Open-Borders Biden Moves Ahead With Fence Around His Delaware Beach House
President Biden has done virtually everything in his power to prevent a secure border between the United States and Mexico. He took action to halt construction of a physical border wall, his administration has enacted lenient policies that allow illegal immigrants to stay in the United States without penalty, and his open-border policies mean border agents are spending more time processing the illegal immigrants they areable to capture leaving the border unguarded against even more nefarious illegal crossings.
But in another case of Democrats following the “security for me but not for thee” mantra, it seems President and First Lady Biden are pressing ahead with plans to put a fence around their house in Rehoboth Beach, Delaware. Not just some little white picket fence either — a significant fence. Like one so substantial that the Bidens have to seek a variance from the county in order to get permission to build it.
According to Land Use Application 12668 posted to the Sussex County website, “Jill Biden seeks variances from the maximum fence height requirement for proposed fences” around the Bidens’ home “located on the east side of Far View Road within the North Shores Subdivision.”
The variances requested by Jill Biden, as listed in the hearing docket, include Section 115-185 of the Sussex County Zoning Code which reads, in part:
Any fence or wall for residential use, not more than 3 1/2 feet in height, may project into or enclose any required front or side yard to a depth from the street line equal to the required depth of the front yard. Any fence, hedge or wall for residential use may project into or enclose other required yards, provided that such fences, hedges and walls do not exceed a height of seven feet. This height limit does not apply to fences or walls used for commercial, industrial or agricultural uses, screening or tennis courts.
But, as The Cape Gazette reported, “the Bidens are looking to build a 4-foot-tall stone wall along the front of the house” and “a 10-foot-tall fence with stone columns along the sides and a 10-foot-tall aluminum fence along the rear of the house.” Hence the need for variances from the county.
Back in September, Julio reported that the Department of Homeland Security had awarded a $456,548 contract to purchase and install security fencing at the same address for which the Bidens now seek the variances. The fencing was initially slated to be finished by December 31st, but the plans have apparently been delayed.
So while Biden continues to undermine America’s border security, he’s busy seeking an exemption to zoning laws in order to build a physical barrier around his home near the beach in Delaware. Because of course. Just as Democrats issue calls for law abiding citizens to be stripped of their right to keep and bear arms while enjoying the protection of armed guards or demand Americans give up reliable and cheap energy sources while flying around in private jets, so too is Joe Biden saying border walls aren’t necessary to secure the homeland but a fence is needed to keep his own home safe.
China Quietly Buying Russian Oil As Kazakhstan Says CPC Terminal Halt To Last; Nigeria Reveals 95% Of Oil In Key Pipeline Drained By Thieves
BY TYLER DURDEN
THURSDAY, MAR 24, 2022 – 08:30 AM
Days after we reported that India stubbornly refused to yield to western pressure and continued to buy cheap Russian crude oil at a discount of around $30 to dated brent…
… today Bloomberg reports what we have known all along, namely that China’s oil refiners are “discreetly” purchasing cheap Russian crude as the nation’s supply continues to seep into the market.
However, unlike India’s state-run oil refiners, which have issued a number of tenders seeking to buy Russia’s flagship Urals crude among other grades, traders say China’s state processors are negotiating privately under the radar with sellers so as not to make their support for the Putin regime too glaring in light of Western opposition.
At the same time, China’s worst virus outbreak since the start of the pandemic has led to some oil refiners cutting back operations and is forcing analysts to rethink their demand estimates.
So on one hand, the Covid-19 resurgence is posing a threat to global oil consumption and may accelerate demand destruction, helping to rein in bloated prices that soared on Russia’s war in Ukraine, but on the other it seems the world is about to be hit with another lengthy disruption.
As we first reported yesterday, Kazakhstan today said that it expects the halt of the CPC export terminal on Russia’s Black Sea coast to last about 1 1/2 months, Energy Minister Bolat Akchulakov said on local business TV channel Atameken after it emerged Tuesday that oil shipments to the facility will be significantly disrupted.
In response to Russian depity prime minister Novak who said that repairs could take as long as two month, Akchulakov said the halt will be only “three weeks, a month, maybe a bit more” (read: it will be a “bit more”), with the Kazakh minister saying he expects CPC has the spare parts needed for repairs.
Yesterday, we noted that Russian and Kazakhstan oil exports via the Caspian Pipeline Consortium (CPC) from the Black Sea may (read: will, now that all commodities are weaponized) fall by up to 1 million barrels per day (bpd), or 1% of global oil production, due to storm-damaged berths, a Russian official said on Tuesday.
And in another potential supply-chain snag, on Thursday a Nigerian labor union said that Nigeria is losing nearly all of its oil output pumped through a major pipeline, in what Bloomberg calls the latest example of an increase in theft that’s accompanied a surge in crude prices, according to a labor union.
Producers received as little as 5% of crude volumes pumped through the Trans Niger Pipeline between October 2021 and February 2022, with the fuel being illegally tapped in about 150 places, according to the Petroleum and Natural Gas Senior Staff Association of Nigeria. Vandalism was also a major contributor to the losses, the union said.
The losses are having an adverse impact on government revenue and foreign-exchange reserves, Central Bank Governor Godwin Emefiele said in a briefing on March 21. Africa’s largest crude producer has struggled to meet its OPEC+ quota despite rising oil prices following Russia’s invasion of Ukraine.
“How can we be losing over 95% of oil production to thieves?” Tony Elumelu, a Nigerian billionaire who owns investment firm Heirs Holdings, said on Twitter last week. “It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!”
The government is intent on tackling oil-related crime, Timipre Sylva, Nigeria’s minister of state for petroleum resources, said on Wednesday while visiting sites where the stolen crude is processed.
“We are determined to stop it, because we know that we can ill-afford the continuation of this insecurity in the oil industry,” Sylva said, according to the remarks posted on Twitter by the state-owned Nigerian National Petroleum Company Ltd.
Order Out Of Chaos: How The Ukraine Conflict Is Designed To Benefit Globalists
Post Views: 60,047
By Brandon Smith
Within the next couple of months it is likely that there will be direct US military involvement in Ukraine, with Russia now openly supporting and recognizing separatist groups in the Donbass region on the eastern edge of the country and apparently moving to aid them militarily in separation. This is not the first time Russia has sent military units into Ukraine, but it is the first time since 2014 and the annexation of Crimea that the threat of military action has been overt rather than covert.
When conflict erupts, you are going to see a swarm of media stories in western nations trying to outline the complexity of the relationship between Russia and Ukraine since the fall of the Soviet Union, while ignoring certain inconvenient truths. You will see many of these stories construct a narrative which then oversimplifies the situation and paints Russia as the monstrous aggressor. The goal will be to convince the public that our involvement in Ukraine is a moral and geopolitical necessity. There will be attempts to gain American favor and a call for US boots on the ground. Joe Biden will be at the forefront of this push.
The surface trigger for the confrontation is obviously rooted in the 2009 decision by western powers and Ukrainian officials to consider the country for membership in NATO. Most of Russia’s actions when dealing with Ukraine can be owed to NATO involvement in the region, including the Russian invasion of Crimea in 2014. Strategically, it makes sense. Imagine if Mexico suddenly announced it was joining a military alliance with China and that Chinese military assets were going to be transferred near the US southern border? It probably would not end well.
