The Chinese corporate social credit system

China is about to implement an algorithmic scoring system for corporate market actors.

The first independent study on it made by consulting firm Sinolytics on behest of the European Union Chamber of Commerce in China, describes it as -

'The Digital Hand – How China's Corporate Social Credit System Conditions Market Actors'
https://www.europeanchamber.com.cn/...a_wake_up_call_for_european_business_in_china

Meaning, that china is implementing a more direct approach on how to 'guide' the proverbial invisible hand of the market - within their capitalistic market economy.

Its only 35 pages long, looks parseable and should be an interesting read.

Short video summery:

From the pdf:

English name coined is 'Corporate Social Credit System', it's due to be implemented by the end of 2020.

'Uses realtime monitoring and processing systems to collect and interpret Big Data, which facilitates immediate detection and compliance and raises or decreases a companies 'score' (buzzwords )

Good (according to Sinolytics):

- equal enforcement of regulations (because algos)
- European companies that use low emissions tech on "heavily polluted days" may not be shut down in the future

Bad:
- administrative overhead for SMEs.

Ugly:

Lol.

 

Kind of called it in my master thesis, btw. (A few years ago. Which makes me oddly joyful... )

 

You know what - you might be right, there (in addressing specific people)...

It continues:

*rofl*

It continues:

edit:

For multi national companies, a set of about 300 requirements can be expected to be put into place. If they are not met, and scores plummet too low, there are repercussions.

What are they - you ask?

Lol.

edit: This is the actual call for action:

edit:

Here the customary 'go ahead, and monitor each other' - clause...

edit: This is the investment impact callout:

edit:
Here is the 'go ahead and self censor - best guesses welcome' principle:

Hint: 100 bucks on 'it will never get too transparent'.

edit: This is also part of the 'social chilling'

edit: Stuff like this is just beautiful(ly vicious)...
(Turns around 'not guilty until proven' and makes you formally apply for 'restoration of credit' with set in place waiting periods.)

edit: Here is some candy. (Beautiful. )

edit: Also bad points for filing stuff late (of course ).

edit: BWAHAHAHA!

Found an intentional backdoor here, boys.

edit: Oh it is so beautiful(ly vicious).

 

The impacts of being rated as a 'distrusted company':

- Higher inspection rates
- Targeted audits
- [being distrusted is a] reference point during all kinds of administrative approvals and bureaucratic procedures
- [being distrusted is a] reference point for financial and credit affairs
- Exclusion from public procurement
- Public blaming and shaming

- Impact on the legal representative and directly responsible personnel

[Travel restrictions! Yay! Restrictions from purchasing insurances! Yay! Restrictions from purchasing real estate! Yay! Restrictions from taking another job in the field! Yay!]
- Impact on other ratings or classifications [No certs for you!]


The importance of data aggregation:

[Please, pretty Please? Now social media becomes a problem? ]

- seems so..

Oh, there is a 'Cyberspace Administration of China for fake news and rumours' - neat. I'm sure some forum users would like to have that in the west a well..

Here is the list on corporate technical implementation:

 

Here is what makes you a 'heavily distrusted entity'

And of course - the system and the weighing is 'ever changing'.

Corporate wishlist (current):

Can we please have:

Another piece of candy for your way out:

Thats (most of) it.

edit: Oh, and it will be part of international trade relations.

 

Now.

If you read everything - you get a comprehensive understanding how business relations work. Also state/business level relations.

Its worth it.

This is not just me getting enthused. (Moderators please allow. Its not everyday - that something like this comes along.. )

 

For insurances purposes - it was likely. For recruitment purposes it was already there. How the US uses their 'full take' on data - we cant say for certain.

But we still tend to keep our societies more open, and not have people 'collect better social circles' to gain points (well, actually.. ), or at least not to 'spy and report' on everyones activity (chilling effect), as the counter party in a business deal.

Still the trajectories are there, and the similarities (what FB tries to push for (f.e. get data on all money transactions), are there as well.

 

Its correct, concerning the big data approach - with a select group of individuals. In the private sector there are the same private data brokers in the west, that are used (as one data source) in the Chinese system as well. They may be used from a certain responsibility level for a job onwards. For recruitment and assessment of potential - facebook profiles will be screened today. Police use facebook to 'hunt criminals'. People use social media to assess new friend circles and lifepartners. People will use company rating websites to pick out future employers. People use online portals to select their physicians, ... and so on and so forth.

The actual promise of a 'digital assistant" (still one of the goals tech companies are aiming fore), is to deliver you potential ratings (alongside ads), context sensitive.

When you are loosing your job, in my country - your CV will be assessed by an algorithm. Only leaving room for 'individual upgrading' in case of "has shown ambition".

We are there. Its just not compulsory yet. That and some of the 'proactive' and 'chilling' affects of the chinese system - probably never will be implemented in the west - because we would consider it unethical, or unconstitutional.

That said - governments in the west, are very willing to employ so called 'nudging' in legislation - to reach desired effect. And thats data driven a well - just not as coordinated or all encompasing.


For business purposes - when I copied the term "digital hand of the market" - I wasn't kidding. They are literally disabling the free market economy of capitalism. Not just on a basis of 'sector regulation', but actually bringing in another factor that their capitalism works - optimizing alongside it.

Market economies in the west are supposed to be largely impartial - theirs is not - by design.

So that would probably be the last thing that changes, if it ever gets more accepted in the west. But everything other than that - already is changing.

 

What facebook has lost during the publicity hit was made up by instagram growth (same company) instantly.

When they got fined their billion dollar fee recently their stock price rose.

They've bought out past competitors. Or copied their featureset and pushed them out of market (with snapchat they are still trying).

When france tries to enact a digital tax, it gets put up on the G7 agenda, and the US delegation lobbies it away again.

The thing with companies profiting from the network effect is, that they are actaully likely never to get replaced - because the investment a competitor would have to mount - against a 'free' business model that scales on advertising - is unfinancible. Even not looking at that they would get a worse ad price.

There will not be another technological leap that would warrant a usability change where they could mess up. in the near future

And to outcompete youtube - not even amazon was brave enough to try - and they settled for the twitch approach instead (which has people paying for chatroom access/visibility).

The blatent truth that has to sink in is - that the garage days are long, long over - and you are mostly dreaming of a phantasy, when awaiting a changeover.

The last lockin would be digital payment - if facebook has that under wraps as well - its over. There they now have got pushback by national banks, but they'll work on getting that lobbied away.

Youtube and Facebook also never will get 'better' in terms of customer dreams of what content should be ranked higher or lower, because y<ou dont decide - advertisers do. So if you've copied that statement from some youtubers rant, thats mostly false as well...

Welcome to the here and now.

 

Rocket man doesnt matter. Russia doesnt matter (starts to matter more regionally, or started until recent protests). Diplomacy still has them covered.

Its just the easyness that we go from individual rights (privacy, remember?) to - well, we probably should monior our competition now to retain a good social score - thats actually remarkable.