THE HUMAN RIGHTS IMPLICATIONS OF CHINA'S SOCIAL CREDIT SYSTEM.

• Date: 01 January 2021
• Author: Rettinger, Lizzy

1. Introduction

   When the topic of a social credit system is brought up, people generally assume the subject relates to the episode of Black Mirror called Nosedive. (1) in the show, everyone has a personal score that is constantly changing based on ratings they receive from people they interact with throughout the day. (2) The main character is obsessed with these ratings, and for good reason, as a person's score has significant socioeconomic benefits or consequences. (3) While there are some similarities between the dystopia portrayed in Black Mirror and the Social Credit System (SCS) being implemented in China, it would be unfair and inaccurate to portray them as the same. (4)

   This paper discusses China's SCS and how it complies, or fails to comply, with Chinese law and human rights obligations under international law. (5) Part II provides background on the SCS, including a brief history of the program's development, its purpose, and how it operates. (6) Part III discusses the relevant legal framework and identifies areas where the SCS seemingly diverges from established law. (7) Part IV introduces the human rights guaranteed under international law and considers the problems raised by the SCS. (8)

   Finally, Part V posits that while there are legitimate concerns about China's implementation of the program, there are benefits and potential for a positive future with a social credit system. (9)

2. What is China's Social Credit System?

   1. Brief History of the Social Credit System

      The idea of "social credit" has been present in China in some form for centuries. (10) In the early 2000s, the concept was introduced in the context of increasing financial creditworthiness during economic reforms. (11) In April 2007, the State Council established a joint conference for the construction of the SCS. (12) The primary nature of this initiative was still economic and focused on three overarching goals--providing better credit information records in the market economy, creating credit information systems, and developing credit service markets. (13) At this point, the current form of the SCS started to emerge as various provinces established pilot programs. (14)

      In response to public outcry over fraud and the lack of trust in Chinese society, the 6th Plenum of the 17th Party Congress was dedicated to culture and identity in 2011. (15) This further strengthened the call for the construction of the SCS to foster sincerity in society with regard to commercial affairs, as well as social and political morality. (16) A large step towards this came in 2012 with the revision to the Civil Procedure Law for the People's Republic of China. (17) Under the new revision, individuals that did not carry out legal obligations could be prohibited by a court from leaving the country, have a new entry placed in their credit file, and have their names published in the news. (18) Further, in 2013 the Supreme People's Court issued regulations concerning Publishing Name List Information, which provided more detailed regulations for a comprehensive blacklist. (19)

      In 2014, the present-day SCS was defined in the Planning Outline for Construction of the Social Credit System. (20) The plan is divided into two main components--first, creating a dataset by integrating currently disconnected data held by government and nongovernment entities; and second, implementing a "carrots and sticks" system to increase the sincerity of individuals and organizations. (21) The timetable through 2020 provided for the realization of several major objectives. (22) The first objective was to create the legal and regulatory framework for the SCS. (23) The second objective was to build infrastructure for credit investigation and oversight. (24) The third objective was to foster a flourishing market built on credit services. (25) The final objective was to complete the mechanisms for incentives and punishments. (26)

      A follow-up to the 2014 Planning Outline came in the 2016 Memorandum of Understanding (MOU) regarding the Joint Punishment System, which listed restrictions for individuals and businesses. (27) These restrictions impact individuals' access to economic opportunities, their ability to receive government subsidies, their eligibility to serve in senior positions in certain organizations, their eligibility for honorary titles, and their ability to purchase real estate. (28) Also issued in 2016, the Guiding Opinion from the Central Committee General Office and State Council General Office confirmed the MOU's substantive measures and provided more detailed procedural standards for the blacklist system. (29) It also broadly identified four priority areas of "serious trust-breaking behavior"--1) behavior that seriously damages people's health, lives and security; 2) behavior that seriously damages the market order or fair competition and normal order in society; 3) refusal to fulfill legal obligations; and 4) refusal to fulfill national defense obligations. (30) At the end of 2017, the National Development & Reform Commission and the People's Bank of China selected "model cities" that had made large strides in the local implementation of a social credit system. (31) By mid-2018, forty municipal and provincial governments established pilot social credit systems. (32)

      Currently, the consolidated national system that was envisioned does not seem to have materialized. (33) Instead, the SCS should be viewed as three fragmented initiatives comprised of national blacklists, social credit systems in pilot cities, and social credit systems employed by financial institutions. (34) Perhaps the most significant difference between government and commercial credit systems is that participation in government programs is mandatory, while individuals are permitted to opt-in or opt-out of the commercial systems. (35) Further, government programs are set up as a mechanism of social management by improving law enforcement and regulatory practices, whereas commercial programs function more as loyalty schemes with benefits for participants. (36) This paper focuses primarily on the government-run program and considers the implications of a centralized SCS, but touches on important aspects of provincial and commercial programs as well. (37)

   2. Purpose and Function of the Social Credit System

      In establishing the SCS, Chinese leaders sought to develop a national reputation system that would "allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step." (38) To do so, the program utilizes a rating system to assess the trustworthiness of citizens in keeping their promises and complying with legal rules, moral norms, and professional and ethical standards. (39) The SCS rates both individuals and entities, including foreign workers and companies in China, and possibly even Chinese citizens overseas regardless of their place of residence. (40) In pursuit of this goal, the system focuses on four areas--1) sincerity in government affairs; 2) commercial sincerity; 3) societal sincerity; and 4) judicial credibility. (41)

      For the SCS to work, the first step is to ensure that everyone individuals and organizations--can be identified. (42) To accomplish this, the "uniform social credit code" was established and provides unique identifiers and real name registration systems for digital platforms so that the government can connect data to individuals and businesses. (43) The legal basis for this arrangement can be found in the 2003 Identity Card Law, which mandates that individuals be assigned identity cards with a unique lifelong identifying number. (44) Additionally, the administrative "Five Licenses into One" regulation required the administrative, tax, organizational, social security, and statistics registration numbers of corporations be combined so that each entity has a single identifying number. (45)

      The next step is to aggregate political, administrative, commercial, social and judicial scores into a single score. (46) The most common form of collection is the transfer of records generated by "various responsible agencies" to dedicated information systems. (47) The scope and categories of the information collected is determined by local governments, with most prohibiting the collection of certain sensitive personal data and some permitting the collection of data from non-state service credit providers, industry associations, media, or other members of the public. (48) An aspect of this system that raises privacy concerns is that consent to the collection of information is not required. (49) In some jurisdictions, individuals are entitled to access their data and dispute inaccuracies. (50)

      Once the information is collected, it is published on the national Credit China site or other provincial sites like Credit China (Beijing). (51) The publication of information is done to effectuate "social discipline" and "market discipline." (52) individuals can be placed on either a Blacklist or a Redlist--the former is for individuals that engaged in "bad" behavior and the latter praises those for "good" behavior. (53) The consequences of being placed on a blacklist can include being prohibited from air or train travel, banned from certain holidays and hotels, banned from enrolling in the best schools, and having your dog removed. (54) on the other hand, inclusion on the Redlist leads to benefits such as expedited travel applications, boosted profiles on dating sites, discounts on bills, better interest rates, and rent without deposits. (55) Prior to being entered on a blacklist, notice must be given to the individual. (56) Upon fulfillment of the legal obligation related to the placement on the blacklist, the individual's information and associated penalties must be removed within three days. (57)

      In a paper published in 2019, researchers conducted an analysis of two information platforms--Credit China and Credit China (Beijing). (58) The Credit...