To be sure, Russia has a history of hypocritical behavior when it comes to its involvement in the affairs of its neighbors. For example, only a few months ago Kazakhstan was facing mass protests which the government claimed were caused by “foreign manipulation.” Zero proof was presented to justify this assertion. However, the claim was enough to rationalize the deployment of 2300 Russian troops over the border to shut down the protests.
In reality, citizens of Kazakhstan were angry over a spike in inflation and high gas prices which continue to grind down the middle class and those in poverty (sound familiar?). In 2019, only 4% of the population lived under the official poverty line. In 2020, that number exploded to 14% of the population. Accurate numbers are difficult to find for 2021, but it is likely that poverty levels are now closer to 16%-20%. The reasons for civil unrest were obvious and justified, but the protesting Kazakhs were accused of being pawns of foreign enemies. As I have noted in many articles lately, this is a typical strategy of corrupt governments trying to retain power when the people rise up and rebel for legitimate reasons.
Again, imagine if the Canadian government under Trudeau asked for US military assistance in scattering the trucker protests against his draconian vaccine mandates? We need to look at these decisions in context in order to grasp how insane they really are.
Ironically, Russia is happy to support the unrest of separatists in Ukraine while also helping to silence unrest in Kazakhstan. Keep this pattern in mind because it will help in understanding how events surrounding Russia reflect a global trend that might effect Americans in the future.
The diplomatic mess between Ukraine and Russia can be blamed in part on both sides, and it’s this kind of historical ambiguity where globalists tend to thrive. The fog of war helps to obscure establishment activities and often it is hard for people to see who is truly benefiting from the chaos until it’s too late. It is my belief that the Ukraine problem is at least partially engineered and that it is designed as a first domino in a chain of intended crises.
I don’t think there is anything unique to the Ukraine conflict for the globalists; they could have just as easily tried to initiate a regional war in Taiwan, North Korea, Iran, etc. There are numerous powder keg countries that they have been cultivating for a couple of decades. We should not hyperfocus on who is to blame between Ukraine or Russia, we should focus on the effects that will result from any major regional disaster and how the globalists exploit such catastrophes to further the agenda of total centralization of power.
The Ukraine scenario could be easily defused if both sides took some basic diplomatic measures, but this is not going to happen. NATO officials could take a step back from their pursuit of adding Ukraine to the ranks. The US could stop pouring cash and weaponry into Ukraine to the tune of $5.4 billion since 2014. Over 90 tons of military equipment has been sent to the country in 2022 alone. Russia could stop sending covert special operations units into the Donbass and be more willing to come to the table to discuss diplomatic solutions. The reason these things do not happen is because they are not allowed to happen by the power brokers behind the curtain.
We are all aware of the globalist influences behind US and NATO leaders, we present the undeniable evidence of this on a regular basis. Biden’s penchant for globalist institutions is well known. But what about Russia?
There are some in the alternative media and the liberty movement who falsely believe that Russia is anti-globalist – Nothing could be further from the truth. As with many political leaders Putin will sometimes use anti-globalists rhetoric, but his relationships tell another story. In Putin’s first autobiography, titled ‘First Person’, he discusses with fondness his first encounter with New World Order globalist Henry Kissinger as a member of the FSB (formerly the KGB). As Putin rose through the political ranks he maintained a steady friendship with Kissingerand to this day they have regular lunches and Kissinger has been an adviser to multiple branches of the Kremlin.
It doesn’t stop there, though. Putin and the Kremlin have also kept a steady dialogue with the World Economic Forum, the project of the now notorious globalist Klaus Schwab. In fact, only last year Russia announced it was joining the WEF’s “Fourth Industrial Revolution Network” which focuses on economic socialization, Artificial Intelligence, the “internet of things” and a host of other globalist interests which will all lead to worldwide technocracy and tyranny.
Again, the Russian government is NOT anti-globalist. This claim is nonsense and always has been. I would attribute the fantasy of Russian opposition to a steady stream of propaganda and what I call the False East/West Paradigm – The fraudulent notion that the globalist agenda is a purely Western or American agenda and that countries like China and Russia are opposed to it. If you look at the close interactions between the east and the globalists, this idea completely falls apart.
It’s important to understand that most conflicts between the East and the West are engineered conflicts and the leaders of BOTH SIDES are not really at odds with each other. Rather, these wars are Kabuki Theater; they are wars of convenience to achieve covert ends while mesmerizing the masses with moments of terror and calamity. For anyone who has doubts about this, I highly recommend they read the thoroughly researched and evidenced works of professional historian and economist Antony Sutton, who quite accidentally stumbled onto the facts surrounding the globalist conspiracy and went on to expose their habit of playing both sidesof nearly every war over the past century from the Bolshevik Revolution to WWII and onward.
The strategy of order out of chaos is nothing new, it’s something the globalists have been doing for a very long time. The number of open revelations post-Covid about the ‘Great Reset’ that globalists have publicly admitted to is so staggering that their plans can no longer be denied. Any skeptics at this point should be suspected of having a single digit IQ.
So, now that we have established the reality of globalist involvement in both the west and in Russia, we need to ask ourselves how they benefit from initiating a crisis between these powers over Ukraine? What do they get out of it?
As I have noted in recent articles, it appears to me that Ukraine is a Plan B attempt to conjure more smoke and mirrors where the covid pandemic failed to satisfy the Great Reset plan. As Klaus Schwab and the WEF has constantly asserted, they saw the pandemic as the perfect “opportunity” to force the Fourth Industrial Revolution on the world. As globalist Rahm Emanual once opined in the wake of the 2008 economic crash:
“You never want a serious crisis to go to waste. And what I mean by that is it’s an opportunity to do things that you think you could not do before.”
The WEF is an old hand at this tactic. Klaus Schwab also used the same exact language right after the credit crash of 2008 as he has used after the spread of covid, always trying to sell global governance as the solution to every disaster:
“What we are experiencing is the birth of a new era, a wake-up call to overhaul our institutions, our systems and, above all, our thinking, and to adjust our attitudes and values to the needs of a world which rightly expects a much higher degree of responsibility and accountability,” he explained. “If we recognize this crisis as being really transformational, we can lay the fundaments for a more stable, more sustainable and even more prosperous world.”
– Klaus Schwab on the Global Redesign Initiative, 2009
Schwab jumped the gun back then just as he jumped the gun in 2020 when he declared the Great Reset an inevitability in the face of covid. The globalists must have expected a much higher death rate from the virus because they were practically dancing in the streets, elated over the amount of power they could steal in the name of “protecting the public from a global health threat.” If you look at the WEF and Gates Foundation simulation of a covid pandemic, Event 201 which was held only two months before the REAL THING happened, they clearly expected covid to do way more damage, predicting an initial death tally of 65 million. This never happened; it isn’t even close.
It’s hard to say why an obvious bioweapon like covid failed to do the job. Viruses tend to mutate rapidly in the wild and behave differently than they do in a lab setting. I would even consider the possibility of divine intervention. Whatever the reason, the globalists did not get what they wanted and now they need yet another crisis to oil the gears of the Reset machine. With the already tiny death rate of covid now dropping even further with the Omicron variant and half the states of the US in full defiance of the vax mandates it is only a matter of time before the rest of the world asks why they are still under medical authoritarianism?
