Envisioning a credit society: social credit systems and the institutionalization of moral standards in China

Introduction

In 2016, the Social Credit System (SCS) in China started to draw global attention. Since then, media reports and surveys have focused on how data-driven technologies facilitate totalitarian surveillance (The Economist, 2016) and render digital Leninism (Browne, 2017). Many scholars identify SCS as a centralized digital surveillance framework controlled by the state (e.g. Creemers, 2018; Liang et al., 2018), and SCS is viewed as having deepened the tensions between the government and the governed (Denyer, 2016). In contrast, other scholars consider SCS a symbolic structure comprised of multiple scoring systems at the municipal level that is not necessarily automated by big data and algorithm, and these scholars also draw attention to the diversity of the scoring and documentation mechanisms across different areas in China (e.g. Ahmed, 2019; Liu, 2019). Moreover, public opinion of SCS in China challenges common-sense expectations. For instance, the educated young people and middle-class citizens in China generally support the monitoring of misbehavior via SCS (Kostka, 2019) but people at relatively high political stakes do not fully agree with the enlarging surveillance paradigm (Liu, 2021).

To make sense of this complexity, a historical view is much needed in order to identify a consistent cultural logic shared by the views of the centralized SCS ¹ or diversified credit systems, which are embedded in both the automated/algorithmic and non-automated coding of SCS and accepted by both the governing and governed social groups. The Chinese SCS was introduced in the early 1990s when state-owned companies, banks, and private organizations in China faced enormous problems with debt delinquency (China Economic Times, 2004). There was an urgent need for a credit system that could effectively handle bad debts and hedge systemic risks in the financial industry. Yet, during that time, credit information was scarce, and no permanent record could be shared among banks. To solve these issues, the Chinese government started to envision a credit economy in which credit information could be collected, recorded, and shared across creditors and borrowers. The national Social Credit System initiative was officially announced in 2003 (China Trade News, 2003; Xinhua News, September 2003). Meanwhile, the State Council constructed an inter-ministerial system led by the National Development and Reform Commission and the central bank to collectively facilitate building the Social Credit System. This was a protracted campaign, however, delayed by the difficulties in information collection and consolidation until digital technologies were adopted for SCS construction in 2014 (Finance China, 2017).

In the early years, media reports described the idea of a ‘social credit system’ either as shehui xinyong xitong (社会信用系统) or shehui xinyong tixi (社会信用体系), and both terms then referred to a general idea of keeping track of individual behaviors or organizations’ business operations. Although in these two phrases the term of ‘credit’ was always prefixed by the word ‘social’, they mostly referred to the financial credit or credit records documented and collected from business and commercial activities. On June 14, 2014, the State Council announced ‘The Outline of the Construction of Social Credit System’, which referred to SCS as a systematic apparatus of data-based governance, leading to the official endorsement of the term as shehui xinyong tixi (社会信用体系). Since then, media reports and public discussions use tixi more than xitong, and the meaning of ‘credit’ or xinyong has incorporated both the financial footprints of the consumers as well as information about their social behaviors.

Globally and historically, credit has been a pivotal metric to assess economic growth and social relations. For instance, ‘credit paper’ was popularized among merchants and consumers in the 18th and 19th century Europe when booming international trade led to a shortage of cash (Laurence, 2014; Poovey, 2008). The credit scoring system operated by credit bureaus in the U.S. provides credit scores for evaluating consumers’ financial identity and their creditworthiness for mortgages or loans (Lauer, 2017). While these practices are supported by distinctive historical or socio-economic conditions, they also share a widely accepted belief in the idea of ‘credit’ – a quantified approach to measuring or predicting the value of business prospects or the trustworthiness of individuals in commercial contexts.

In China, credit systems have played a similar role in the financial context. To provide diverse products and thus expand the financial market, banking and insurance industries have rolled out various kinds of ‘credit programs’ for loan and mortgage services. Since the late 1990s, payment-based records such as households’ utility payments and companies’ tax payment histories are also documented as supplemental materials to evaluate borrowers’ creditworthiness and lenders’ risks (Wang, 2018). Such payment information is usually considered financial data as well as reflections of individuals’ social behaviors and moral standards. The duality of such data helps transform the credit systems composed of financial information into a social credit system. The adoption of data technologies has further expedited and complicated this transformation process.

