Understanding China's Social Credit System: Myths vs Reality

[00:00:32]So, I’ve talked about China enough on this  channel. Time to tackle the elephant in the room.

[00:01:02]Maybe this isn’t the elephant in the room anymore.  A few years ago, whenever anyone brought up modern   China in the West, the first place a lot of  people’s minds would go was to the social credit   system. And can you blame them? It’s an arresting  thought. From about 2017 to 2021, mainstream   Western news outlets would regularly publish  articles asserting that China has a mandatory   points-based system for scoring individual  people’s loyalty to the communist regime,   automatically enforced by state-of-the-art  software and constant surveillance. Prosocial   behavior supposedly gained you points, and  anything the government didn’t like lost you a   set number of points. Caught on camera picking  up litter? Plus 10 social credit points! Not   picking up after your dog? Minus 10 social  credit points! Using a VPN to watch YouTube?   Minus 50 social credit points! Is that video  about Tiananmen Square? Minus 100 social credit   points! You don’t wanna know what happens if your  social credit gets any lower! It’s so dystopian,   it sounds like a Black Mirror episode -  because it was a Black Mirror episode!

[00:02:14]These days, you don’t hear as much  about the social credit system. In   all the previous videos I’ve done about  my travels in China, I’ve only gotten a   few comments on the social credit system. I  think the consensus on social credit on the   Western internet these days is that it was a  hoax, or a misinterpretation, or something.   When everyone was joining Xiaohongshu a month  or so ago, to my knowledge nobody even asked   about the social credit system, because by then  America had decided it doesn’t actually exist.

[00:02:43]And it doesn’t exist! At least, that was my  impression when I studied abroad in China in   fall 2023. Nobody talks about it. Security cameras  are all over the place - I counted 15 of them in   the 5-minute daily walk from my dorm to my main  classroom - but people are blasé about doing stuff   like jaywalking or smoking in a no-smoking area  right in front of security cameras. I brought up   the social credit system once, casually, in front  of a mixed crowd of Chinese and international   students. The international students thought I was  joking, and the Chinese students had no idea what   I was talking about. When I explained it to them,  they were still baffled. The only sign of anything   like a social credit system that I experienced  the whole time I was there was that ominous   announcement on one of the high-speed trains I  started this video with, and that isn’t a standard   announcement. I only heard that once in all my  travels. Normally there’s an announcement on the   trains after every stop that warns you of a long  list of things you’re not allowed to do onboard,   notably including eating smelly food, but  doesn’t tell you what the consequences will be.

[00:03:53]So when I came back home to Oregon, entered  my final year of college, and had to take a   course on Chinese history to fulfill my Chinese  minor, I was startled to find my professor,   who was American but fluent in Mandarin and had  spent cumulative years of her life in China,   most recently right before covid, teaching the  social credit system as fact! She said she’d   talked to Chinese people, and even government  officials, about the social credit system,   and found that most of them were all for  it, or at least that’s what they said. She   said there was a central internet portal where  people could look up their social credit score,   that people do that all the time, and she had  personally witnessed this. I visited her office   hours and asked for some sources. I got the same  news articles from the 2010s I’d already seen,   claiming things about the social credit system  that landed a long way from my own experience.

[00:04:45]What’s going on? What is the Social  Credit System? I’m your host Tor Parsons,   this is my cohost Jolibee the Durian, and  welcome to Tor’s Cabinet of Curiosities.

[00:05:26][Intro] There is almost no good reporting  on the Social Credit System on the   Western internet. All coverage of it  falls into two categories: number one,   articles from legacy media outlets like CNN and  the like, mostly published almost a decade ago,   that assert obviously false things  about the Social Credit System,   like that the faces of people with low social  credit are displayed on screens around cities   like medieval criminals in the stocks, but also  have weirdly precise unsourced statistics - like,   “in fiscal year 2017, X number of train tickets  were denied due to low social credit” that, for   all the healthy skepticism I have about American  media coverage of China, I still feel those can’t   have been made up out of thin air. That’s got to  be a misinterpretation of some real statistic.

[00:06:16]And then the other category are  the denials of its existence,   and unfortunately those mostly come from  tankies who literally think modern China   can do no wrong. My impression from living  in China was that they’re correct that the   social credit system either totally doesn’t  exist, or doesn’t apply to normal people,   but it’s hard to take that seriously when  it’s tweeted alongside obviously false   assertions about China and the CCP, like that  the Uyghur internment is an American myth too.  Or, the people who seemingly rightfully say  there’s no social credit system will also say   shit like “Tibet had it coming because the  current Dalai Lama is a child predator”. No,   he’s not! When I did a video about Tibet a  few weeks ago and called the current Dalai   Lama a good guy in passing, I got an annoying  number of comments that were like “Does he know   about the allegations?” Yeah, I do, and it’s  bullshit. He kissed a kid on the lips once,   which is a normal thing to do in Tibetan culture,  and he made a joke Westerners didn’t get about   sticking out his tongue as a sign of piety,  which is an old Tibetan Buddhist tradition that   I mentioned in the episode. I’m not sure why that  one incident, which was treated as totally normal   by everyone who was actually there, and the Dalai  Lama probably does all the time in Dharamshala,   became a big deal in the Western media. Not  to get all conspiratorial, but there’s a big,   powerful country that has a vested  interest in making the Dalai Lama look bad,   and they’re known to have a pretty sophisticated  propaganda machine on the Western Internet.

[00:07:40]But maybe that really is too conspiratorial.  After all, when I was in a Chinese propaganda   video - check out that story - it was comically  bad and obviously propaganda. And I guess there’s   a little bit of schadenfreude for a certain  type of person in declaring that the Dalai Lama,   of all people, is actually a bad person.  You know that type of person. “The people   idiot normies think are good, are bad  actually! I’m like the guy from They Live,   who sees how the world is run by evil aliens who  make us want to buy things and conform. Isn’t   that so smart and original? I’m the only one who  understands how dark society is, like my soul.”  But this video is about the Social Credit  System. Let’s get back on track. The best   source I’ve been able to find on the social  credit system, one that’s dedicated to busting   myths about the system but is nuanced  and criticizes both China and the West,   well-sourced with translated Chinese legal  documents, and certainly seems like more of   a disinterested investigation than anything else  I’ve come across, is the work of Yale’s Jeremy   Daum, one of the leaders of the Paul Tsai China  Center, a think-tank about US-China relations.  The story of the Social Credit System  starts like this. In the 1990s and 2000s,   China suddenly got rich. It went from poorer  than most of Africa, to on par with the West   in a lot of ways. My favorite anecdote from  this time is that, at one point in the 90s,   it became fashionable to hang cuts of meat in your  windows. Because average Chinese people couldn’t   afford meat except on special occasions before  then, so you hung your meat in your window to   tell the neighbors “Look how rich we’re getting!”  A few years later, refrigerators became something   the average Chinese household had access  to, and then having meat in your window,   which was a sign of wealth in the living memory  of a kindergartener, became a sign of poverty,   because if you didn’t have any meat on  display, that meant it was in your fridge.

[00:09:43]But times of rapid change are almost always bad  for one thing: [Key and Peele Terries clip] trust.   The atomization of first-world life had hit China  like a truck. The Internet and social media were   going live, and at the same time, Chinese people  were going from living in places like this, to   places like this. All over the news were stories  of high-ranking people behaving badly, stories   too big for the government to hush up: in 2008, an  earthquake in Sichuan killed nearly 70,000 people,   hundreds of whom were kids in shoddy,  quickly built schoolhouses. Later that year,   the country’s biggest brand of infant formula  was discovered to be tainted with melamine,   a chemical that causes kidney stones, so  they could cheat on nutrition tests. In 2011,   40 people died in a train accident on  brand-new track in Wenzhou. In 2012,   Bo Xilai, the charismatic party secretary for  the major city of Chongqing, who had an unusual   amount of genuine mass popularity for a Chinese  politician and was considered a likely choice   for the next leader of the country, was arrested  for a too-complicated-to-describe scandal notably   involving the murder of a British businessman.  Bo was so powerful that for a few hours after he   was arrested, there were rumors his supporters  in the military were about to launch a coup.

[00:11:01]In the old days, you knew where to  put your trust, and where not to.   People would try to pick your pockets on the  train, but at least you knew your neighbors,   and your village party chief, and you could  tell those people were upstanding citizens. Now,   petty crime is almost a thing of the past  because Big Brother is truly always watching,   if not in ways as insidious as Westerners think -  but can you trust Big Brother? In the mid-2010s,   most Chinese people were still perfectly happy  with the direction of their country. China   was growing. Things were on the right  track. But they had a crisis of trust.

[00:11:37]So, the government did what governments do  the world over: put out an extremely vague   statement aimed at placating people, setting  an ill-defined goal. A June 2014 announcement   was headlined “Planning Outline for the  Establishment of a Social Credit System,   2014-2020”. The phrase usually translated  as “social credit”, shèhuì xinyong, did in   a word-for-word sense mean “social credit”, and it  uses the same word used to mean financial credit,   but in context it could have equally  been translated as “public trust”.  It began, ahem: “The social credit system is  an important component of the Socialist market   economy system and the social governance  system.  It is based on laws, regulations,   standards, and agreements [no shit Sherlock];  its foundation is a complete network covering   the credit records of all members of society and  the credit infrastructure; it is supported by   the application of credit information and credit  service systems in accordance with rules [no shit   Sherlock]; it inherently requires establishing  the concept of a culture of creditworthiness   and promoting the traditional virtue of  creditworthiness; its reward and punishment   mechanisms are incentivizing trustworthiness  and restricting untrustworthiness, and its   goal is to raise awareness of creditworthiness  and the level of credit throughout society.” Ominous, I guess, but more than anything,  vague. It’s a whole lot of nothing. Feels like   bureaucrats trying to reach their word count.  To the extent that it set a real goal at all,   it wasn’t to create a social credit system; it  was to create a financial credit system. Bank   accounts were also something most Chinese had  first gotten in the past decade or so. People   were defaulting on loans left and right. What  the government really wanted was to expand the   use of credit reports in China, so that banks  had a metric to evaluate people’s likelihood   of paying back loans. And realizing that the  people were experiencing a crisis of trust,   they tacked on some verbiage about maybe,  potentially, introducing some non-financial   elements to the scoring too, to generally  establish a climate of trust between officials   and the public. That’s the first important thing  to remember - between officials and the public.   When the government started talking about putting  together some sort of social credit scheme,   it was clearly meant to reassure the public that  officials could be trusted, not the other way   around. But if they ever planned to follow through  on that, the details would be worked out later.  It was up to local officials to put this  vague plan into action. That’s the way a   lot of policies work in China - the central  government puts out a directive swathed in   bureaucracy-speak, the local CCP leaders for  the provinces and cities have to interpret it,   they interpret it in varying ways  with varying levels of success,   and then the government tells the ones that are  successful “Yes! That’s exactly what we had in   mind!” and the less successful ones are the fall  guys who get blamed for the policy’s vagueness   in the first place. In other words, you could say  that China’s states are laboratories of autocracy.