War in Ukraine and the mere threat of that war expanding beyond the region could accomplish a number of things covid has not. It provides an ongoing cover for the stagflationary collapse which is now in full swing in the US, the supply chain problems that continue globally as well as the destabilization of the European economy. In particular, the EU is strongly reliant on Russian natural gas in order to heat homes and maintain its economy. Russia has strangled natural gas supplies to Europe in the past and they will do it again. Russian oil exports also fill demand gaps globally, and these exports will be strangled by sanctions or by the Kremlin deliberately cutting supplies to certain nations.
War is always a distraction from economic sabotage. Even though the seeds of financial crashes are often planted and watered well in advance by central banks, the banks never get the blame because international conflicts conveniently take center stage. By extension, economic crisis causes mass poverty, mass desperation, and mass hysteria, and globalists will say that these dangers require an international solution that they will happily provide in the form of centralization.
In the US and in many other western nations which have a large number of people still defending individual freedom, the globalists clearly want to use tensions with Russia as a means to silence public dissent over authoritarian policies. Already I am seeing numerous instances of establishment officials and leftists on social media suggesting that liberty activists are “pawns of the Russians” and that we are being used to “divide and conquer.” This is nonsense backed by nothing, but they are trying out the narrative anyway to see if it sticks.
I have no doubt that any rebellion in the US against the globalists will be blamed on foreign interference. As mentioned earlier, the last thing the elites want is movements of free people obstructing the Reset in the name of liberty. We witnessed this in Canada where Trudeau announced unilateral emergency powers against the trucker protests, giving himself totalitarian levels of control. Even the Russian government has intervened in such public actions to prevent any kind of activist momentum. Biden will try to do the same thing, and war, even a smaller regional war, gives him a rationale to oppress dissent in the name of public security.
Interestingly, martial law in the US is also much easier to legally and historically justify for the government as long as it is done in response to the invasion of a foreign enemy. The Russian influence narrative may very well be in preparation for martial law within America. Whether or not this actually succeeds is another matter.
The consequences of a shooting event in Ukraine will be far reaching well beyond a distraction for the American public; my intent here is not to suggest only Americans will be affected. My point is that there are certain places in the world that are naturally resistant to the globalist scheme, and freedom minded Americans are a primary obstacle. If there is a large scale rebellion against the Great Reset, it’s going to start here. The globalists know this as well, which is why the US will undoubtedly be centrally involved in the Ukraine quagmire.
While the event would be disastrous for Ukrainians and probably many Russians, there are deeper and more dangerous underlying threats intended for the US and a war in Ukraine acts as an effective scapegoat for many of them.
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Short-selling on stocks was banned, however, and foreign investors will not be able to sell stocks or OFZ ruble bonds until April 1.
The MOEX Russia Index finished trading up 4.37%, having pared earlier gains of more than 10%.
Oil giants Rosneft and Lukoil jumped 16.97% and 12.41%, respectively, while aluminum company Rusal climbed 15.81%. Norilsk Nickel gained 10.17%.
At the other end of the index, Shares of Russian airline Aeroflot initially plunged more than 20%, but retraced some of its losses to close 16.44% lower.
The country’s stock exchange had been closed since Feb. 25 as Russian assets plunged across the board following the country’s invasion of Ukraine and in anticipation of the punishing international sanctions that followed.
Jeroen Blokland, founder and head of research at Dutch investment firm True Insights, said in a tweet Thursday that investors were going back into Russian stocks “perhaps based on the idea that valuations will revert to pre-war levels.”
“But this is unlikely to happen. It’s very difficult to assign fundamentals, but what we do know is that (self) sanctions will remain for a very long time,” Blokland added.
The Institute of International Finance on Wednesday projected that the Russian economy will contract by 15% in 2022 due to the war in Ukraine, in particular noting the “self-sanctioning” of foreign companies as a contributing factor.
The IIF said domestic demand in Russia will fall sharply, with a “collapse in imports” offsetting a decline in exports.
“Together with a decline of 3% in 2023, this will wipe out fifteen years of economic growth. However, the impact on medium- and long-term prospects is likely to be even more severe,” the D.C.-based international industry body said.
The report added that a “brain drain” and low investment will “weigh heavily” on already-subdued potential growth.
The following is a statement from the 45th President of the United States, Donald J. Trump.
In the following statement, the 45th President of the United States says he is withdrawing his support of Congressman Mo Brooks of Alabama because Mo refuses to keep talking about the election fraud of 2020, and wants to move on towards winning in 2022.
You can read the full statement below:
Mo Brooks of Alabama made a horrible mistake recently when he went “woke” and stated, referring to the 2020 Presidential Election Scam, “Put that behind you, put that behind you,” despite the fact that the Election was rife with fraud and irregularities. If we forget, the Radical Left Democrats will continue to Cheat and Steal Elections. Just look at what is happening in Wisconsin, Arizona, Pennsylvania, Georgia, and elsewhere, but tremendous progress has been made that will help us in 2022 and 2024. The 2020 Election was rigged, and we can’t let them get away with it.
When I endorsed Mo Brooks, he took a 44-point lead and was unstoppable. He then hired a new campaign staff who “brilliantly” convinced him to “stop talking about the 2020 Election.” He listened to them. Then, according to the polls, Mo’s 44-point lead totally evaporated all based on his “2020” statement made at our massive rally in Cullman, Alabama. When I heard his statement, I said, “Mo, you just blew the Election, and there’s nothing you can do about it.” Very sad but, since he decided to go in another direction, so have I, and I am hereby withdrawing my Endorsement of Mo Brooks for the Senate. I don’t think the great people of Alabama will disagree with me. Election Fraud must be captured and stopped, or we won’t have a Country anymore. I will be making a new Endorsement in the near future!
“[N]ow is the time for the Administration to sunset federal transportation travel restrictions — including the international pre-departure testing requirement and the federal mask mandate,” the letter declared, “that are no longer aligned with the realities of the current epidemiological environment.”
Also noted in the letter were the outspoken air travel employees that helped lead the call for an end to COVID restrictions — vexed by the enforcement of COVID restrictions.
“In the spirit of bringing normalcy back to our front lines as aviation’s first responders, we ask that you consider lifting the federal mask mandate for airline travel and will move expeditiously to restore choice to aviation professionals and the flying public.”
It’s really astonishing how this White House won’t comment on Hunter’s laptop because he’s “a private citizen,” but they didn’t hesitate for a SECOND to demonize private citizens like Joe Rogan for saying things they didn’t like. Hunter’s laptop is the COVER UP of the century!!
MOSCOW – The Russian Defense Ministry has claimed that the United States has been carrying out experimentation on bat coronavirus samples in U.S. established and U.S. funded bio-labs in Ukraine and that it was first revealed during Russia’s ‘special operation’ in Ukraine. According to Turkish news, China has ‘demanded answers’ from the United States regarding the ’26 bio-labs in Ukraine’.
Russian state news RIA Novosti reported, “The Russian Defense Ministry said U.S.-established and funded bio-labs in Ukraine have been experimenting with bat coronavirus samples, documents show” and a press release by the Russian Ministry of Defense stated “On behalf of the Pentagon, Ukrainian scientists were studying mechanisms for the covert spread of deadly pathogens”.
Washington says that it is not engaged in the development of biological or chemical weapons. Government officials have stated, however that a Russian invasion of Ukraine risks the release of ‘dangerous pathogens’ from bio weapons facilities in Ukraine. Washington claims that these 26 facilities are ‘public and animal health labs’ which is quoted by the the Bulletin of Atomic Scientists.