Drawing on research on the social and cultural meanings of credit in the Western context (e.g. Arena, 1996; Lauer, 2017; Maurer, 2005), this paper examines the social and moral dimensions of the financial and non-financial credit systems that emerged in China in the past decades. Using Chinese media coverage as a source of historical research, we analyze media representations of SCS and study how it is normalized. If the surveillance perspective considers China’s Social Credit System as a political project that turns personal information into an apparatus for centralized control, the ‘social’ then means the dominated and governed subjects. In contrast, a historical analysis of the media discourses surrounding SCS reveals that the ‘social’ actually means making financial credits societal, which indicates a growing recognition of the usefulness of financial crediting (and its replications using non-financial information) in political projects, even in orienting China toward a moral society. In addition, the governing mechanisms unfolded in this paper also reflect a trend that can be seen in many other countries and transcending in the past century, which is the governments start to use people’s information on commercial/social behaviors to classify, sort, and slot the citizens (Lauer, 2017; Fourcade, 2021).

Literature review

The rise of international trade in Europe in the late 18th century engendered the ‘new credit economy’ in Britain (Poovey, 2008). While a large number of commodities were made and circulated in a growing market, the need for cash to exchange challenged existing currency systems. To offset the shortage of metal coins and banknotes, governments, banks, and merchants collectively produced new monetary genres, such as bills of exchange, bank papers, and checks. Non-cash currency became an efficient intermediary, and economists and businessmen started to envision a ‘pure credit economy’, in other words, a cashless society (Trautwein, 1997). Credibility, in this context, is underpinned by the trustworthiness of the providers of those credit papers and is linked to the agreement between the providers and the people who are willing to recognize the value of such papers (Burton, 2008). Thus, a credit economy is also considered a moral economy, in which people commit to a new set of moral and ethical orders when they issue or accept credit-based non-cash currency notes. A credit economy adds new meanings to the idea of morality and forges new categories of identity.

Communication has played a major role in the societal acceptance of a credit economy. New economic theories promoting credit rather than cash as an intermediary were developed and disseminated in editorials and journal articles (Trautwein, 1997). Examples of credit ethics were discussed in nonfiction writing, such as news reports, to demonstrate that credit systems worked well in practice (Poovey, 2008). After ‘a gradual process of ‘naturalization’ (Poovey, 2008: 89), credit systems established their authority, and then eased the social acceptance of surveillance technology and the informatization of everyday economic life (Arena, 1996). In the media, the normalization of new forms of credit systems has been accomplished through a variety of techniques, such as ‘adequation’ ² (Maurer, 2005), capitation of the public ³ (Cochoy, 2007), endorsement by the government (Schulte, 2015), and intellectual authorities (e.g. Makenzie et al., 2007) and techno-social discourse formation (Shahin and Zheng, 2020).

Moreover, digital technologies have helped to grow a credit economy globally. Developing a consumer credit database is considered key to healthy and sustainable e-commerce (Metzger, 2004). Data technology also helps to propel a credit-driven economy that is more efficient in utilizing financial capital for economic development (Schulte, 2015). In recent years, digital technologies, notably the internet of things and big data computing, have enabled the collection of information on people’s everyday lives from their mobile phones, online activities, and social networks. Many countries have started to develop algorithmic governance by using financial credit records as a foundation for building a more comprehensive credit infrastructure (Katzenbach and Ulbricht, 2019). Although the surveillance function of a credit system seems to challenge its legitimacy, credit-oriented monitoring has often been framed in public discourse as a means for lawful governing (Gandy, 1989) and predictive policing (Andrejevic, 2017) rather than the end involving documenting private or confidential information.

In China, the nationwide construction of the corporate credit system started in the 1980s, whereas the consumer credit system was initiated in the early 2000s. In the early years, the credit system was viewed by the public as a benign governing mechanism for regulating the business and financial sectors. It was not until ‘The Outlines of the Construction of Social Credit System (2014–2020)’ was announced that significant scholarly attention was drawn to the social implications of credit scores. Based on the ‘Outlines’, the government could use credit scores to determine a citizen or a company’s access to education, goods, services, and tax deductions. Much research takes the ‘Outlines’ as the Chinese government’s major step toward building a master surveillance project (e.g. Creemers, 2018; Liang et al., 2018). While highlighting the unprecedented collection of social information, past research mostly takes the SCS as a monolithic and top-down system that utilizes digital technologies to reinforce the state’s political and central control. However, the monolithic view of the SCS has overly simplified its social functions and potential of credit-based governing mechanisms.