[00:14:54]We’ll get to what the regional governments  did later. It took almost a year for the   West to notice the Planning Outline for the  Establishment of a Social Credit System,   and according to Jeremy Daum, the first people to  misinterpret the announcement were…the Dutch? Ok,   that’s not what I would have expected.  But yeah, the earliest Western article   covering the Social Credit System at all, let  alone covering it as a dystopian mechanism of   social control, was in the mainstream Dutch  newspaper De Volkskrant in April 2015,   interviewing Rogier Creemers, a lecturer in  Modern China Studies at Leiden University.   Creemers misinterpreted the phrase “tongyi shèhuì  xinyong daima”, a “unified social credit code”,   to mean that people would be assigned numbers  representing their loyalty to the regime. Creemers   was Patient Zero. This is where the idea of a  points-based, three-digit code, like a credit   score, that determines your social credit -  something that never existed at all in China,   with one exception that we’ll get to later  - this is where that originally comes from.

[00:16:01]In reality, what “unified social credit  code” meant was that they wanted to   establish a universally recognized, universally  shared code used between government agencies,   mostly to enforce trust of officials. The  Chinese government is a vast bureaucracy in   which the individual agencies don’t share much  information with each other. If you’re a rural   county party chief who asked for a grant from  the Ministry of Agriculture to buy some tractors,   and you spent that on a Lamborghini for your  mistress, even if you got caught and fined   and transferred to another county for that, the  Ministry of Energy wouldn’t have any evidence to   distrust you if you then asked for a grant to put  some power lines underground, with the intention   of buying another Lambo. What they were saying  was, agencies need to have a system to look up   people’s already existing ID numbers and do  background checks, and especially important,   high-ranking people, so that we can have a better  understanding of who’s corrupt and who’s not.

[00:16:59]But there aren’t a lot of people in the West  who speak Chinese, and far fewer who speak   Chinese Communist Party-ese. And some kind of  Black Mirror-style people-rating system seemed   like something China would do. The campaign of  suppression against the Uyghurs, which again,   is real and terrifying, was starting to become  known in the West. Of course they’d impose some   strictures like that on the population outside  Xinjiang, too. The story spread like wildfire   from the Volkskrant article. The rumor stayed in  Europe for a few months, notably being picked up   by Rick Falkvinge, the founder of Sweden’s Pirate  Party. “Pirate” political parties were a movement,   mostly in Europe, in the 2000s, and they  were incredibly based. They were like,   tech utopian left-libertarian parties whose main  issues were being anti-copyright, anti-patents,   putting together digital direct democracies like  a combination of Estonia’s techno-democracy and   Switzerland’s referendums, and enforcing a free  and open Internet that respected users’ privacy.   Most European countries set up Pirate Parties,  some of them won seats in their countries’   parliaments, they almost won a majority in Iceland  once, for a while the mayor of Prague was a member   of the Czech Pirate Party. I wish they were still  around. I mean, they still are in a lot of places,   but they’re nowhere near as popular as  they were. It was a very 2000s ideology,   very predicated on the idea that the Internet  would lead to a new era of free and open society,   which it kinda did, but that didn’t look  like what we thought it would. But if I   lived in a country with a robust Pirate  Party that wasn’t just a protest vote,   I’d still vote for them. I feel like the  Hiroo Onoda of the 2000s war on copyright.   I know it’s over and my side lost. But I’m still  fighting, goddamnit, even if I’m fighting alone.

[00:18:49]Anyway, a rare Pirate Party L was when Rick  Falkvinge took the Volkskrant article on the   social credit system as fact. To be  fair, he had no reason to doubt it.   He published an article about social credit on his  blog about privacy rights, which, by fall 2015,   got noticed by privacy activists in America,  leading to the first major exposure of the   social credit myth in the US media: Jay Stanley,  a tech policy expert at the ACLU, wrote a lengthy   article that codified a lot of what we now know  as the increasingly detailed social credit myth.

