On April 8, 2019, Prof. Zhou Lin, Executive Director of the Intellectual Property Center of the Chinese Academy of Social Sciences, presented background information and more profound connections to the Chinese social credit system under the title “On the way to Credit” at the ITM in Münster.
This topic had recently been the subject of extensive press coverage, but now the ITM was able to dispel some of the myths of Chinese scoring systems. After a short and warm welcome by Prof. Dr. Hoeren, Prof. Lin first spoke about the background and the current status quo of the social credit systems in China, later on about their concrete current practice. Finally, he concluded with an insight into Chinese data protection law and gave a short summary.
The idea of evaluating people and companies according to criteria such as trustworthiness, ability to pay, etc., was not a new one and originated in 2002, when China was struggling with so-called triangular debts that paralysed the system. Defaults by companies and unpaid wages created the motivation to introduce binding scoring systems. Under changing governmental supervision, regulations were introduced to regulate the handling of data and subsequently to develop social credit systems. From the “Government Information Disclosure Bill” and the “Regulations on the administration of credit reporting industry” of 2013 to the Network Security Law of 2016 and the E-Commerce Law of 2019, a wide range of changes in data protection and data security have been adopted.
In the second part of the lecture, the two companies Ant-Mark and Baidu were introduced and introduced to their practice of social credit systems. Ant-Mark is comparable to eBay and evaluates the users according to their usage behaviour, for example by the things they buy and how punctual they pay. An individual score is then determined for each person, indicating how likely the rated person’s future good behaviour is. If this score is high enough, many conveniences follow; applying for visas for foreign countries becomes much easier, check-ins or checkouts at hotels are more informal, even bank loans are easier to obtain with a good score. The score indicates how trustworthy a person is considered to be based on the data collected about them. Baidu, on the other hand, could be compared with Google and is responsible for the verification and auditing of companies. Depending on how extensively a company is verified by Baidu, the company receives a better certificate. These range from orange (lowest verification level) to blue (highest verification level). If there are problems with the delivery or quality of ordered goods, buyers can contact Baidu directly: The buyer gets his money back without having to contact the specific company again.
Finally, Prof. Lin reported on the Chinese data protection regulations. In China there are nationally binding rules on how data may be collected, how it must be stored and secured, under which conditions it must be deleted and how it may be used in general. These are detailed regulations for the companies, which are supplemented by internal company rules.
After the lecture, the high interest of the participants was reflected in the many questions that were asked by the audience. Among other things, it was anecdotally discussed that even driving over a crosswalk would be punished with a worse score in the social credit systems. These, in turn, were already being used by foreign embassies themselves to simplify visa traffic.
According to Prof. Lin’s assessment, the forms of the Chinese social credit systems have so far been received very favourably overall and have been perceived as very effective in particular.