More recent research identifies a rather complicated idea of SCS in which the credit scoring and recording practices got executed at various municipal levels and in diversified forms (e.g. Liu, 2019; Trauth-Goik and Bernot, 2021). Meanwhile, these systems have been functioning as experimental processes through which a market-based digital governance could possibly be fulfilled (Bach, 2020). Furthermore, these systems, while promoting economic credibility, aim to steer citizen’s social behaviors by using a milder form of regulations, or a moral guide (Ding and Zhong, 2021). Such research has advanced the understanding of China’s SCS by showing its complicated nature that straddles the central state and local administration (including institutions at the regional, provincial, city, or village levels), integrates the government with market, and combines the idea of nomocracy and morality.

What is the socio-cultural or ideological foundation that enables such an overarching apparatus? Also, what makes ‘social credit’ a currency circulated between the economic, political, and social domain, and recognized by the state, market, and public at once? Gearing toward the socio-cultural aspect of SCS, this paper analyzes the historical roots of the SCS and he normalization of the system by examining the relevant media discourses. Specifically, we analyze the stakeholders, rationales, major tasks, and prominent themes mentioned in the news reports and commentaries. These are important components of China’s Social Credit System that have never been examined. Therefore, this research explores the following questions:

Methods

Content analysis is an effective approach to historicizing objects and mapping out cultural foundations (Humphreys et al., 2013). News media often provide access to the public understanding of emerging technologies (Erickson and Howard, 2007). These beliefs underpin our research design in choosing content analysis of news articles to decipher the mechanisms and socio-cultural meanings of SCS.

Findings

To answer Q1, we examined how SCS was represented in media coverage, including the level of interest in this topic, whether SCS was constructed at a national or local level, and what the major tasks (such as information collection, infrastructure and network, and development of digital technologies) were mentioned in covering SCS.

SCS as a long-standing topic of great interest

As shown in Figure 1, news discussions of SCS grew steadily in the early years (between 2003 and 2009). The year 2015 saw the greatest number of news articles discussing SCS. Such patterns are in line with policy changes in China. In 1999, the ‘Suggestions for Building a National Credit Management System’ were proposed at the National Political Consultative Conference by the Political Consultative Committee (Lin, 2019). The idea of an SCS was discussed but not given an official term or instantiated in formal policies. On November 4, 2003, the State Council allocated the central bank 1 billion RMB to construct a ‘national financial credit system’ (Tian, 2003). This initiative was known as part of the ‘1104 project’, a grand information system constructed by the central bank to network and regulate the national banking sector. Following the blueprint for financial credit, the construction of a national Social Credit System was officially listed in the State Council’s Research Report, as well as in the Annual Report of Government Work in 2003. Since then, social credit system had been a long-standing topic in news reports, and these news stories provide a unique resource for interpreting the justifications for the SCS offered by the government and how they have influenced the public understanding of social credit systems in China.

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Figure 1.

The volume of news reports since 2003.

In 2004, the central government founded a research group called ‘The Essential Infrastructure of the National Social Credit System’, aiming to lay the institutional foundation and build up the technical infrastructure for the Social Credit System by 2008 (China Economic Times, 2004). In line with the ‘Five-Year Plan’, news media made increasing efforts from 2003 to 2009 to popularize the idea of SCS. From 2010 to 2012, discussions on SCS cooled somewhat, but it soon returned to the media agenda in 2013 when the central government started to regulate credit referencing industries through Credit Referencing Administration Regulations (Yin, 2014). Thus, policy changes were closely related to media coverage of SCS in China.

SCSs at various levels

The Chinese governance system hinges on the central government (represented by the State Council) and is underpinned by local governments with a certain degree of autonomy and their own agendas (Hu et al., 2017). Accordingly, SCS construction has taken two approaches: the top-down approach led by the central government versus the bottom-up approach driven by local governments. In this paper, the local administration related to SCSs includes regional, provincial, city, or village institutions. One of our goals is to identify the relations between the central government and local governments (zhongyang yu defang guanxi) on the matter of SCS construction. Thus, we put various levels (i.e. provincial, city, or village levels) of SCSs in one category – the ‘local’ SCSs. As is shown in Figure 2, in the early years, SCS was mainly discussed at the national level as a concept desirable for implementation. After 2007, the discussion of SCS was a mixture of policies and discourses at the national level and implementations at the local level. Since 2016, more and more attention has been focused on implementations at the local level.