The Bulletin of Atomic Scientists stated that they are ‘peaceful scientific research and disease surveillance’ programs, and not a covert bio weapons operation. Many have asked however, that if they were such programs, then why are they being funded by the Pentagon and not the Department of Health? They allude that this means they were used for military purposes, and not domestic purposes as reported by officials. We don’t know the answer to this and we will not be getting into speculation, but if we find out why we will certainly be reporting on it.
White House Press Secretary Jen Psaki has called the allegations ‘preposterous’ and said “We took note of Russia’s false claims about alleged U.S. biological weapons labs and chemical weapons development in Ukraine. We’ve also seen Chinese officials echo these conspiracy theories”.
“This is preposterous” she stated. “It’s the kind of disinformation operation we’ve seen repeatedly from the Russians over the years in Ukraine and in other countries, which have been debunked, and an example of the types of false pretexts we have been warning the Russians would invent”.
“The United States is in full compliance with its obligations under the Chemical Weapons Convention and the Biological Weapons Convention and does not develop or possess such weapons anywhere,” she claimed. “It’s Russia that has a long and well-documented track record of using chemical weapons, including in attempted assassinations and poisoning of Putin’s political enemies like Alexey Navalny”.
“It’s Russia that continues to support the Assad regime in Syria, which has repeatedly used chemical weapons. It’s Russia that has long maintained a biological weapons program in violation of international law. Also, Russia has a track record of accusing the West of the very violations that Russia itself is perpetrating”.
“In December, Russia falsely accused the U.S. of deploying contractors with chemical weapons in Ukraine. This is all an obvious ploy by Russia to try to try to justify its further premeditated, unprovoked, and unjustified attack on Ukraine”.
“Now that Russia has made these false claims, and China has seemingly endorsed this propaganda, we should all be on the lookout for Russia to possibly use chemical or biological weapons in Ukraine, or to create a false flag operation using them. It’s a clear pattern” Psaki stated.
Turkish news aa.com.tr however, has reported that China is demanding answers from the United States for the ’26 bio-labs in Ukraine’ and said that military ‘bio-labs’ must carry ‘all dangerous viruses in Ukraine’.
The Turkish news site says that China has asked Washington Tuesday to release ‘relevant details as soon as possible’ regarding the alleged US biological laboratories in Ukraine.
Foreign Ministry spokesman Zhao Lijian stated “According to the data released by the US itself, the US has 26 biological laboratories and other related facilities in Ukraine which has indeed attracted great attention”.
Zhao stated “All dangerous viruses in Ukraine must be stored in these laboratories. All research activities are led by the US. No information is allowed to be disclosed without the permission of the US side” and claimed that the Pentagon has “has absolute control” over the alleged bio-labs in Ukraine”.
“Under the current situation, we call on all parties concerned to ensure the safety of these laboratories, starting from the health and safety of people in Ukraine and surrounding areas and around the world” Zhao stated.
“In particular, the US, as the party that knows these laboratories best, should announce the relevant details as soon as possible, including which viruses have been stored and which research has been carried out. The revelation of the US bio-military activity in Ukraine is just the tip of the iceberg”.
“The US Department of Defense controls 336 biological laboratories in 30 countries around the world under the names of ‘cooperating to reduce biosecurity risks and strengthening global public health” Zhao added.
Hua Chunying, a Chinese government official posted screenshots of the U.S. embassy website claiming that the embassy deleted ‘all documents about 11 Pentagon-funded biolabs in Ukraine’. The screenshot they show to prove ‘the site cannot be reached’ shows a partial URL to a folder and document structure called countries/ukraine/895/dtro-dnipropetrovsk-rdvl_eng.pdf. We think that it’s important to note that these screenshots could either be real, or they could be faked. We haven’t yet seen evidence to verify the validity of the screenshots in question, but we will be looking into it further.
Again, we will not be getting into speculation. There are already too many people jumping to quick conclusions without enough data to verify that claims made about this situation are correct. We will however, try our best to report all sides of the story so that people have a solid overview of about claims being made, and why. We will continue to look into this and report more if we find out more.
The China social credit system is a broad regulatory framework intended to report on the ‘trustworthiness’ of individuals, corporations, and governmental entities across China. In this introduction, we explain what the China social credit system is, how it differs from financial credit ratings elsewhere, and how it impacts on individuals and companies operating within China.
1. The goal of the China social credit system is to provide a holistic assessment of an individual’s, or a company’s, trustworthiness.
2. The China social credit system, while still in development, is arguably an extension of existing social rankings and ratings in China which have existed for millennia.
3. The consequences of a poor social credit score could be serious. It may affect travel prospects, employment, access to finance, and the ability to enter into contracts. On the other hand, a positive credit score could make a range of business transactions much easier.
4. It is essential that any foreign business consolidating or establishing their presence in China seek professional advice for managing a social credit score. This applies both to individual scores, and the corporate social credit score.
2022 marks a new phase in the development and implementation of China’s social credit system (sometimes known as ‘SoCS’, or the ‘SCS’). Up until now, development has been guided by a national policy document known as the ‘Planning Outline for the Construction of a Social Credit System (2014-2020)’.
The implementation of the system for corporations, known as the ‘corporate social credit rating’ is especially advanced: More than 33 million businesses in China have already been given a score under some version of the corporate social credit system.
As of August 2021, it is China’s latest five-year plan for the ‘rule of law’ within China, recent guidance from the State Council, and a draft Social Credit Law, which demonstrate the direction of the social credit system.
So, what is the China social credit system? If commentary in the western media is anything to go by, it is a somewhat mysterious and scary rating system.
Is there any truth to such rhetoric, and what does all this mean for businesses expanding into China?
In this article, we break down the China social credit system, as it has been developed to date, and aim to separate the myth from reality.
What is the China Social Credit System?
The term ‘social credit’ (社会信用体 in Chinese and shèhuì xìnyòng tǐxì in pinyin) doesn’t have a precise meaning — rather, it is an intentionally broad and vague term allowing for maximal policy flexibility.
Plugged into a regulatory framework, the ‘China social credit system’ (also knows as ‘China’s Ranking System’) refers to a diverse network of initiatives aimed at enhancing the amount of ‘trust’ within Chinese society.
The goal of the social credit system is to make it easier for people and businesses to make fully-informed business decisions. A high social credit score will be an indicator that a party can be trusted in a business context.
The system began with a focus on financial creditworthiness, similar to credit scores used in western countries, and moved on to include compliance and legal violations.
The eventual ‘end-state’ of the system is a unified record for people, businesses, and the government, which can bemonitored in real-time.
In more recent years, policy development for the social credit system has moved beyond considerations of financial creditworthiness and compliance to encompass a broader notion of ‘trust’.
A common theme in the policy documents establishing the social credit system is the term ‘Chengxin‘, variously translated as ‘trustworthiness’, ‘honesty’, ‘integrity’, ‘sincerity’ or ‘morality’, depending on the context.
More specifically, through facilitating trust, the China social credit system supports the following goals¹:
Financial creditworthiness (zhengxin 徵信)
As in most countries, firms and individuals need a way of assessing whether others are a safe bet for lending/extending goods on credit. The social credit system aims to rectify this gap in China’s financial and business ecosystem.