[00:19:22]The game of telephone just accelerated from there  - and I feel obliged to tell you that in Britain,   the game of telephone itself is called  Chinese whispers. That’s not really relevant,   but it certainly describes what was going  on in the Western press. A month after the   ACLU press release, social credit was in the New  Yorker and the New Republic. The real big break   for social credit in America was an 8-minute  NBC spot where they sent reporters to China,   interviewed Chinese people, and came away  with a very effective exposé on the system,   seemingly providing eyewitness evidence for  everything from numerical three-digit social   credit scores, to public kiosks and apps  where people can check their social credit,   to facial recognition software enforcing it all.  In reality it conflated something like 5 unrelated   policies. It’s a masterclass in convincing,  misleading journalism. I would put it in the   same category as that fun mock-documentary where  some people interviewed a bunch of astronauts and   NASA engineers and then creatively edited  their interviews to make it seem like they   were admitting to faking the moon landing  - link to that in the description. Only I’m   not sure the people making the NBC documentary  knew they were misrepresenting it. They went   to China with the expectation of finding info  about the social credit system, they’d done their   research from sources like the ACLU release, and  so they knew what to film. It didn’t cross their   mind that they were identifying connections  between policies that weren’t really there.

[00:20:50]2018-19 was the peak of America’s interest in  social credit. Mike Pence denounced it at the   White House. George Soros denounced it at Davos.  Memes were flooding the Internet, as well as   infographics purporting to explain how to gain or  lose social credit points. The following claims,   all originating in the ACLU article, were  universally repeated: that it involves a numerical   scale usually ranging from 350 to 950, that two  private e-commerce companies, Alibaba and Tencent,   have a large amount of control over the system,  that your friends would also get rewarded or   penalized based on your actions or vice versa, and  that visas to go abroad were being doled out as   rewards for high social credit. All of these were  misinterpretations of real policies, some related   to the 2014 social credit announcement and some  not. The idea that if your social credit gets to   zero, you get executed wasn’t a misinterpretation  of anything. It was just made up.

[00:21:45]Meanwhile in China, the public trust  system - which is how I’m choosing to   translate shèhuì xinyong, while I’m going  to use “social credit” to mean the Western   myth - the public trust system was gradually  taking shape. The implications of the 2014   announcement were coming into sharper focus.  It was now clear that shèhuì xinyong would   have to comprise three separate initiatives: 1 Encouraging more average Chinese citizens   to keep track of their financial credit. 2 Something to promote virtuous behavior among   officials, both in government and business,  to promote public trust in institutions.  3 Something to promote virtuous  behavior among the public,   a bit more like a real social credit system. The first was being promoted by the central   government, because they knew what they had to  do and how to do it. The second and third were   mostly left to the regional governments to come  up with ideas. Let’s take these one at a time.

[00:22:39]Number one. In order to encourage more Chinese to  have good financial credit scores, the government   partnered with a bunch of private companies,  including one, a subsidiary of the e-commerce   giant Alibaba, called Sesame Credit. Sesame  Credit looms large in Western coverage of the   social credit system, often misreported as a  brand name of the social credit system itself,   or evidence that corporations are actually the  ones in the drivers’ seat on social credit. It   gives you a three-digit score that ranges from 350  to 950. It’s somewhat based on mass surveillance,   but a kind of mass surveillance that isn’t  uniquely Chinese. Alibaba’s pitch to the   government, to get them to partner  with Sesame Credit, went like this:  “Hello, and howdy. We’ve heard you’re  interested in setting up a system of   credit scores to determine who should get  loans, but you’re running into hurdles,   since most Chinese have no credit history.  See, we here at Alibaba control an outrageous   amount of the Chinese economy, and since most  transactions in China these days occur through   apps and QR codes, we have access to much of  the financial history of many Chinese people,   and we could use that to construct something a  bit like a credit score. But there’s more - if   you agree to partner with us, we can get  access to people’s social media profiles,   and their entire history on the tightly  regulated Chinese internet, and use that to   determine ever more accurately whether people can  be trusted to pay back loans. And with your help,   we can even offer visas to visit places  like Singapore as perks for high credit!” The government didn’t approve Alibaba’s  application to judge people based on their   online history. Nor did they approve  any of the other attempts to do this,   from a total of 8 private companies that  proposed something like that. Sesame Credit   was forced to make do with people’s Alibaba  transaction history alone - even though   they did confuse Westerners and Chinese alike by  advertising visas as a reward for high credit,   something they never had the right to really  offer, leading to the common canard that social   credit determines whether you have the right to  leave China or not. Other than making you more   likely to get loans from some participating  banks, the only positive consequences of a   good Sesame Credit score were getting  discounts on some Alibaba products,   and the only negative consequences were stuff  like making you pay a deposit before you rent a   bike from Alibaba. Joining was always optional and  there was never any indication that the government   planned to force people to join Sesame Credit or  any other similar program. The government sort   of briefly encouraged people to join Sesame  Credit, but Alibaba and the government never   trusted each other much, and by now Sesame  Credit is just an Alibaba rewards program.