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Figure 2.

National versus local SCSs, 2003–2019.

Despite the frequent ups and downs of the two trend lines (Figure 2) between 2008 and 2015, the overall proportion of reports on the SCS at the national level decreased, and reports of SCS implementations at the local level increased. Specifically, during the early years, more than 50% of news reports mentioned SCS at the national level but, in recent years, reports on the national-level SCS dropped to less than 30%. Only 34% of news reports mentioned SCSs at the local level, but the proportion of such coverage recently increased to more than 60%. From 2003 to 2006, the majority of news reports were about the national-level SCS (65% on a yearly average), whereas local-level SCSs only accounted for 35% (Figure 2). From 2007 to 2014, media coverage of SCSs was characterized by a similar volume of SCSs at both the local and national levels. After 2016, the coverage of SCSs at the local level exceeded the coverage of SCSs at the national level, suggesting that local-level implementations became more significant.

Major tasks of SCS laid out in the media

Three major types of work are frequently mentioned to explain how the national and local SCSs have been built over the years. These are information collection, infrastructure and network building, and the development and application of data technologies. As is shown in Figure 3, between 2003 and 2013, infrastructural work was said to be the most prominent task when the foundation of the national SCS needed to be built. During this time, an average of 30% of news reports discussed integrating credit databases within industries (e.g. the credit records shared by all the banks) or across industries (e.g. between banks and telecom companies), alliances among multiple credit reference companies (or so-called zhengxin征信) or building a platform through which the investigation of credit records would be accessible to the public. The media coverage on this topic reached a spike in 2005, with more than 56% of related news that year mentioning infrastructure and network building.

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Figure 3.

Major tasks, 2003–2019.

Information collection was also widely discussed. From 2004 to 2008, the significance of information collection was almost parallel to infrastructure building. The information collection was less salient between 2009 and 2013, but it rose to prominence again beginning in 2014, with more than 50% of media coverage in 2014 and 2018, and more than 40% of the news in other years discussing information collection. Between 2014 and 2018, 10% of each year’s news coverage mentioned digital technologies in developing social credit systems. Prior to 2013, the digital approach to credit-based governance was little mentioned by the media, although it was briefly mentioned in 2005 and 2006.

Major SCS stakeholders

To answer Q2 about the major SCS stakeholders, we identified six groups of stakeholders in charge of information collection and credit scoring: the government (including the central government, the local government, and administrative agencies at local and central levels), the central bank, commercial banks, non-government organizations (such as the chamber, industrial association), credit reference industry (zhengxin ye 征信业), and other industries (such as telecom companies). In general, the government and central bank have played a leading role in the construction of SCS (see Figure 4). Each year, around 50% of news articles mentioned the government as the key player. In 2003, 23% of news articles mentioned the central bank as the key player, the next year 48%, and the mention increased to more than 70% for another three consecutive years. Since then, many media reports took the central bank as the leading actor of SCS construction.

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Figure 4.

Mentions of stakeholders, 2003–2019.

The other four groups of players were relatively minor in the media discourse. Each of them accounted for less than 10% of the news stories, except that the role of credit reference companies (zhengxin gongsi 征信公司) was highlighted in 2004 (21%), and between 2014 and 2016. In 2015, about 43% of news articles mentioned the role of the credit reference industry and the percentage was larger than that mentioning the central bank in that year. Media reports also reflected the rise of these players in particular years. For example, more than 10% of news reports highlighted the role of chambers, industrial associations, and other forms of non-government agencies that helped the government regulate the market. Between 2015 and 2017, other industries took up around 10% of media coverage as major actors in building SCS.

Rationales for implementing SCS

To answer Q3, we examined how media coverage justified the SCS implementation in China. We specifically looked at the primary rationales and whether foreign (mostly Western) countries were mentioned as a means of justification. The majority of the news articles mentioned why China, a specific province, or an industry needed to develop a social credit system. We summarized these rationales and put them into four categories: (1) an SCS facilitates economic reforms and contributes to economic development (ED), (2) an SCS helps maintain social stability and promotes law-abiding behavior and thus is vital for social governance (SG), (3) an SCS can promote moral standards and the pursuit of virtues by reining in immoral behaviors (MC), (4) an SCS is part of identity construction (IC) and social credit scores constitute personal identity (e.g. black-list) or business reputation (e.g. The 100 Trustworthy Companies).

