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Society & Culture

“Not Even One Step”: China’s New Emphasis on Social Credit

May 20 , 2019
  • Qin Xiaoying

    Research Scholar, China Foundation For Int'l and Strategic Studies

On the lips of everyday Chinese citizens as well as in the rhetoric of official pronouncements, talk of rules, blacklists, and honesty has grown along with terminology like “personal credit regime.” At the second Belt and Road Forum on International Cooperation, Chinese President Xi Jinping said, "Rules and credit are cornerstones for the effective operation of the international governance regime, and [constitute] premises for the development of international economic and trade relations."

In official Chinese media, references to "credit" and "honesty" started before Xi assumed the presidency. Fifteen years ago, during the Hu Jintao administration, the Communist Party already proposed "strengthen[ing] the entire society's social credit awareness" and establishing a complete social credit system within five years.

Unfortunately, work towards those goals has not proceeded smoothly. On the contrary, as China’s economy has grown more and more vibrant, dishonesty in such forms as contract breaches has gone rampant. Increasingly, “discrediting” behaviors have emerged in all realms of socio-economic life: from production to circulation, finance, taxation, government procurement, e-commerce, food safety, public health, social security and employment; on the parts of individual citizens, and even in law enforcement. Some of this malfeasance has violated even the basic, minimum standards of a normal society.

Economic sins such as counterfeiting by some Chinese enterprises in both production and circulation, as well as financial cheating by some individuals, has not only shaken public confidence in the government's capabilities, but to some extent has damaged the country's international image.

Such phenomena have cultivated a strong sense of urgency in the Chinese leadership to complete a society-wide credit system, and pressed it to take decisive measures to prevent all kinds of fraud and harness new mechanisms of social credit. The outcome has in the first place been the compilation of various "blacklists" meant to curtail discrediting behavior on the parts of ordinary citizens and enterprises. Such credit mechanisms have proven effective in such realms as finance and transport.

Following principles put forward at the Communist Party of China (CPC)'s 18th National Congress, the State Council made a plan to establish a complete social credit regime between 2014 and 2020. According to Premier Li Keqiang, such a regime will particularly target such public concerns as pervasive cheating, and "make it difficult for the dishonest to make one single move throughout the entire society."

In implementing this social credit regime, the Party has given priority to ensuring honesty among local governments and their functionaries — a logical move for a country with such a mammoth governance apparatus.

The most problematic aspect, however, is business dishonesty, which has been a foremost target in the implementation process — hence why it has become routine to hear of businesses’ credit records.

Why has the Chinese government taken social credit as the foundation for its proposed system? The reason is simple: it is because “discrediting” acts in a huge variety of realms — regarding medical services, social security, labor and employment, education and sports, in areas as diverse as intellectual property and defaults on rural laborers' wages — have led to corrosive, negative influences across the whole of Chinese society. Enhancing and completing the credit records of normal citizens is a challenging yet necessary task in China. A country without a credit regime comprising the average citizen’s records can't be a modern one.

Meriting special attention, we should note that the overall plan of the Chinese social credit regime takes judicial credibility as an important component. To a certain extent, this move is a concession that judicial authority has occasionally been compromised by insufficient credibility, undermining public faith in fairness and justice.

In sum, the Chinese emphasis on social credit under Xi Jinping’s leadership, including individual credit records, is based on pressing needs emerging from China’s rapidly growing and diversifying economy. This also derives from China's present position in the global economic chain, which determines that China must follow the essential rules of world economic relations. The creation of the social credit regime is a good thing for both China and the rest of the world, because it is a sign that Chinese economic conditions and social demands have advanced past an earlier stage of primitive mercantilism, where credit and credibility were ignored. No longer—now China is raising its standards.

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