[00:25:20]Some people summarizing the claim  that “social credit kinda exists,   but not in the way Westerners think” end  here. They say “it’s literally just credit   scores.” Sesame Credit was literally just  credit scores. But the rest of the public   trust system is not literally just credit scores.  Even the first pillar of the public trust system,   encouraging more average Chinese citizens  to keep track of their financial credit,   isn’t just credit scores. The other policy  that’s part of this pillar is the only way   something like a social credit system can  apply to ordinary people: debt blacklists.

[00:25:55]If you read coverage outside China of social  credit, one of the most common punishments   for low social credit is purported to be  transportation blacklists. All over the   place you see claims that so many people  have been banned from buying train tickets   or plane tickets because of their low social  credit. 17.5 million plane tickets and 5.5   million high-speed train tickets were denied in  2018 because the buyer had low social credit,   according to MIT Technology Review. This  and the announcement on the train that I   started this video with were the  two things that made me go “Wait,   is this real after all?” And yes, these statistics  are probably real and are related to the public   trust system. There’s one way an average citizen,  who doesn’t own a business and isn’t a government   official, can actually be punished and lose rights  under the auspices of the public trust system:   if they lose a lawsuit the government assumes they  can afford, and refuse to pay. If you’re in debt   to someone who sued you, you get on a blacklist.  Initially that means you can’t buy plane tickets,   then high-speed train tickets, and if you keep  refusing to pay, you eventually lose the right   to send your kid to a private school, or even rent  property. You can get off the blacklist by simply   paying the judgment. It’s fairly common for people  to discover, to their surprise, that they’re on a   blacklist when they have a plane or train ticket  denied, but that’s usually because of bureaucratic   mistakes - they paid their judgment to the wrong  office or something. Same way there’s a lot of   Americans on wanted lists just because they have  the same name as a fugitive. There’s no numerical   score that measures how much trouble you’re in.  If you’re on Sesame Credit or a similar program,   being on a debt blacklist won’t affect your score  there, since again, those are private programs.   If there’s a Western concept the blacklists are  similar to, it’s the historic practice of debtors’   prison, or the equivalent of courts suspending  your drivers’ license for not paying a judgment.

[00:27:53]The blacklists for debtors overlap with the second  pillar of the public trust system: anti-corruption   measures. The corruption blacklists are closer to  the urban legend of the social credit system, but   they only apply to people who own businesses, or  businesses themselves, or to government officers.   Here’s a list of the initial industries and  professions they planned to target. Officially,   you can look up the anti-corruption rules for  each individual industry - what the crimes are,   what the punishments are. For example, if you  run a shipping company that’s been busted for   smuggling in the past, the authorities will  know to inspect your company’s containers more.   And - here’s the part that’s actually new and  established by the public trust system - if you   start another business in another sector, they’ll  know to scrutinize that one more too. Some of the   rules are more vague - for the electricity  sector, for example, there’s just a list   of the people who the law applies to. People  who run businesses doing any of these things,   and people who have been blacklisted under the  public trust law in other sectors. For some   high-ranking people, minor violations of the law,  like smoking or eating smelly food on a train,   can land you on a blacklist if you get  caught doing that enough times - if you   don’t pay attention to those laws, most likely  you won’t pay attention to the important ones,   either. But even on the trains, the security  cameras typically don’t have facial recognition,   and you need to be busted by a real  person and have that added to a criminal   record for it to have effects on how your  business is treated by the government.  Once again, there’s no numerical score that  measures how corrupt the government thinks you   are. There are documents that mention businesses,  businessmen, and government officials having   “social credit numbers”, but that means ID numbers  that government agencies can share with each other   to determine who they can trust. For individuals,  being put on a public trust corruption blacklist   usually means being blocked from buying high-speed  train tickets (but not low-speed train tickets) or   luxuries like cars, watches, or golf memberships.  For businesses, it means you get inspected and   audited more by the government, and it means  it’s harder for you to get loans, bonds, permits,   or contracts for government projects, but most  importantly, your business appears on a public   blacklist anyone in China can look up, so people  know you may not be trustworthy. If a business   fulfills enough inspections and audits from the  government - or, more often, fires the people   whose decisions got them blacklisted in the first  place - they can get removed from the blacklist.   The one case I know of in which China has used  these industry blacklists to prevent criticism   of the regime is a law where they required  foreign airlines that fly to China to list   Taiwan as part of China, or else risk being  blacklisted as corrupt under the public trust   system. Most airlines got around this by setting  up a separate website for Chinese users. Other   than the Rongcheng experiment and the travails of  Xu Xiaodong, which I’ll get to, this Taiwan law   may be the closest the public trust system has  gotten to resembling the Western vision of it.