When SCS was first introduced to the public, promoting economic development was the most prominent rationale in news coverage, but this was soon replaced by moral construction as the persistent top rationale for a decade. News reports did not highlight identity construction during the early years, but this became increasingly significant over the next decade. Based on the specific proportions of report numbers, Table 1 lists the rankings of proportions by year to indicate the significance of the four rationales in each year.

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Table 1.

Rankings of by-year proportions for four types of rationales.

Years		Economic development	Social governance	Moral control	Identity construction
2003	No.	1	3	2	4
2004	No.	1	3	1	4
2005	No.	2	3	1	4
2006	No.	2	3	1	4
2007	No.	2	2	1	4
2008	No.	2	4	1	3
2009	No.	2	4	1	3
2010	No.	1	1	3	4
2011	No.	2	3	1	4
2012	No.	1	3	1	4
2013	No.	2	4	1	2
2014	No.	2	3	1	4
2015	No.	3	2	1	4
2016	No.	4	3	1	2
2017	No.	4	3	1	2
2018	No.	4	2	1	3
2019	No.	3	2	1	4

Referencing foreign practices

SCS in China is also normalized by introducing international experiences as successful cases that have benefited economic and social development. As is shown in Figure 5, international experiences were mentioned in news coverage as a way of justifying SCS, but the number of foreign references gradually declined over time. In 2003 and 2004, more than 26% and 21% of news articles mentioned social credit systems in foreign countries respectively. Between 2005 and 2007, a little over 10% of reports mentioned social credit scoring in other countries. From 2008 to 2013, when Chinese media presented a mixture of national-level and local-level SCS constructions, the references to other countries were at a minimum, reaching zero in 2008 and 2010. Since then, less than 10% of news reports have mentioned foreign SCSs, with the only exception in 2014 (more than 16%) when the detailed plan for building a national SCS was announced by the State Council.

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Figure 5.

Percent of news reports mentioning foreign credit systems.

Major themes of SCS media discourse

To answer Q4, we examined the dominant themes in media coverage of the SCS over time. The SCS stories in the last decade have hinged on six themes: institutionalization, promotional activities, incentive, punishment, marketization, and side effects (see the specific meanings of each theme in Appendix 1). The largest proportion of news articles talked about institutionalization (or zhidu hua 制度化). More than 30% of the news stories showed the readers that the State Council and local governments were gradually integrating the SCS into formal governing mechanisms. The discussion of this formalization process peaked in 2014 (more than 54% of news stories) when the detailed steps of constructing a pilot SCS were announced. In addition, the amount of news on the side effects of SCS was stable (about 15% of news stories each year).

The news coverage mentioned both incentive and punishment, but overall, news reports assigned less space to incentive than punishment (see Figure 6). While around 20% of news reports elaborated on the penalties resulting from low social credit scores, only about 5% of news stories showed the benefit and rewards of having higher social credit scores. Although social credit system was coined by the central government, from the very beginning, there was discussion of marketization of SCS (see Figure 6). Between 2003 and 2005, around 15% of news reports advocated for private companies to monitor, collect, and process social credit information. However, between 2006 and 2013, the media was reticent to mention private credit reference companies. Starting in 2014, marketization was put back on the media agenda and became the most often mentioned theme in 2015.

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Figure 6.

Mentions of major themes.

Discussion

While the idea of the social credit system was initially constructed by the national government, it was gradually concretized at the local level when specific implementation measures were considered at the provincial and local levels. This is indicative of the general top-down approach to implementing policies in China. In the meantime, the successful experiences of a provincial or local government were often reported by national media so that other regions could learn from them. This is reflected in the mixture of news coverage on social credit systems at both the national and local levels from 2007 to 2014. Recently, coverage of the SCS at the local level was more prominent because local governments are now taking specific measures to implement the SCS.

Pilot programs at the local level were followed by the creation of formal policies at the provincial and national levels. Credit and the applications of credit are gradually turned into formal rules and adopted by the government. At the micro-level, SCS matters for people’s everyday lives and social rankings since it relates to specific punishments and incentives for their social behaviors or business practices. For instance, in 2006, the Hunan provincial government started to document the list of construction companies that delayed the payment of wages to their employees. Such records would be counted as a ‘stigma’ on the companies’ social credit ratings (qiye xinyong wudian 企业信用污点) and the stigmatized companies would be challenged upon their annual renewal of business licenses (Changsha Evening News, October 31, 2006). The predominant use of punitive measures rather than incentives to promote SCS also reflects general governing practices in China, where the central and local governments control a wide range of resources and exert tremendous powers in regulating private organizations.