Judicial enforcement (gongsi gongxin 司法公信)
Enforcement of judicial decisions (such as judgement debts) has proven particularly difficult in China. Part of the purpose of the social credit system is to find new enforcement mechanisms for existing laws and court decisions.
This means improving compliance and anti-fraud mechanisms for commercial enterprises, and those who participate in them.
Societal trustworthiness (shehui chengxin 社会诚信)
This covers the broader goal in the social credit system of supporting a more ‘moral’ society. We see this goal at work in social credit initiatives which value honesty, hard work and devotion to family.
Government integrity (zhengwu chengxin 政务诚信)
The social credit system is ‘self-reflective’: bureaucrats and politicians themselves will be subject to the regime, with the goal of reducing corruption.
The high-level goals are to be achieved via three key practical mechanisms:
Data gathering and sharing
The fundamental building block of the social credit system is data. Through the system, data is gathered by central, regional and municipal government bodies, as well as private actors, and shared. ‘Big data’ algorithms are then used to process that data in a meaningful manner.
Curation of blacklists and redlists
The data acquired is used to add individuals and corporations to lists (some public, some not).
Punishments, sanctions and rewards
Based partially (but not entirely) on presence in the lists identified above, individuals are punished and rewarded.
The elements of the social credit system outlined above are put into place by a variety of actors:
The social credit system is, at the highest level, driven by the State Council, currently chaired by Premier Li Keqiang. This is the most powerful administrative body within the Chinese government. It is assisted in this task by the National Development and Reform Commission(NDRC). This is a macroeconomic policy body, immediately subordinate to the State Council, and has a mixture of what would in other countries be called Treasury and Reserve/Central Bank Powers. The People’s Bank of China (PBoC) also plays a prominent role at the highest policy level.
Central government and court implementation
Dozens of central government departments and agencies have implemented elements of the social credit system, especially the blacklists and redlists. Prominent examples include the Ministry of Transport, Ministry of Culture and Tourism and the PBoC.
The Supreme People’s Court has also introduced an expansive blacklist of debtors under the scheme.
Regional and municipal government implementation
It is through regional pilots that the social credit system has largely been implemented, including the ‘model cities’ initiative introduced in 2017 (see timeline below).
Private company credit ratings and contracting
Several private companies have developed their own credit systems (such as Alibaba’s affiliated ‘Sesame Credit’), with participation being voluntary. Some of these have been developed independently, while others have been developed as part of government trials.
In other cases, private companies have been contracted to provide the infrastructure supporting the credit system such as Baidu’s refresh of the ‘Credit China’ webportal, and Tencent’s development support for the app.
Historical Background to the China Social Credit System
While the introduction of a unified China social credit system was formally announced in 2014, precursors to the proposed social credit system have operated within China for centuries — arguably millennia. The idea, or philosophy, behind social credit, might be traced back to the ‘warring states’ period of Chinese history. At that time, various schools of thought competed for dominance:
Confucius (551–479 BCE) advocated a ‘holistic’ conception of human nature where individual well-being was connected to good character, and the proper functioning of society as a whole.
Mozi (470 BC–391 BCE) suggested that all humans should care for each other equally, and advocated a society where all were treated impartially.
This school, (approximately 400-300 BC), emphasized the importance of laws, strictly enforced from above, in order to preserve social order.
Though arguably ‘legalism’ won out, all three of these schools influenced the first imperial ‘Qin’ dynasty (221-206 BC). It is within this dynasty that a meritocratic assessment and promotion system was applied across the imperial bureaucracy in order to achieve a well-functioning Chinese state. Arguably, this was a rudimentary ‘social credit system’, albeit one applied only to civil servants, and without a precise ‘score’.
In the 20th century, public record systems have been developed to record the behavior and actions of ordinary individuals. For example, the hukou system, in place in its modern incarnation since 1958, registers households, controls internal movement within China, and assigns benefits to households depending on their rural or urban location.
The dàng’àn is a set of records related to an individual within China, recording that individual’s “performance and attitudes”. This file contains a range of information such as physical characteristics, photographs, employment records, academic records, workplace appraisals, convictions and administrative penalties. This file follows an individual for life, and two copies are held: One is kept by the Public Security Bureau and the other by the individual’s work unit.
This file has been used (and still is) for a range of decisions affecting an individual, such as promotions and access to passports.
A key proposed benefit of the new unified social credit system is that, instead of relying on a paper record to manage society, the electronically-integrated system would expedite the analysis process and make oversight easier.
Timeline of the Development of the China Social Credit System
In 1978-1979, the reforms of Deng Xiaoping opened up the Chinese economy in various key ways, including the “Open Door” policy that permitted foreign investment in Chinaonce more. From that point on the lack of traditional credit rating systems, as well as significant corruption scandals, have been seen as a limitation on economic prosperity.
By contrast, developed western economies like the United States already had computerized credit analysis by the 1960s (though scoring systems, such as the FICO, did not rise to prominence until the late 1980s).
We set out the development timeline for the social credit system below:
Mid-1990s — First credit databases constructed
The PBoC developed an early database providing financial credit information to commercial banks.
This was formalized in the ‘Banking Credit Registration and Reference System’ (sometimes translated as ‘Bank Credit Registry and Consulting System’), established in 1997.
1999 — The idea surfaces
Then Premier Zhu Rongji assigned a research team at the Institute of World Economics and Politics of the Chinese Academy of Sciences to investigate solutions to corrupt market behaviour. In response, The National Credit ManagementSystem² is released, advocating a centralized system, bringing together data from across China.
The focus of the system at this stage was economic: Debt default, contractual breach, and regulatory non-compliance were to be the key data for the system.
From this point on, embryonic pilot testing of the system began. For example, in 2000, Shanghai introduced a credit system which assessed eligibility for loans by individuals based on payment of utility bills.³
2004 — Official endorsement from the leadership
Then President Jiang Zemin endorsed the social credit system at the 16th CPC party congress in his report ‘Build a Well-off Society in an All-Round Way and Create a New Situation in Building Socialism with Chinese Characteristics’.
The stated goal was to establish a social credit system compatible with a modern market system.
In addition, trials on a consumer credit reporting database began with 23 state-owned and commercial banks across seven municipalities.
2006 — Credit Reference Centre established
The Credit Reference Centre is created to be a nation-wide, independent, credit reporting agency.
Banks were required to start reporting on customer creditworthiness. Through collaboration with government departments and the Supreme People’s Court, additional information relevant for creditworthiness began to be reported.
2007 — Co-ordinated national policy development
The Joint Inter-ministerial Conference on Social Credit System Construction (the ‘joint conference’) was set up to co-ordinate the development of the system.
Participants include key government departments and agencies such as the Ministry of Finance, the State Administration for Industry and Commerce, and the Ministry of Public Security.
But members were also included from the Central Commission for Discipline Inspection (the chief anti-corruption body in China), the Central Guidance Commission on Building Spiritual Civilization (the chief ideological body in China, aimed at a “socialist harmonious society”), and the Supreme People’s Court.
This wide membership beyond traditional government departments is perhaps indicative of the all-encompassing nature of the planned social credit system (and the move from a focus on financial creditworthiness, to broader conceptions of ‘trust’).
2009 — Regional pilots of the social credit system commence
One of the most well-cited cases was the system introduced in Suining county, Jiangsu province. Individuals were given 1000 points, with the ability to gain or lose points based on their behaviour. Convictions or debt non-repayment, for example, meant point deductions.
