An Economic Approach to China’s Social Credit System

Krause, Theresa; Fischer, Doris

doi:10.1007/978-3-658-29653-7_22

Cited by 13 publications

(9 citation statements)

References 39 publications

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“…The 2014 plan and the early practices of the SCS suggest that the Chinese government indeed considered the SCS a tech-enabled solution to social problems in the face of weak institutions. Krause and Fischer (2020) discuss the Chinese government's economic rationale for setting up the SCS. They argue that information transparency through the SCS reduces the risk inherent in choosing business partners, and the joint punishments and rewards incentivize trustworthy behavior by increasing the costs of noncompliance, which can be regarded as add-ons to the currently rather weak legal system and fragmented government enforcement apparatus.…”

Section: Social Credit Systems In Chinamentioning

confidence: 99%

Information Control and Public Support for Social Credit Systems in China

Kostka

Cao

2022

The Journal of Politics

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Critics see China's social credit system (SCS) as a tool of surveillance and repression. Yet opinion surveys in China find considerable public support for the SCS. We explain this puzzle by focusing on citizens' lack of knowledge regarding the repressive nature of digital surveillance in dictatorships, which can be attributed to (1) invisible and targeted repression associated with digital surveillance and (2) government propaganda and censorship further concealing its repressive potential. A field survey experiment on 750 college students in three Chinese regions shows that revealing the SCS's repressive potential significantly reduces support for the system, but emphasizing its social-order-maintenance function does not increase support. Observational evidence from the field survey and a nationwide survey of 2,028 Chinese netizens show that the support is higher if citizens knew about the SCS through state media. Our findings highlight the role of information and framing in shaping public opinion on digital surveillance.W hile digital technologies have made people's lives much more convenient, they provide governments with powerful new tools to intervene in society. By 2018, more than 30 countries (15 autocracies) are deploying digital surveillance tools to monitor, track, and surveil citizens, and this number is rapidly increasing. Among these regimes, China's surveillance state has drawn global attention because of its unprecedented size, sophistication, and international influence-more than 18 countries have adopted China's surveillance technologies as of 2019 (see Polyakova and Meserole 2019). Recently, particular heed is paid to China's social credit system (SCS), a surveillance system that rewards and punishes citizens on the basis of assessments of their "trustworthiness." 1 Although still in its pilot stage, the SCS has collected a large amount of information on citizens' personal, financial, behavioral, and even political conduct to construct their social scores (Wang 2017). Low-score citizens are banned from flights, trains, hotels, good schools, social benefits, government jobs, and so on. Critics raised serious concerns about the SCS's repressive nature, as it has been used to track and punish political activists and human rights lawyers (Gan 2019). 2 Yet, opinion surveys from China find considerable public support for the SCS (Kostka 2019) and for digital surveillance in general (Alsan et al. 2020;Su, Xu, and Cao 2021).Why would citizens in dictatorships support a powerful surveillance tool that could impose substantial political costs on them? The literature on surveillance and state coercion commonly emphasizes the liberty-security trade-off: citizens

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Section: Social Credit Systems In Chinamentioning

confidence: 99%

Information Control and Public Support for Social Credit Systems in China

Kostka

Cao

2022

The Journal of Politics

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“…Compared to the long history of CCR in these two countries, CCR is rather new to China: The corporate credit market only started to develop after the Chinese government initiated reform and opening up policies in the 1980s (Jentzsch, 2008). In this context, the People's Bank of China (PBoC, 人民银行) initiated CCR in a top‐down approach to counter a loss in significance of assessing creditworthiness and establishing trust via guanxi (关系, reciprocal personal relationships) (Krause & Fischer, 2020). However, numerous business scandals in the 2000s and 2010s (e.g., the scandal about melamine‐tainted milk powder in 2008) highlighted that the early initiatives by the PBoC to create structures of CCR were not sufficient to facilitate economic trust‐building (Dong et al, 2018).…”

Section: Resultsmentioning

confidence: 99%

“…A major recent development affecting the Chinese CCR system is the social credit system (SCS, 社会信用体系), which emerged as a response to existing difficulties in regulatory enforcement and a lack of trust across society (e.g., Ye, 2015; Yu, 2016). So far, the importance of the SCS as part of the country's CCR system and the regulatory system has attracted little attention, as most scholars to this date have focused on the implications of the SCS for individuals (e.g., Dai, 2020; Raghunath, 2020), even though the corporate arm of the SCS is much further developed (Krause & Fischer, 2020).…”

Section: Introductionmentioning

confidence: 99%

China's corporate credit reporting system: A comparison with the United States and Germany

Krause

Chen

Wassermann

et al. 2022

Regulation & Governance

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Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community.

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“…The privately run platforms, such as Qichacha and Tianyancha, provide general information on a company as well as nancial information, whereas the public databases, e.g., Credit China and the National Enterprise Credit Information Publicity System, focus on data related to legal enforcement (Krause et al, 2022). This indicates that information disclosure is promoted as an important means to reduce transaction costs in business in a country with a comparably weak legal and enforcement system to China (Krause and Fischer, 2020).…”

Section: Information Governance In Chinamentioning

confidence: 99%

Information Governance — a Missing Dimension in the Varieties of Capitalism Framework

Krause

Chen

Fischer

2023

Preprint

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Since the introduction of the Varieties of Capitalism (VoC) framework in 2001, the global economy has undergone fundamental changes due to the emergence of new capitalist economies as well as businesses’ increasing reliance on information and digitalization. This paper proposes adapting the VoC framework to these changes by adding information governance as a new dimension in the evaluation of political economies. It outlines this new dimension’s features and illustrates its manifestation using China as an exemplary case. Finally, a research agenda to substantiate these findings is outlined.

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An Economic Approach to China’s Social Credit System

Cited by 13 publications

References 39 publications

Information Control and Public Support for Social Credit Systems in China

Information Control and Public Support for Social Credit Systems in China

China's corporate credit reporting system: A comparison with the United States and Germany

Information Governance — a Missing Dimension in the Varieties of Capitalism Framework

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