What is a social credit demonstration city?

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On August 12, 2019 the People’s Bank of China and the National Development and Reform Commission announced a second batch of social credit demonstration cities.

But, what is a social credit demonstration city?

In order to combine centralized planning with local flexibility and experimentation, the central authorities designated certain areas as pilots, encouraging them to innovate within the general framework laid out by national legal documents. In this relatively controlled range, the local governments can identify successful practices, or problem areas, that might be spread to other areas.

Demonstration regions were only mentioned in passing in the 2014-2020 Planning Outline for Social Credit, but in 2015 the list of the first group of 11 potential demonstration cities was released, followed by the announcement of an additional 32 regions in 2016. From among these 43 cities, only 28 have been announced as official demonstration sites. This progression is shown in Appendix A below.

Building the Credit System

Demonstration cities were charged with creating systems for further implementation of the Social Credit Plan in several areas. To do this, the cities draft plans for the establishment of their social credit system, including specific tasks and deadlines, evaluate implementation, develop related training for officials, and use national data for monitoring.

The primary areas of work include:

  1. Establishing platforms for sharing Public Credit Information within the demonstration city and then the entire nation. Public Credit Information refers to records created by government bodies in the performance of their duties, and is a concept that predates the current social credit model. Local governments issue catalogs of public information that specify both currently included information types, and types of information that are forbidden from inclusion (often biometrics, religion, etc.).

The demonstration cities are told to increase analysis and data extraction from existing public credit information, and to increase the capacity of the platforms.

  1. Implementing the Uniform Social Credit Code: In order to consolidate data from various records, the Social Credit Plan calls for establishment of single national identification number for businesses to be used in all circumstances, similar to citizen ID card numbers.

The first wave of demonstration cities were required to merge business inventory codes and licenses into the uniform code by 2017.

  1. Normalizing the collection, consolidation, and reliance on credit information. One of the main goals of the social credit system is to standardize government record keeping, and increase reliance on those records in decision making for areas such as government procurement, administrative permitting etc. Information collection and sharing across departments and levels of government has been notoriously bad compared to developed nations.

Credit service establishments are encouraged to gather additional data, but the extent is not clear.

  1. Facilitating public access to credit information through online and offline means. Easy access to credit information is necessary to increase public reliance on records and individuals’ awareness of their own credit.

As to what information is publicly announced, beyond allowing access to one’s own information, public disclosure is primarily of information on the ‘double disclosures: administrative punishments and permits.

Demonstration cities are told to emphasize protection of entity’s lawful rights and interests in clearing up rules on public disclosure and removal from publicly available information.

Mechanisms for making objections and credit restoration are also required to improve the accuracy of information, and provide motivation for correcting mistakes and changing conduct to improve credit.

  1. Developing the credit services industry. Encouraging non-government actors to begin creating record-based ‘credit products’ available for the public. Such products could also be used as part of industry oversight.
  1. Promoting awareness of creditworthiness (“integrity”): Encouraging public honesty, but also popular use of credit information.
  2. Creating Systems of Joint Rewards and Punishments. Described as the driving force behind much of the social credit system, there is substantial instruction on joint enforcement systems. Generally, the systems described follow the pattern that has been used nationally.
    • Make redlists of compliant, trustworthy entities and blacklists of seriously non-compliant, untrustworthy entities (and grey lists called ‘key scrutiny lists for lesser offenses) in key sectors, following the standards set forth in national lists
      • Ensure proper notice, complaint, and removal procedures for all lists.
      • Ensure the lists are digital, shared, and used in regular administrative work across departments.
      • Urge the blacklisted entities, and those on key scrutiny lists correct their untrustworthy conduct.
    • Think up new rewards and punishments
      • Rewards focus on benefits in provision of public services sector, such as facilitation in areas such as transport, library lending, medical care.
      • Mobilize third parties such as credit service establishments, industry associations, chambers of commerce, social groups, to create industry, market, and social type joint punishments and rewards
    • Get feedback and calculate statistics on the use and efficacy of joint enforcement measures

For more information on what one Demonstration City, Rongcheng, looks like in Practice, click here.

APPENDIX 1: Demonstration Cities

Light Green Background indicates a 2015 nominee, while bright blue is a 2016 nominee.

Approval batch announcements are here: 1st Batch, 2nd Batch.

Demonstration Cities

城市Approval Batch
成都四川省第二批
杭州浙江省第二批
合肥安徽省首批
南京江苏省第二批
青岛山东省首批
沈阳辽宁省
温州浙江省第二批
无锡江苏省首批
芜湖安徽省首批
宿迁江苏省第二批
义乌浙江省第二批
海淀区北京市
呼和浩特市内蒙古自治区
乌海市内蒙古自治区
大连市辽宁省
鞍山市辽宁省首批
辽阳市辽宁省
绥芬河市黑龙江省
浦东新区上海市首批
嘉定区上海市首批
苏州市江苏省第二批
台州市浙江省
安庆市安徽省首批
淮北市安徽省首批
福州市福建省首批
厦门市福建省第二批
莆田市福建省首批
潍坊市山东省第二批
威海市山东省第二批
德州市山东省
荣成市山东省第二批
郑州市河南省首批
南阳市河南省
武汉市湖北省首批
咸宁市湖北省首批
宜昌市湖北省首批
黄石市湖北省
广州市广东省
深圳市广东省
珠海市广东省
汕头市广东省
惠州市广东省第二批
泸州四川省首批
About Jeremy Daum 91 Articles
Jeremy Daum is Alex Daum's dad, Elizabeth Jenkins' Partner, China Law Translate's contributing founder, and a Senior. Fellow at Yale Law School's Paul Tsai China Center. He translates, writes, edits, does web-design, graphic design, billing, tech support, and social media outreach for China Law Translate.

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