credit system where everything can be rated so everybody can have a better understanding. If you want to borrow money, if you want to lend money. And also if you want to have certain trust of certain brand or certain company, then there is always a system that you can refer to. So the whole point is to increase the level of trust in Chinese society. 

China’s social credit system integrates both dimensions of “financial credit” from the central bank and “integrity credit” from the NDRC. Are these institutions connected with each other?
There’s two credit systems right now that is not connected to each other, and the details are not calculated together. So right now, it’s kind of parallel in a way that each of them has their own way of doing stuff. But at some level, for example, at the municipal level, if they build up a credit system inside the city and they have to refer to both off the system. So overall, it’s not connected. But they are on some level, of course, working together. 

Can you explain how “financial credit” is fulfilled in the lives of Chinese citizens? Advantages for people with the high score and disadvantages for blacklisted individuals?  
So for the financial credit, for example, was the one that operated by the central bank. It’s a bit like Schufa, for example. It is a system in Germany, which is also a credit system and a bit like the credit system in the US, for example. If you want to take a loan for individuals, then the banks, the employees, the bank will refer to that credit system to see if you have enough credit and how much long you can get. And so it’s similar, but for the blacklisted individuals, it’s a bit different. 

The blacklisted individual is from the local central court that in the scheme of social justice system development, they come up with certain laws. And if you violate those laws that you will be blacklisted… and once you’re blacklisted, and then you will be restricted of high consumption. And this, for example, you cannot take a business class, a flight. You cannot live in very expensive hotels, and obviously you cannot borrow money from the bank, and so on. But this is not right now. It’s operated only when you’re violating certain laws, and then the local court will sentence you to that. But is not completely connected to the social criticism yet. So it’s part of the grand scheme or grand plan, but is not connected directly with the social criticism because the social criticism will be as we think. It’s not there yet. 

What is the implementation on the municipal level? 
On the municipal level, the thing is that not every city has the social protection system set up yet. You have several pilot cities and they have the system set up. But some of them, like majority of the cities in China right now, don’t have a system like this criticism in place. So it’s very difficult to say the overall implementations. And in some cities, for example, even though they have a credit system, the citizens are not aware of them or they don’t use it. So it’s very varied right now in the implementation.

How are the different state, commissions and local authorities influenced by the definition of “credit”?
Is that, in general, the central government would like to have the credit system in place. And they’ve been making it as a big project and the focus of the work of the central government. Then different state commissions and also local authorities, they would like to appear, as you know, that they are doing their job well and they’re basically answering the calls from the central government — so they want to perform well, so they will come up with different ideas and they will come up with different regulations. That seems like, OK, they are working really hard on this project. So then sometimes they go too far and they include certain daily activities, for example, jaywalking across the red lights into the system, and it became a bit too big. Or it’s even not tolerated by the media or by the Chinese people anymore, so it kind of gets stretched, and also the law, the central authority realized that. That’s why also in the new regulations published at the end of last year, they also emphasized this problem that says, OK, we really need to define what is credit and what is a violation of certain credit and to have overall legal frameworks for that. And China right now, it doesn’t have an overall legal framework for social credit. And that’s also the problem, why local authorities or different state commissions are entitled to stretch the definition of credit. So that’s one of the most serious problems that they have to address. 

What is the social opinion among Chinese related to the credit system?
As I’ve mentioned before, that actually a lot of people don’t even aware of the credit system, so they don’t think that it influences them. So I would say a lot of people don’t even know that. And then there are people who are really, really scared of that. People who are more aware of, you know, it sounds like a dystopian kind of scenario, but that’s a small percentage, I would say. And there is also some people are supporting it for sure, because they think, OK, Chinese society definitely lack of trust. And that’s why the government has to do something to increase the level of trust in the study. So they think it’s a good thing that people will be punished and people will be encouraged.

There were some misunderstandings about “bad behavior” from the side of local authorities. How does government plan to fix it?
It’s also kind of uncertain, that the government has to come up with right now a legal foundation to have a law, basically a national law to regulate it. And then it can be defined, you know, what exactly is bad behavior. And then it can sort of stop the local authorities or local governments to stretch the definition of credit and also to set boundaries. So that’s what the government is planning to do right now.