These points were then used to create a letter grade from A to D. And the result of those letter grades affected employment opportunities, access to business licenses, and eligibility for government support.⁴
A more recent example is the the ‘Social Credit Card’, introduced in Nanjing in 2016. This offers select benefits to individuals with a high social credit score, including discounts and preferential treatment by financial institutions. Assessment criteria include such considerations as the individual’s willingness to donate blood, and whether the individual is recognized as a hard worker.
2013 — Supreme People’s Court debtor blacklist established
This list publishes the names and ID numbers of defaulters.
As well as the ‘shame’ associated with being on the list, defaulters were prevented from a range of ‘high-end’ expenditure, including travelling and staying in certain hotels.
Notably, it applies to both individuals and the legal representatives and officers of companies in default.
2014 — Release of key planning and co-ordination document
The State Council released ‘Planning Outline for the Construction of a Social Credit System (2014-2020)’ in 2014.
This document is a culmination of the work of the joint conference, and has guided the social credit system in its development over the past six years.
Five objectives for the system listed in that document included establishing necessary laws and regulations for social credit, the completion of a credit investigation and sharing system for all of China, developing credit supervision systems, a market for credit services, and establishing mechanisms for keeping trust and punishing those who fail to do so.
A significant emphasis with this last objective was the development of blacklists and redlists (these are discussed in detail below).
2015 — National Credit Information Sharing Platform (NCISP) and private provider trial
The NCISP is overseen by the NDRC in conjunction with dozens of other government departments. It integrates all the regulatory data used to construct blacklists and redlists.
It is this database that the Unified Social Credit Code uses to pick out a particular corporate actor.
Also in 2015, the PBoC authorized a trial for 8 companies to test numerical credit score systems, based on repayment, purchase history and personal characteristics. The most well known was Alibaba-affiliated ‘Sesame Credit’. These licences were not renewed and instead the 8 companies received a stake in a unified credit platform named Baihang, with a significant stake controlled by the PBoC.⁵
2016 — Progression on blacklists and redlists
2016 saw the the State Council emphasize the standardization of blacklists and redlists (see ‘Guiding Opinions on Establishing and Improving the Joint Incentive System for Trustworthiness and Joint Disciplinary System for Untrustworthiness’);
From this point, blacklists and redlists became ubiquitous across government departments, with more than 50 in operation.
2017-2018 — Model city trials
Widespread adoption of regional trials of the social credit system, with 12 such cities in 2017 being classified as ‘model cities’. Perhaps the most prominent example city is Rongchen. The city introduced a comprehensive grading and reward and punishment system. The platform involves collaboration between 142 government departments. Hundreds of positive and negative factors go into the final score, with positive scoring individuals having priority access for finance and licences.
In Suzhuo, a collaboration between the city government and Ant Financial with the ‘Osmanthus‘ score was applied 13 million residents. High scores meant (among other things), public transport and library benefits.⁶
2019 — Towards AI
The State Council released ‘Guiding Opinions on Accelerating the Construction of a Social Credit System and Building a New Credit-based Supervisory Mechanism’. This emphasized the need for big data and artificial intelligence to provide early warning of risky actors in need of extra regulatory attention. It also recognized the need to focus on market regulation.
At the same time, the document called for improved credit repair mechanisms, enhanced data collection and privacy protections.
2020 — Covid-19 implications and further standardization
In December 2020, a draft of the Social Credit Law was released for internal consultation. There is speculation that the eventual law may look like existing provincial social credit regulations that have been implemented, such as Shanghai’s.
Covid-19 also saw the China social credit system altered in various ways to recognize the impact of the pandemic. This is discussed in detail below.
How Does the China Social Credit Work?
The China social credit system rates individuals based on the aggregation and analysis of data. In some trials, this has involved a single numerical score (usually between 1 and 1000, like a FICO score), or a letter grade (usually from A-D).
This information is acquired from a range of sources including individual businesses (including ‘big tech’) and government entities. Some of the information is ‘siloed’, and accessible only by the individual regional or central government authority. But in many cases the information is shared with other regulators through a centralized database, such as NCISP.
For example, some of the factors that can be considered in giving a corporate social credit rating include:
Whether the business has paid taxes on time
Whether the business maintains necessary licenses
Whether the business fulfills environmental-protection requirements
Whether the business meets product quality standards
Whether the business meets requirements specific to their industry.
It is important to note is that businesses’ scores may decrease based on the behavior of their partners. This means enterprises need to think very carefully about who they do business with in China.
As the China social credit system is still in a state of evolution, it is impossible to say with certainty what exactly the negative consequences are. That said, based on those elements that are currently in place, as well as existing regional pilots, potential negative effects of a bad score once fully implemented include:
Reports in 2019 indicated that 23 million people have been blacklisted from travelling by plane or train due to low social credit ratings maintained through China’s National Public Credit Information Center. It is reasonable to assume that this will continue as part of China’s social credit system.
The social credit score may prevent students from attending certain universities or schools if their parents have a poor social credit rating. For example, in 2018 a student was denied entry to University due to their father’s presence on a debtor blacklist.
Reduced employment prospects
Employers will be able to consult blacklists when making their employment decisions. In addition, it is possible that some positions, such as government jobs, will be restricted to individuals who meet a certain social credit rating.
Businesses with poor scores may be subject to more audits or government inspections.
In many cases, regulators have encouraged the ‘naming and shaming’ of individuals presented on blacklists. In addition, flow-on effects may make it difficult for businesses with low scores to build relationships with local partners who can be negatively impacted by their partnership.
In addition, businesses of individuals need to consider the negative effects that the actions of a person or business can create for others due to a poor social credit score.
For example, engaging with companies that have a low social credit score (such as those that are ‘blacklisted’) can reduce one’s own social credit score. In addition, if an individual with a poor social credit rating opens a business, the business mayautomatically begin with a low social credit score.
The majority of megacities and mid-sized cities in China have already implemented a trial-period of the social credit system. There are many ways to lose points and lower one’s social credit score, depending on the city where the offense takes place. Some of the more trivial score-lowering actions include:
Some have questioned whether some of these activities and behaviors are bad enough to merit the penalties that result from a low social credit score.
It should be noted that the court system is available for individual’s or corporations to appeal their score.
The China Social Credit System and the Blacklist
So far we have made several references to the ‘blacklists’ and ‘redlists’ associated with the China social credit system. So what exactly is a blacklist?
China currently has a number of national and regional blacklists based on various types of violations. It is expected that over time, the system of blacklists will be fully integrated with the social credit score.
Businesses can be placed on a blacklist due to a particular violation or because of a poor social credit score. A government notice released in 2016 encourages businesses to consult the blacklist before they hire someone or assign them a contract. A blacklist of people restricted from taking air and rail transport.
Please note that companies will not be blacklisted automatically for compliance failures. The corporate social credit system also maintains an irregularity list. This list deals with significant (but not yet ‘blacklist’ level), non-compliance.
Presence on this list means the business is in danger of being blacklisted and should quickly take steps to improve its reputation.
The Chinese government utilizes the blacklist in multiple ways. The list itself is frequently being analyzed, with the available information on both its citizens and companies listed in their Master Database working as a template for assigning each person a score.