[00:31:00]The opposite of blacklists are redlists. If  your business is squeaky-clean, or you run   a really incorruptible regional government for a  while, people can look you up and see you’re on a   redlist. You want to be on a redlist. Redlisted  businesses are inspected less by the government   and redlisted officials are allowed to have perks  like first-class seats reserved personally for   them whenever they want to travel on high-speed  trains. In the West, a list of people or   businesses officially considered trustworthy would  be called a whitelist. Like, you could say the   TSA PreCheck program is a whitelist - the people  who the TSA has determined aren’t terrorists with   enough confidence that they allow them to skip  some of the airport security measures. In China,   the color white is associated with death. If  you said your name was on a whitelist in China,   I don’t know how people would respond, but they  might think that means you’re on death row. Red,   meanwhile, is almost entirely a good color.  If your Sesame Credit score is in the red,   that means you have good credit. A red  flag is explicitly a good thing. There   are so many brand names with “red flag” in them.  And yes, that’s partially because of communism,   but it predates communism too. It’s a deeper  cultural thing. Now you know enough about   Eastern color theory to satisfactorily  decorate a Chinese children’s hospital.

[00:32:16]Anyway, before the unified blacklists and  redlists, the government already had all   this information. Again, if you’re a county  party chief who bought a Lambo with Ministry   of Agriculture funds, the Ministry of Agriculture  would know that, and they wouldn’t give you any   more funds. But before the 2014 public trust  announcement, the Ministry of Agriculture   didn’t have a central portal where they could tell  the rest of the government, be wary of this guy,   he misappropriated our funds. Now they have  that portal. Now, if you buy a Lambo with   federal funds, you might not be able to buy train  tickets. And everyone can look up that portal   on Baidu and find this out about you. That’s  what the announcement on the train I recorded   at the start of the video was referring to, I  think. It was a train from Beijing to Baotou,   the industrial city I talked about visiting  in this episode, and since Baotou is a major   industrial hub that’s in a minority-dominated  area, most people in that area are Mongolian,   not Han Chinese, and like I said in another China  episode, high-speed train tickets are expensive   for ordinary Chinese people, people riding that  particular train are disproportionately likely   to either be Party officials or businessmen,  possibly, since the announcement also played   in English, foreign businessmen. That  announcement was there to say “You know   ordinary people can’t smoke on the train. But  you can’t either. You are not above the law.” Which, I mean, sounds great, right? Regulations  in place that directly target the most powerful   members of society, preventing them from buying  useless luxuries, to keep them humble? Sure,   the public trust blacklists don’t prevent  businessmen from, like, oppressing their   workers - look up Foxconn, a contractor that  makes phones and computers in China for a bunch   of major tech companies, and look up why their  factories are surrounded by nets. The blacklists   are only about corruption and debt repayment.  They’ll stop politicians from insider trading,   but not from ripping apart Uyghur families.  Still, though, the US has a pretty big problem   with politicians doing insider trading! If  only we had something like that in the US,   right? No. You don’t want something like  that. It was not a real, earnest attempt   at ensuring good clean government and good,  clean business. There were ulterior motives.

[00:34:36]A lot of people studying the rise of Xi Jinping  think the public trust blacklists were meant as   a means of centralizing control over the populace,  but not in the way you think. Xi Jinping holds a   lot more power than any previous Chinese leader  in decades. China has never been a democracy,   but from the early 90s to 2012, there were  enough competing factions in the government   keeping each other in check that it was not quite  the absolute autocracy it is now. The two leaders   before Xi had term limits and stuck to them.  How did Xi bloodlessly amass so much power?   Most China experts say, anti-corruption  purges. It’s a common dictator strategy:   you have a country with a government in which  corruption is normalized. You corrupt your way   to the top, and once you wield enough power,  you publicly announce a huge sweep against   corruption. You reveal all the corrupt things  your political opponents have done. Everyone   in the government has done stuff like that.  So have you. But now, you’re perceived as   the one who’s doing something about it. The  public demands that all the officials whose   crimes you’ve revealed need to pay. And of  course, you’re more than happy to oblige,   because those are the officials who could  have blocked your path to absolute power.  The third pillar of the public trust  system was the one left to the cities   and states to figure out, and here’s  where things really get interesting. See,   Westerners weren’t the only people who read  the vague 2014 directive and were like “damn,   looks like the Chinese government wants to  create a points-based panopticon system to   score individual citizens on their prosocial  behavior.” Some city-level CCP officials   interpreted the 2014 statement the same way,  and dutifully set about building one. The city   that got the furthest was Rongcheng,  the only place in the world where,   for a time, there really was a system just  like the one in the American imagination.

