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Comment by pxue | Hacker News Reader

i don't think you understand the premises of how one ends up on the bad list.

"owing" money means you borrow from secondary lender, using it to buy risky assets. you essentially played with fire and got burned. lots of cases like this where these "businessmen" loses money and then declared bankruptcy, refusing to pay anyone back.

sounds a lot like wallstreet doesn't it? are you okay with what they did?

this is government way saying enough is enough.

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Yeah I'm no CCP supporter but sick of the bad takes on this. China has no national credit reporting system and it's very difficult to enforce civil court judgments across city/provincial lines. "Social credit" systems are mainly intended to help with this problem. The person in the article is in trouble for not paying his debts, not political activity or having the wrong friends.

I'm sure the CCP would love to use social credit as another tool of repression, but for now they're having enough trouble getting a normal credit reporting system going.

I'm not sure what to make of your scare quotes, but none of what you wrote, on its face, sounds wrong to me.

1. If a lender lends me money, they're shouldering the risk that I may not repay the loan. That risk should be priced appropriately.

2. Bankruptcy is a valid concept.

3. What Wall Street did was misjudge the risk of their products (whether intentionally or not). Sounds like what the lenders in your example are doing.

But the government is punishing the risk-takers. Not sure that's a good way to promote entrepreneurship or innovation. The bankruptcy alone should serve as the deterrent (and signal to future lenders)

All your points are valid. However you're only looking at it in a way that's familiar to you.

Here's a personal example, my parents bought a condo in China in a new development area, searched around for renovators and found this shop close by that seemed fairly legit. A show room, full staff, decent looking portfolio, sales people looked legit and they had legit looking supply chain relationship as well.

My parents worked out a project scope and plan, estimated the cost, put down 25% for down payment. The shop came in, did a month of work and then disappeared. Job was half done. what happened? They went "bankrupt".

Are the shop owners risk takers? Maybe. Did they really try to start a business? Honestly they probably saw an opportunity where a new development area was coming up and came in for the quick buck. Borrowed some money, set up shop to a decent level and then disappear.

This isn't an isolated case, lots of examples exist. Am I saying this is the case for everyone? No. But its gotten bad enough that the government had to do something about it. Is it my parents fault for not doing more due diligence? Probably. But it's really really tiresome if you had to do this every. single. time. for everything.

You're right. Thanks for the detail.

As far as I know, (and correct me if I'm wrong), China didn't have a credit score system as developed as what we're used to in the US (i.e. Equifax, TransUnion, etc.)

But what the social credit system represents is a leapfrog over that to something much more invasive and ubiquitous. I don't want to know if my contractor once smoked in a no-smoking area, of if they buy too many video games. But I do want to be able to check their contractor's license and make sure there aren't complaints.

> I don't want to know if my contractor once smoked in a no-smoking area, of if they buy too many video games. But I do want to be able to check their contractor's license and make sure there aren't complaints.

Some of the pilot projects are intended to work more like that. For example, if you wanted to confirm that "Wenzhou Overseas Travel Ltd." is legit, you could check Wenzhou's portal and search for the name. https://wzcredit.gov.cn/creditSearch/getCompanyDetailInfo.ht...

Then you can see some basic information about the company (legal representative Chen Lili, services offered, address, registered capital of 10 million Yuan, founded in 1998...) and then a bunch of information that's supposed to help evaluate their creditworthiness or look them up in other systems. The section for negative information (underlined in orange) is empty. The most recent data is from 2017, though, so who knows whether the system is even updated anymore.

Yeah, and that's fine. Especially for corporations and other fictitious entities. It's the highly personal aspects of this system that disgust me. The personal habits and nickel-and-dime shit that it vacuums up to determine a score.

While not an expert myself, when I have looked deeper into the reporting that makes claims like this, I often find that they're speculating based on one-off statements, not describing an actual extant system. I feel like the US media, even the most respectable publications, don't take appropriate care to separate fact from fiction re: social credit.

For example, I found this article really surprising: https://foreignpolicy.com/2018/11/16/chinas-orwellian-social...

Honest question, isn't this same big data technical effort supporting the round up of Uighurs[1]?

I get that the main story is about a debtor and credit, but the concept of stratification based on surveilence-data is word-for-word 1984.

[1] https://www.reuters.com/investigates/special-report/muslims-...

Rounding up Uyghurs doesn't require fancy big data at all. Everyone's ethnicity is already recorded on their national ID card, and by now that information can be expected to be digitized and easily searchable. To get a phone number, you need to register with your ID, so the government gets location tracking basically for free.

All of that is a completely different technical effort to the credit blacklist discussed here.

Well, what I'm saying is that I'm not certain that the social credit system is actually an effort to surveil and stratify all people in China. My understanding is that, in its current form, it only targets irresponsible business owners.

The Uighur roundup - that just sounds like standard colonialist violence to me. I don't see how it's specifically a 'big data' issue, nor how it's related to social credit.

Yes. It could become Orwellian, and I do see the issue with what a comprehensive surveillance state could become.

Either way, China faces a very unique situation, but I do see overall improvement in living condition. I don't live there full time but visit often, I'd say the biggest challenge coming up will be dealing with the aging population (and their needs), the shrinking work force, and decrease in consumer confidence. The post-boomer generation did VERY well for themselves but I can't say the same for the millennials and beyond.

China does have bankruptcy laws, but in this case "One creditor said the company was a sham from the beginning, with fabricated expenditure and cooked books." The debtor running with the money is not something you can simply price into the loan risk, which is why financial fraud is usually illegal. Maybe the creditor was lying to avoid the debt being discharged in bankruptcy, maybe he even bribed the judge to get that verdict, but that's not a problem of the blacklist but of the rest of China's judicial system. The inconvenience of being blacklisted is specifically intended to make people pay back money they falsely claim not to have (which is why it targets expensive "luxury" goods).

I don’t understand how someone ends up on the list. But I’m fairly certain I understand it more than you do.

You can be put on the list for all sorts of things...

“examples of infractions include bad driving, smoking in non-smoking zones, buying too many video games and posting fake news online.”

Being a problem for local party officials too. Pretty hard to campaign against corruption if you are barred from travel and other systems.

no, not really.

You may be certain that you understand the list (this one http://zxgk.court.gov.cn/shixin/), but you are mistaken. You probably read an article about the "social credit system" that got the details wrong.

Getting put on the list is a punishment that can be ordered by a court for various infractions, but not buying video games, because (unlike the other three) it is merely frowned upon, but not illegal. Discouraging video games was part of one companies' private implementation of a "social credit system". The list is another "social credit system". Various local governments within China are also running their own pilots.

Those systems are not connected yet. It is expected that eventually the Chinese government will decide on one implementation by selecting parts of the pilot projects, but it isn't clear which parts. Until that happens, buying too many video games isn't going to ban you from taking high-speed rail.

Isn’t this he same as how diversely family planning laws used to be enforced? Every company/locality will come up with their own thing because the central government isn’t as powerful/focused to do something on its own. Which is good or bad depending on how you look at it.

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