While the China Blacklisting system is still in its early stages, it is already the most prominent system of its kind worldwide. China has already put this system into action, and has barred thousands of Chinese residents’ rights to buy plane tickets and travel either domestically or abroad. However, most of the blacklisting that has occurred to date has been as a result of violations or misbehaviour of companies and the individuals working for them.
In its current iteration, the blacklisting system is highly complex. Instead of having a single blacklist used by the federal government, there are currently hundreds of blacklists being controlled by various state agencies around China. Every agency has their own jurisdiction in which they operate, giving these localized organizations the ability to blacklist individual citizens and companies that operate within their area of authority.
It’s important to note that being blacklisted under one agency’s jurisdiction may leave the affected party subject to blacklisting from the remaining agencies across the country (the level of integration of blacklists differs across the country and between different government departments).
It typically takes 2 to 5 years to be successfully removed from a blacklist, which often has a negative impact on the privileges afforded to those individuals and businesses in society. Early removal from the list is a possibility for some, depending on the severity of the offense and whether the offending party has done enough to rectify the situation in the eyes of the relevant governing body.
In addition to being used as a metric for punishing citizens and companies for violating the country’s guidelines, the social credit system is also intended to be useful in China’s search for signs of potentially harmful behavior before it occurs.
What are the Potential Rewards of a Good Score?
On the other end of the spectrum, there are positives of the social credit system for people and corporations who are determined to be outstanding members of Chinese society. In this context, the opposite being blacklisted is to be ‘redlisted’ (also spelt ‘red-listed’). Redlisting allows citizens and companies access to certain privileges that will impact their day to day lives.
There is a range of rewards to businesses that do well in this regard, including:
Streamlined administrative procedures. For example, companies that are classified as an ‘Advanced Certificate Enterprise’ may receive faster customs clearance. ‘A-rated’ tax-payers may have their tax returns processed more quickly
Fewer inspections and audits
How is Technology Integrated within the Social Credit System?
New innovations in technology are poised to play a large role in the country’s social credit system. Artificial Intelligence (AI) facial recognition software is said to be currently utilized in tandem with over 200 million surveillance cameras in China.
Some argue that the purposes of large-scale surveillance measures is to give Chinese officials the ability to track their citizens in every facet of everyday life: In turn providing masses of data to determine whether an act worthy of being blacklisted has occurred.
Along with these physical surveillance measures, the Chinese government continues to track the online behaviors of its citizens. There are a plethora of violations Chinese officials may be looking for, including evidence of writing and sharing anti-government ideologies.
The AI software is able to do the majority of this work on behalf of the government and alert officials when a violation has occurred. The technology has advanced to a place where the AI can identify videos of anti-government protests and block users from viewing them.
Businesses must be cautious when navigating China’s compliance laws as well, as their internet data may be used against them in the event of a violation. Data that reveals a company’s lack of compliance in regards to contractual obligations are factored into and can play a significant role in determining the company’s social credit score.
It is worth noting that, generally speaking, China’s public security system and social credit system are distinct. Currently, blacklists and redlists are created via the manual inputs of officials and there is not yet any full-scale integration between the state’s security apparatus and the social credit system.
What is the Corporate Social Credit Score?
While the social credit system in China is universal in application, the policy focus to date has been on its application to companies. According to one analysis, 73 percent of policy documents released to date have been focused on the application of social credit in the corporate sector.
The goal of the corporate social credit rating is to combine data from many different sources to provide a public searchable database of companies, and to evaluate and score those companies against a list of compliance criteria.
While the corporate social credit rating is still in a development phase, the goal is to work towards a ‘Comprehensive Public Credit Rating’, which will provide an overall score for companies operating in China.
In the meantime, companies need to use a range of existing databases providing information and evaluations of companies, based on overlapping, yet distinct datasets. The databases can be national, regional, local and based on particular industries.
Businesses are assessed based on compliance, financial and audit records: More than 33 million businesses in China have been assessed to date.
Grades and ratings. Scores are currently in the development phase (these will be similar to the three-digit credit scores you may already be familiar with in other countries). However, there are four basic letter categories used: A= Excellent; B=Good; C=Average; D=Not sufficient;
Redlist/Redlisting. As discussed earlier, this is a mechanism to reward companies that are performing well;
Irregularity list. This lists companies with significant non-compliance. If a company is on this list, the authorities are paying attention to it;
Blacklisting. Blacklisted companies are classified as heavily distrusted. This categorization can result in your business license being revoked;
Unified Social Credit Code. This is your company’s unique business identifier across the different databases.
Below we look at how to check your status using a key national databases, CreditChina.
How to Check the Status or Rating of your Company using CreditChina
CreditChina is a search tool (only available from a Chinese IP Address), providing a range of information on companies and individuals. Information incorporated into its assessments includes:
Basic identifying information for the company, including the company’s Unified Social Credit Code and permits held;
Any applicable administrative penalties;
Any payment defaults recognized by the Courts;
Any instances of tax evasion and fraud;
Instances of illegal importing or exporting;
There are several sub-databases provided, including one relating to redlisted companies, one for blacklisted companies, and one for companies with irregularities.
To proceed with checking your rating or score in CreditChina go to the CreditChina homepage as shown below:
Then, take the following steps:
Click on the ‘Credit’ tab (first item in the list) Search for the company either by name, or by Unified Social Credit Code;Insert the Unified Social Credit Code and hit ‘Search’
The record that you see, will show:
Any administrative permits held by the company;
Any administrative penalties applied to the company;
The presence of the company on redlists;
The presence of the company on blacklists;
The presence of the company on any irregularity list.
If you find ‘negative entries’ (presence on a blacklist or irregularity list), you should seek advice on how to improve your situation. Or, if you think there has been an error, you can make a complaint seeking directly to the authorities seeking a correction of your record.
How to Check the Status or Rating of your Company Using Other Databases
NECIPS is another national database, arguably not as user-friendly as CreditChina. It has the most comprehensive set of information on social credit system records, as it collects data from the most government sources. In addition, NECIPS:
Provides more comprehensive identification data relating to the company;
Allows for reporting on social credit system issues directly to the authorities.
Companies should also check local databases in the areas that they are located, as well as any subject matter-specific databases. These databases include:
The tax database that lists when companies have excellent tax-filing and payment practices;
The environmental regulatory database;
A customs database;
A procurement database.
Why Is the Corporate Social Credit System Important For Your Company?
The corporate social credit system is important for two reasons. First, you need to know who you are doing business with in China. The corporate social credit rating lets you look up potential business partners and collaborators and check their reliability. Second, understanding the corporate social credit system is essential for your own business. In order for other companies and the government to be willing to engage with you, you need to continually demonstrate that you are a compliant entity.
Looking up your corporate credit rating on the available databases is essential in order to check that you are on track. We recommend that you seek professional advice and assistance to ensure that your company can increase its ‘positive’ credit entries and decrease the number of ‘negative’ entries.
What Is the Difference Between Alibaba-Affiliated ‘Sesame Credit’ and the China Social Credit Rating?
The China social credit system is often confused with existing credit ratings provided by private credit providers. It is commonly likened to Sesame (Zhima) Credit, which is operated by Alibaba’s Ant Financial.
Note, Sesame Credit has no connection to ‘Credit Sesame’, a US-based credit and loan company.