The central bank and the government have been leading the construction of SCSs, while a wide range of actors are also involved. The Ministry of Industry and Commerce Management, the Ministry of Civil Affairs, the Ministry of Ecology and Environment, and many other institutions play a collaborative role in policymaking and implementation. The National Leading Group of Rectify and Regulation Market Economy Order was the administrative office for the construction of the social credit system in the early years, and their major task was to collect and document information on business transactions and social behaviors. Before 2014, the major tasks were implemented by these institutional actors, whereas in recent years, digital technologies have played a large role in building up and networking databases. Data algorithms and standardized scoring metrics also allow for the evaluation of the trustworthiness of an individual or a business entity.

Various key players have partnered with each other to promote SCS not only through the media but also through marketing campaigns. For example, the slogan of ‘wu jin’ (five get-ins 五进), coined in Hubei province in 2013, clearly reflected typical venues and promotional strategies: (let the idea of SCS) get in government agencies, get in neighborhoods, get in villages, get in enterprises, and get in college campuses (Suqian Daily, March 22, 2013). Local banks routinely promoted their credit reference services in these places. Many other cities adopted similar strategies to explain and promote the concepts of ‘credit’ and a ‘credit society’ to the public via seminars, brochures, and street-side booths.

Four types of rationales have been used to justify SCSs in China. With an under-established legal and regulatory apparatus in the late 1990s, the central government had to invent a set of institutions to regulate unethical or questionable business practices, such as tax evasion, fraud, and counterfeit and shoddy products. The government needed to hedge financial risks, particularly to lock out the debt dodgers from bank loans by recording their credits. As economic laws and regulations became more developed, SCS switched its focus to moral construction – controlling social behaviors and maintaining moral standards, thus tying the SCS to ethical standards, particularly to honesty and credibility, concepts that have been historically regarded in the Chinese culture. In this way, SCS defines credit as an identity: the extent to which one is trustworthy. ⁴

Another major theme centers on the debate of whether the state or the market should operate SCS. Between 2003 and 2005, the media accommodated multiple voices: some supported the dominance of the central bank, while others advocated for third-party private companies as neutral agencies for crediting and scoring practices. Between 2006 and 2013, the central bank was a dominant voice in the media, and the central bank also encouraged business chambers and associations to develop social credit systems and document unethical practices by their member companies. ⁵ With a strong push for marketization between 2014 and 2016, mentions of non-government credit referencing companies as key players increased significantly in media coverage during this time. Since 2014, the central bank has moved into the background, and more private companies have joined the credit reference industries.

Media coverage also discussed the implication of SCS for digital governance. For example, reports on the rise of digital payment companies such as Ant Financial and Tencent Finance emphasized that these companies have collected and kept a massive amount of credit data from individuals and small and micro-enterprises. These companies have partnered with Baihang, a private credit reference agency licensed by the central bank, and the credit information is publicly available for credit investigations (Southern Metropolis Daily, May 24, 2018). Such massive databases were often discussed in terms of convenience, efficiency, accuracy, and the establishment of an open, fair, modern governing system. Nevertheless, some media did mention possible side effects, questioning how the monopolizing central bank and telecommunication companies can protect the privacy and guarantee fair and reasonable scoring practices. ⁶

Conclusion

This research shows that the idea of the social credit system emerged against the backdrop of protracted social and economic battles that were present in Chinese society since the 1990s. The construction of a variety of credit systems started as a series of efforts toward developing the credit economy but later became a vision for the credit society. In this process, media discourses have promoted and normalized the equation between the ‘social credit system’ and moral standards among the Chinese public. The former embodies distinct forms and meanings in various historical and administrative contexts which all congregate on upholding traditional moral standards during economic reforms, a crucial time when the central government has gradually lost influence over individuals’ moral character constructions. The technologies and political dynamics involved in this process are crucial, but it is really the socio-cultural aspects of financial credit that make the social credit system a prominent idea.

In the 1990s media reports, financial credit systems have been considered an effective solution to the rising chaos in China’s transition from a planned economy to a market economy. Against the backdrop of marketization in the 1980s, China needed a new set of governing mechanisms to maintain order in the booming market when the system of commercial laws was lagging behind. Although initiated for economic and business ends, such mechanisms are essentially social because, on the one hand, a credit system joined by various actors was considered a self-governing mechanism: local governments were expected to find ways to manage private sectors, industry associations to regulate unfair competition in individual business sectors, and consumers and citizens to abide by moral standards. On the other hand, the media discourse also portrayed it as a public project that would benefit all the participants.

Along this dimension, increasing news reports and op-eds adopted the idea of a ‘social credit system’ to emphasize that the shared vision of constructing a credit economy through recordkeeping and credit scoring has been extended to building a credit society. Thus, the evolution of the financial credit system and its application in social governance is a societal project and requires societal commitment. In this process, ‘social credit system’ has developed two-fold meanings: (1) it was first applied only to business entities but later also to citizens, and (2) it was initiated to document unlawful or unethical economic activities but later also extended to people’s moral behavior for reward or misdeeds for punishment. These socio-cultural meanings of credit paved the way for the societal acceptance of the SCS.

In practice, these meanings are realized via four approaches. First, the credit system was extended to cover a wider spectrum of social units – from state-owned businesses to small and medium-sized companies. The lack of credit information (both organizational and individual) was a problem impeding the government’s goal of developing the market economy in China. Specifically, many small and micro enterprises needed commercial loans to expand their production and distribution channels, but the banks were cautious about funding them due to their absence of credit records. When these companies got loans from shadow banks, the interest rate was so high that the default risk also influenced the stability of the overall economy. Building up the ‘credit checking’ (or zhengxin 征信) system was the very first step to solve these issues.

Second, social credit systems arose amid the paradoxical transition from a party-controlled system to a system ruled by law. The large number of unethical and unlawful cases at the early stage of opening-up reforms forced the Chinese government to consider ‘morality’, an ideological flagship that had been held up since Confucius, as a panacea for problems of various kinds. This solution needed societal commitment to make it effective, and media and communication have played a significant role in popularizing the idea of social credit. In addition, the idea of personal credit (geren xinyong 个人信用) was put on the news agenda, whereas the previous discussion primarily focused on the credit assessment of companies and business entities. This was the turning point at which the idea of commercial credit was transformed into the idea of social credit. While credit was applied to specialized activities (particularly business loans) in the past, personal credit now ensures unified metrics that are used to evaluate the trustworthiness of all organizations and individuals.

Third, the historical narratives of the social credit system suggest that its development has been accompanied by the government’s loosening control over private enterprises. While the credit database in the past was monopolized by banks (mostly state-owned or controlled) with no participation by third parties, which often caused corruption and bad debts, the credit-scoring system being run along with private companies means that the finance sector has shifted from being controlled by the state to being regulated by the market, or managed by private companies. This move created a space for tech companies to join the SCS construction and apply data technologies in this societal project.

Lastly, SCS documents social behaviors to evaluate the creditworthiness of both individuals and businesses and this system is thus more flexible and can encompass a wide range of data. Unlike the unified demographic profile including aspects such as education, income, and occupation, social credit systems adopt plural metrics that include dimensions such as filial respect for elders, professional ethics (particularly in the insurance and marketing industries), environmentally friendliness, and business innovation. In addition to specified metrics, creditworthiness can also be a generalized goal subject to collective efforts. For example, in the Year 2002 Annual Government Work Report by the Mayor of Nanjing City, the slogan of ‘Building a Creditworthy Nanjing City; Being a Trustworthy Nanjing Citizen’ was coined to promote an ideal municipal environment and a type of desired citizenship (Nanjing Daily, January 20, 2003). In this vein, future research could specify how SCSs are constructed thematically in different areas or at various local (including provincial, city, or village) levels.

The decade-long normalization of social credit systems in Chinese media has legitimized credit scores as new metrics that can redefine economic identities and moral standards in China. With the prevalence of big data, The idea of social credit system has thus become an explicit cue (Xu and Liao, 2020) that influences people’s engagement with information technology and leverages their behavior in public settings. Compared with digital governance systems in other countries, the social credit systems in China carry unique features due to their particular political, cultural, and ideological backgrounds, thus inviting research beyond the surveillance framework. In the meantime, the Chinese SCSs can also be considered part of the global trend in which the cultivation of ‘ordinal citizenship’ has become a leverage point in the new state-public relations (Fourcade, 2021).