Blacklist labels millions of Chinese citizens and businesses untrustworthy

Blacklist labels millions of Chinese citizens and businesses untrustworthy

Feb. 18, 2019– Mary Greeley News – Millions of Chinese individuals and businesses have been labelled as untrustworthy on an official blacklist banning them from any number of activities, including accessing financial markets or travelling by air or train, as the use of the government’s social credit system accelerates.

The annual blacklist is part of a broader effort to boost “trustworthiness” in Chinese society and is an extension of China’s social credit system, which is expected to give each of its 1.4 billion citizens a personal score.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

The social credit system assigns both positive and negative scores for individual or corporate behavior to pressure citizens into behaving.

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Human rights advocates, though, worry that the arbitrary system does not consider individual circumstances and so often unfairly labels individuals and firms as untrustworthy.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

Over 3.59 million Chinese enterprises were added to the official creditworthiness blacklist last year, banning them from a series of activities, including bidding on projects, accessing security markets, taking part in land auctions, issuing corporate bonds, according to the 2018 annual report released by the National Public Credit Information Centre.

The center is backed by the National Development and Reform Commission, China’s top economic planner, to run the credit rating system.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

According to the report, the authorities collected over 14.21 million pieces of information on the “untrustworthy conduct” of individuals and businesses, including charges of swindling customers, failing to repay loans, illegal fund collection, false and misleading advertising, as well as uncivilized behavior such as taking reserved seats on trains or causing trouble in hospitals.

About 17.46 million “discredited” people were restricted from buying plane tickets and 5.47 million were restricted from purchasing high-speed train tickets, the report said.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

Besides restrictions on buying ticket, local authorities also used novel methods to put pressure on untrustworthy subjects, including preventing people from buying premium insurance, wealth management products, or real estate, as well as shaming them by exposing their information in public.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

A total of 3.51 million untrustworthy individuals and entities repaid their debts or paid off taxes and fines last year due to pressure from the social credit system, the report said.

The report highlighted untrustworthy problems at peer-to-peer (P2P) lending platforms and recent high-profile scandals in medical care that have caused public anger.

A total of 1,282 P2P operators, more than half located in Zhejiang, Guangdong and Shanghai, were placed on the creditworthiness blacklist because they could not repay investors or were involved in illegal fundraising.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

Health care product maker Quanjian Group and vaccine maker Changsheng Bio-Technology were added to the creditworthiness blacklist due to their involvement in major health sector scandals.

Quanjian were accused of making false marketing claims about the benefits of a product that a four-year-old cancer patient drank, while Changsheng, the major Chinese manufacturer of rabies vaccines, were fined US$1.3 billion in October after it was found to have fabricated records.

Blacklist labels millions of Chinese citizens and businesses untrustworthy

Lawyers worry that the accelerated use of the creditworthiness system will violate an individual’s right to privacy.

“Many people cannot pay their debt because they are too poor but will be subject to this kind of surveillance and this kind of public shaming. It violates the rights of human beings,” said a lawyer who refused disclose their name.

Mary Greeley News
www.marygreeley.com

credit: In part with https://www.scmp.com/economy/china-economy/article/2186606/chinas-social-credit-system-shows-its-teeth-banning-millions