By Dragan Vitorovic
The data has become “the new oil”, offering tremendous opportunities for growth, development, and – surveillance. States and companies are extensively researching the various possibilities for the exploitation of data , while insisting on the notion that the Fourth Industrial Revolution offers global affluence and a starting point of a new era in policymaking.
The dogma of quantification and the principle that everything can be measured, systemized and presented through numbers have set the stage for the expansively quant-based policymaking. Additionally, the philosophy of hyper-rationality and the reliance on the neutrality of algorithms have become the prevailing forces in many policymaking circles.
However, it is just partially true: bounded rationality is a more appropriate term that describes the patterns of human behavior and the algorithms can be biased-prone, especially in cases with limited transparency.
Furthermore, the global system has moved from the unipolar to multipolar, mildly decreasing the power of the USA relative to the challenging powers. The most prominent challenging power, not exclusively in military terms, that is still in the phase of extensive development, is China. Arguably, China is the most serious competitor of the United States, in terms of technology, trade, and influence. The two powers have entered the technological arms’ race a long time ago while being bonded in a mutually reinforcing tech and trade relationship.
There is an increased interest globally in Chinese policy (a significant part of this can be attributed to the fear of Chinese dominance) and the Chinese Social Credit System, sometimes referred to as “the karma quantification”. This system is presented as one of the most controversial technology-policymaking nexuses, which is often used to juxtapose the Chinese political model to liberal democracies in the West and to explain the Chinese present-day mindset.
The Mechanism
The Social Credit system is often described as the national system of reputation, designed and managed by the central Chinese government. The system uses scoring tables, technological infrastructure, and human resources to project itself to every aspect of life, adjusting the behavior and habits of China’s citizens and business entities.
The negative component of the system has been extended through the “black lists” in judicial and financial system (Court Black List and Public Debtors’ Black List as the main black Lists), relying on the databases from various providers. Everything is linked to the citizen’s ID number, and every citizen starts with 1000 points within the system of data sharing, although it has not been stated what type of data sharing is the underlying mechanism of the system.
There are certain discriminatory levels between the low credit score and being blacklisted, with various monetary or behavioral-based options that may improve the credit score.
It is often stated that the Chinese “karma quantification” approach can be fully automatized and technology-led, due to high adoption levels of electronic payments and digitalized services, relying on the infrastructure of Ali-Baba systems, We Chat and, from recently, the facial recognition technology. Namely, the projected value of Chinese mobile payment service is to be seen at 96.73 trillion USD in 2023.
This is the signal that China may have the design of moving to a cashless society in the close future, and that partnership between the state and the private sector in China is more than solid.
Additionally, since China has set the goal to become the superpower in the use of Artificial Intelligence until 2025, it would be logical to expect that China would first deploy surveillance tools based on AI internally. However, this is not the full picture and the system is much more reliant on human resources than often presented in reports and media.
The Social Credit System is not a unified and centralized system, at least not yet. It consists of 70 scoring systems with three main inputs – traditional inputs, social inputs, and online inputs, where local governments have their system of social behavior metrics, and some of them have been adjusted, like the Suining system, which was mainly designed for storing of punishment scores and their consequences. Suining was later incorporated in the Rongcheng system, considered to be the most developed.
To make things even more complicated, the private sector has developed and implemented the similar mechanisms adjusted for the shopping habits and commercial uses. According to some reports from the Western media, the private-based systems are often used interchangeably with the Social Credit System, which could be misleading. Eventually, the metrics and the results coming from the private sector will be incorporated in the all-encompassing system in close future, including data from the local governments, financial hubs, and cities. For now, they simply co-exist, and it is open to speculation to what extent they had already been integrated.
Supposedly, the only system that completely relies on the use of Big Data and Artificial Intelligence is Sesame Credit System. The Chinese technological leap forward in surveillance has been complemented from the start with the traditional surveillance methods, using the citizens who oversee their neighbors, friends, and relatives, noting down every undesired behavior. It seems that the more things change, they truly remain the same.
Political and economic dimension
The application of one such system should lead to the more efficient resource allocation, restoration of trust amongst citizens and their re-education. Additionally, the system deploys significant human resources to achieve mass control, as a self – perpetuating mechanism. The system is, according to sources, allowing for corruption and distorts its own rules, when trying to be applied to the officials of the Communist Party.
The enforcement of various laws, mainly in the security domain, hardly enhances the rule of law in China, so the Social Credit system can be both weaponized and politicized, from micro to macrospheres of the society.
The main psychological tools of the system, public shaming, and the auto-censorship phenomena may efficiently lead to the behavior that is solely managed by the Party officials. The economic and societal implications are huge – imagine the invisible communist hand attempting to control every activity of its citizens – it is relatively easy to comprehend the depth and the magnitude of such system when fully adopted.
However, the Chinese political culture and political model differ significantly when compared to the Western system of democracies. While in West it has been depicted as the extension of the Orwellian world, Chinese citizens can see it as the universal tool for achieving more prosperity and higher living standards. Data privacy and personal data are most likely undervalued in China today, but it is hard, to predict to what extent the potential improvement of companies’ performance and the following redistribution of wealth may offset the possible emotional tension of citizens in the long-term, due to displaced privacy issues.
It will be relatively complicated to implement the system in a region with significant percentages of the minority population. For example, in the Xinjiang, the northwest of China, the stability of the region is continuously challenged. China manages to control this area through the heavy use of military and army apparatus, and Xinjiang’s citizens anticipate further deterioration if the Social Credit System becomes the main signpost for the policy. The region is also strategically located for the Chinese One Belt One Road strategy, so the political situation will remain very fragile.
Conclusion
China is a very big and relatively powerful country that has not been fully unified, both in a political and economic sense. The recent events in Hong Kong have shown that. Besides, there is a huge income and educational gap between the urban and rural areas and the Social Credit System, if implemented in every region and every place, will hardly achieve its all-encompassing goals in economy and politics.
Although it may provide the access to the financial system for many citizens that live in rural areas, and it will eventually lead to greater social cohesion, the system will not be able to address the underlying societal and structural differences, at least not in the short to medium run.
One of the important policy-making implications when considering such a system, it is worth stating that it should not be fully judged from the perspective of the industrialized western countries. China has a different political model and differing historical trajectories when compared to the West. Different macro strategies of China should not be measured against the western world-view and the policymakers in the West should allow for some degree of flexibility when analyzing Chinese policy design.
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights).