Author(s)
Source
University of Illinois Law Review, 2022 (forthcoming)
Summary
Western scholars view China’s Social Credit System (SCS) as a repressive regime. However, liberal governments could adopt social credit systems to improve protection for rights and regulate data.
Policy Relevance
Social credit systems could replace traditional top-down regulation.
Main Points
- China's Social Credit System (SCS) uses data, analytics, and software to promote compliance with law and social values; many scholars in other nations consider SCS an oppressive Orwellian venture.
- A social credit system developed by liberal governments could improve protection of fundamental rights within capitalist society; we should not entirely reject the use of social credit systems as a tool.
- Originally, SCS was developed because China lacked a consumer financial credit reporting system, a barrier to economic development.
- SCS maintains a data repository for each of three domains: individuals, corporations, and government entities.
- These databases are separate but linked.
- Because the databases are linked, executives of a blacklisted firm might find sanctions follow them to new positions.
- Official SCS subsystems rely on blacklists and redlists, which make up the Joint Punishment System; for example, citizens on the transport blacklists may be barred from buying rail or airplane tickets
- Within the United States, algorithmic regulation could increase regulatory capacity and address the public perception that decision-making has become politicized, enhancing the capacity of the administrative state.
- SCS is similar to rating systems in the West such as those used by Uber and eBay, but these Western systems are subjective, unpredictable, unregulated, and poorly understood; SCS was designed to be transparent and objective.
- SCS threatens privacy, human rights, and the rule of law, but some Chinese citizens endorse it, believing it will reinforce even-handed law enforcement and bolster trust in markets.
- SCS could reduce perceptions that state-owned enterprises or high officials are favored, and discourage bribe-taking.
- SCS allows some human involvement in decisions, and could mask arbitrary or punitive behavior by authorities.
- About 70 percent of Chinese are concerned about SCS abuse or overbreadth.
- Where the rule of law is well established and corruption is restricted, a system of algorithmic governance like SCS might be used without abuse or oppression.
- In Western society, the power of major corporations and successful authoritarian states like China challenge our commitment to the rule of law; social credit systems could address both challenges by constraining government and private power.
- Social credit systems involve three key elements:
- Infrastructure: Social credit treats the systems for aggregating personal data as public infrastructure with public benefits, supporting data protection regulation.
- Feedback: Social credit gives users feedback, providing transparency insofar as subjects are able to observe the results of the systems’ analyses.
- Oversight: oversight mechanisms would allow regulation of the state itself, replacing human discretion with data-driven decisions.
- China is developing new blockchain technologies; blockchain technology makes it hard to tamper with information, and it could be used in connection with SCS.