[00:36:28]Rongcheng isn’t a major city. It’s got half  a million people, which is tiny by Chinese   standards. It isn’t a tourist destination.  The most notable incident in its recent   history - ironically, I guess, given the other  thing it’s known for is being really hardcore   about conformity - was a bloody mutiny on  a Rongcheng-based fishing boat in 2011. The   Rongcheng social credit system was pretty much  like the system you’ve heard about. It wasn’t   quite as draconian, but it was a numerical system  that scored the behavior of private citizens based   on intensive monitoring and doled out rewards and  punishments for high and low scores respectively.   There were 6 tiers of rewards and punishments,  with the highest for people whose score exceeded   1050, and the lowest for people with scores below  600. It applied to everyone in Rongcheng, and   things that could drop your social credit score  included things like: stealing tap water (minus 60   points), participating in an MLM scheme (minus 30  points), spreading, quote, “negative information”   on social media (minus 50 points), running  a red light or jaywalking (minus 5 points),   setting off firecrackers or dancing in a square  (minus 5 points), illegally holding classes (minus   50 points), being a NIMBY, minus 100 points! I  mean, that seems to be what this one means, right?   “Engaging in unreasonable, vexatious, exorbitant  price-asking or taking other illegal and drastic   measures to interfere with construction work  of public facilities”?!? I take back everything   bad I’ve ever said about China. Meanwhile, you  could gain points by shoveling snow (1 point),   resolving a major dispute between neighbors (10  points), donating to charity, donating blood,   signing up to be an organ donor, receiving a  national or provincial athletic award, enlisting   your children in the military, or being a, quote,  “five-star Party member”, among other things.   If you’ve seen a list or infographic like this  online, it’s most likely come from Rongcheng.  For how dystopian this sounds, the consequences  of low or high social credit weren’t that big   of a deal, nor was it well-enforced. If you had  high social credit, you could get small subsidies   toward transit, medical care, or retirement,  and I mean small: 200 yuan for your pension,   or 100 yuan toward health insurance. 100 yuan is  a little less than 14 dollars. These amounts are   especially paltry in comparison to what you could  do to qualify for them: donating 10,000 yuan to   charity would net you just 10 points. If you did  that just so that it would move you into the top   social credit bracket, you wouldn’t be getting  anything close to your money’s worth. If you had   low social credit, you could be blacklisted from,  quote, “government led procurement or bidding”,   you couldn’t enter the test to become  a municipal official, and if you had,   quote “honorific titles”, they would be  revoked. So, no actual criminal penalties, and   all of these are either so weak as to basically be  symbolic, or would only be things officials would   worry about. Even Rongcheng, it seems, wanted a  social credit system first and foremost to root   out official corruption. The claim that advanced  AI was used to enforce social credit was wrong   even in Rongcheng. The data gathering in  Rongcheng was extremely low-tech. People   went door to door with clipboards. Hard-copy paper  spreadsheets recorded citizens’ infractions. Also,   it wasn’t a permanent record - good and bad  things you did expired after a few years.

[00:40:02]And, ultimately, Rongcheng’s whole social  credit system expired after a few years too.   It still exists in a modified form, but it’s  opt-in only, and there are no punishments for   having a low score. So it’s just basically just  a municipal system of Boy Scout merit badges.   The national government, possibly aware  by 2019 that the world was developing a   detailed fantasy of China’s social credit laws  that was bad for the country’s public image,   demanded that Rongcheng end their social credit  experiment that year, and rumor has it that local   officials lost their jobs for putting something so  dystopian into practice. The Rongcheng experiment,   unlike the rest of the public trust system, was  not very popular. Before, as recently as 2018,   Beijing had put out some memos hinting that  they might really be considering a points-based   social credit system like the one feared  by the world. Rongcheng made it clear this   was off the table. The most recent memo on the  public trust system was put out in 2022, and it   was just a lot more vague jargon that can roughly  be summarized as “Things seem to be going alright,   maybe we’ll strengthen these laws in the future,  but who knows what that’s gonna look like.”   Regional governments are probably hard at work  trying to obey this missive, but whether or not   they think they know what to do, they know that  what Rongcheng did is what not to do. As far as   I can tell, the mechanisms set up nationwide by  the 2014 public trust law are still little-known   to the Chinese public, and among those who  do know about them, they’re uncontroversial.

[00:41:35]But you still can land on the bad side of them.  One person occasionally covered by the Western   media in conjunction with the social credit  system was the MMA fighter Xu Xiaodong. His   story is a really good example of what the  real public trust system is, what it isn’t,   and how despite everything I’ve just said, it  can still be used by the government to persecute   people they don’t like. Xu Xiaodong’s big thing is  taking down traditional Chinese martial artists.   Not by fighting them - although he does that  too - but by exposing them as frauds. He has a   YouTube channel where he investigates kung fu and  tai chi masters’ claims, which is mostly watched   by Taiwanese people and overseas Chinese,  since YouTube is blocked in mainland China,   but Xu is a mainlander. He’s not a top-notch MMA  fighter, which he admits, but he’s defeated every   self-proclaimed tai chi master who has challenged  him, often in less than 30 seconds. Now, on this   YouTube channel, Xu also addresses other topics,  topics that put him in hot water with far more   important people than martial artists who claim  to have supernatural powers. He supported the   2019 Hong Kong protests. He questioned the  official story of a covid whistleblower who   disappeared while investigating the early outbreak  in Wuhan. He criticized the zero-covid policy.  The Western media regularly reported that,  because of his criticism of the regime, Xu   Xiaodong’s social credit was so low, he couldn’t  buy train or plane tickets, rent property,   or stay in some hotels. He claims it took him 36  hours to reach one fight in Xinjiang because he   couldn’t use most transportation. If you’ve been  watching the rest of this video, you should know   what’s really going on: some martial arts star  sued him for libel, right? Right. Chen Xiaowang,   a tai chi grandmaster who Xu called a fraud, sued  him for the equivalent of about 60,000 dollars in   damages. Xu claimed for a while he wasn’t able to  pay, and got blacklisted. He did eventually pay   the damages in installments, and was taken off the  blacklist. But by then, the media outside China   had covered his travel and lodging difficulties,  and attributed them not to the lawsuit but to his   criticism of the CCP. Which might be what Xu was  trying to do. When he arrived 36 hours late to   a fight, that may have been a calculated move  to draw attention to how he was being treated.

[00:44:04]And I don’t fault him for that. Even if that was  his intention, I don’t think he was misleading   people by saying “Look what our government can  do to people they don’t like.” I have no idea   how genuine of a martial arts grandmaster Chen  Xiaowang is. But it’s quite possible some official   somewhere decided that they needed to shut this  guy up. And disappearing him would be too obvious,   so they had to just make his life suck enough  to make him think twice about attacking the   regime. So, why not get someone to sue him for  damages he can’t afford. The journalist Liu Hu,   another critic of the regime who’s  been sued on trumped-up charges,   and as far as I know, refuses to pay to  this day, seriously restricting his rights,   he’s open about how he could pay but he  won’t, because he believes the lawsuit is   illegitimate. But it’s also possible Xu would  have been sued even if he was an upstanding CCP   supporter who only specifically criticized  martial artists. The thing about people who   physically fight for a living is that a lot  of them enjoy a fight in other ways, too.

[00:45:11]So, let’s recap. Here is the story of social  credit. In 2014, the Chinese government put out   a memo talking about establishing something called  a “social credit system”. There were a few motives   in doing this: getting financial credit reports  for more Chinese people, increasing the public’s   ability to trust businesses and officials, and  possibly, while they were at it, using that to do   some corruption purges against potential rivals  to Xi Jinping. They drew a rough circle around   these sorta-related issues, and called them social  credit, albeit in context maybe better translated   as “public trust”. Even the drafters of the memo  didn’t quite know what this meant in practice;   they were expecting the regional governments to  interpret it in various ways, some of which would   work and some wouldn’t. Both the West and some  regional Chinese governments interpreted this as   meaning they wanted a points-based system to rank  individual citizens on their prosocial behavior,   something the government didn’t want and didn’t  intend to impose. One small city, Rongcheng,   put together a points-based system similar to  the one feared by the West, but it was low-tech   and poorly enforced, and the national government  demanded they shut it down. What the government   did impose was a system of blacklists to enforce  repayment of debts and businessmen and officials’   compliance with the law, which was usually meted  out by being banned from buying high-speed train   or plane tickets. In some cases, critics of  the CCP may have been sued specifically for   the purpose of putting them on a blacklist,  but officially, the public trust system is   not supposed to be used to suppress dissent, and  in practice, it doesn’t get used that way often.

[00:46:53]So, myths versus reality. People have individual 3-digit   social credit scores. Nobody has ever had  numerical points-based social credit scores,   other than in a trial program  in the minor city of Rongcheng.  If enough social-credit-reducing minor  infractions pile up, you can be severely   punished or even executed. Even in Rongcheng  when they had their social credit system,   punishments were minor, and the local  officials were reprimanded by the central   government for including any punishments at all. Millions of people have been blacklisted from   buying plane or train tickets due to low social  credit. Millions of people have been blacklisted   from buying plane or train tickets due to not  paying a judgment after being sued; however, this   has been used to punish critics of the regime. Social credit is enforced by AI and mass   surveillance. While China is definitely under  mass surveillance, this has nothing to do with   social credit. Under the short-lived Rongcheng  social credit system, data was kept by people   with clipboards going door to door. Social credit is the main mechanism   of enforcing loyalty to the regime. The CCP has  way more insidious ways of enforcing loyalty.   And then there’s the counter-myths that  you might see on social media these days.  “Social credit” was made up as Western  propaganda to demonize China. Not really.   Most of the mythology of the Social Credit System  organically came together through a series of   misinterpretations, both inside and outside China,  of a deliberately vague 2014 government memo.  “Social credit” is just the exact same thing  as credit scores. Not that either. While that’s   one aspect of the system, it also includes  blacklists for corrupt officials and people   who owe money to the government. “Social credit” is a government   accountability system, holding officials  to higher moral standards than Western   countries do. Not really. Sort of, but  the motives are definitely less than pure.

[00:48:56]There are a lot of rules in China. A lot more  than in the West. And they are enforced a lot   more arbitrarily. There’s a lot more surveillance  in day-to-day life. But the series of policies   set up by the government that they called a  social credit system are not what you’ve been   told. They are not necessarily a good thing.  China is not your friend. But there is no point   at which you get caught eating smelly food on  the train so many times that you get executed.

[00:49:25]And you know what that means - All those  rules? Really more like guidelines.