Whilst Alibaba was involved in constructing infrastructure mechanisms for the social credit system (Alongside other Chinese ‘big tech’ firms such as Tencent and Baihe), Sesame Credit is an optional platform.It exists for the use of Alibaba group customers. Rewards include streamlined access to loans from Ant Financial, and an enhanced profile for operating on other Alibaba Group sites. It is distinguished also by its use for individuals, as opposed to businesses.
The Sesame Credit model takes into account a range of information including the individual’s payment history and debt, their ability to fulfil contractual obligations and their personal characteristics. In this respect, Sesame Credit works in a similar way to some credit systems in the United States. For example, while the most common form of credit score in the US, the FICO score, does not take into account personal characteristics, lenders often take those factors into account when implementing those scores.
What Can You do to Prepare for the Implementation of the China Social Credit System?
While some valid concerns have been expressed about the trials of the social credit system so far, the potential benefits for foreign companies looking to extend or establish their operations in China cannot be underestimated. If it works as intended, the social credit system will mean:
A leveled playing field against domestic companies. Through publicly accessible databases, foreign companies will be able to know that they are doing business with a reliable partner. This is especially important for enterprises when they first enter the China market. To date, this information was primarily known by local Chinese companies ‘in the know’;
Standardized credit ratings across China. Foreign companies will be able to have confidence that a rating given to a company in Shanghai will be based on the same factors as a credit rating given in Shenzhen.
In preparation for the implementation of the China social credit system, it is imperative that businesses both foreign and domestic understand which information they need to provide to authorities. Once this information is identified, businesses should conduct an internal audit which will allow full compliance with the necessary regulations.
In addition to these measures, businesses should prepare a supply chain audit and confirm that any business partners meet social credit guidelines.
Businesses should also analyze their IT and data security, as the transmission of this data to government bodies will need to be undertaken.
While not mandatory, businesses should assess whether their operations are conducive to the advancement of government policies. This can include measures of corporate social responsibility that align with government priorities and wider policy initiatives.
What Is the Public Perception of the Social Credit System?
As the social credit system is relatively new and unfamiliar to individuals and businesses from other countries, it may seem ‘scary’. However, a significant degreeof reporting in English-language media has been based on linguistic confusions and policy proposals that have not yet been implemented. For example, businesses do not currently get penalized for ‘frivolous spending’, as has been widely reported.
In many respects, a credit score in the United States, for example, can have just as serious consequences for individuals and businesses, as China’s social credit system: For example, access to transport can be seriously curtailed in the US due to a poor credit rating through higher insurance premiums and limited access to car loans.
Although there has been substantial resistance to the social credit system from a global perspective, it appears that most Chinese citizens approve of the system. In addition, those most familiar with the social credit system and how it is being implemented, citizens and businesses in China, are widely supportive of the system.
In one peer-reviewed study, 80% of respondents either somewhat approved or strongly approved of social credit scores. Just 1% of participants reported either strong or some degree of disapproval in the system.
It is important to note that this survey only represents Chinese internet users that participated in the survey and is not necessarily a representation of how the country feels as a whole.
From what has been outlined in the official sources, there is nothing more intrusive than what is commonly done in the West.Forrest Zhang, Professor of Sociology, Singapore Management University
Are There Overseas Equivalents to the Social Credit System?
As noted above, it has been suggested that the social credit system is not so different from forms of citizen evaluation in other countries, such as the United States. Is this true? Below we consider some of the wide-scale ‘trust’ and big data programs in other countries, and consider how they compare with elements of the China social credit system:
One of Australia’s biggest immigrant groups are New Zealanders, who are entitled to live and work in Australia for life under the terms of a ‘special category visa’, usually awarded on arrival. This visa has a ‘good character’ test which has been used to deport those resident in Australia for decades, entirely at the discretion of officials. In a recent case, this was used to detain and deport a 15 year old child. Arguably, this has some similarities with the way the China social credit system can affect freedom of movement based on anti-social behaviour.
Trustbond is a private Australian company which uses social media data to come up with a ‘trust score’. This can in turn can be used to replace traditional cash bond payments for potential renters. This has some some similarities with the way in which trials of the social credit system have used social media data to improve overall scores.
Germany’s expansive credit rating system has a significant impact on individual liberties. The ‘SCHUFA’ score (similar in some ways to the ‘FICO’ score in the United States) is necessary for renting or buying a house in Germany, borrowing, or receiving goods on credit. While the details of the score are kept secret in the interests of commercial secrecy, it has been claimed that being in a low-income area or having low-score neighbours could negatively effect your score.
It is clear that there are analogies here with the way in which the China social credit system can punish perceived ‘anti-social’ behaviours. Some would argue that the German system leaves these scores even more opaque, by allowing these decisions to be made entirely by private companies.
Similarly, some health insurance providers (health insurance is compulsory in Germany), use fitness data through apps to offer reduced insurance premiums. This has similarities with the way in which the China social credit score prioritises, and gives a higher score to, pro-social behaviours.
Its original purpose was to ensure access to welfare programs, but concerns have been raised about its use by law enforcement, as well as illegal access for commercial purposes. This has some similarities with the mass gathering of surveillance data in some trials of the China social credit System.
As is evident from the examples given above, many elements of the China social credit score are already implemented in other countries.
What is distinct about China’s system is its sheer size and breadth, as well as an overall Government strategy and direction around the collection and use of big data.
Progress on the China Social Credit System in 2021
2020 was the original target year for implementation of the China social credit system. However, a range of factors, including the impact of Covid-19, has delayed the full establishment of the system.
Throughout the course of 2020, there were four significant variations to the social credit system in response to the pandemic. Note, these changes were not applied nationally, but regionally and by municipal governments, depending on how they were impacted by the Pandemic. These included:
1. Exemptions from Penalties
Individuals or corporations that could show that breaches of contractual or tax obligations were due to Covid-19, were made exempt from the penalties for doing so.
2. Social Credit Rewards for Entities Contributing to Containment of Covid-19
Companies which could demonstrate a ‘decisive’ contribution to the fight against Covid-19 (such as those donating medical supplies) were eligible for certain rewards. This included inclusion on a ‘green list’ which streamlines administrative issues for that business.
3. Penalties for Companies Exploiting the Pandemic or Breaking Restrictions
Any businesses that could be demonstrated to have exploited the pandemic (such as engaging in price-gouging of essential materials), or the breaching of Quarantine and other Coronavirus restrictions, were penalized.
4. Simplified Loan-Granting Procedures
In certain cases, individuals or entities in industries heavily impacted by Covid-19 had simplified and speedier access to credit.
January 2021 saw the NDRC release a national guiding document for credit information reporting. This is designed to encourage the standardization of credit information reporting between provinces.
In addition, the latest 5-year ‘Plan on Building the Rule of Law in China (2020–2025)‘ sets out a vision for the connection between technology and law, as well as an intention to progress social credit legislation. As of mid-2021, this legislation is still in draft form, being considered by government departments.
In July 2021, two draft documents were released in relation to the social credit system: The National Social Credit Information Basic Catalog and the National Basic List of Punishment Measures for Untrustworthiness.
This includes a list of the information that is to be collected as part of the system, covering information related to:
Judicial decisions and arbitration;
Professional titles and qualifications;
Abnormal business activities;
Being on the list of “seriously untrustworthy subjects”;
Credit commitments and their fulfilment;
Credit evaluation results;
Honesty and trustworthiness;
Credit information from market entities.
Frequently Asked Questions
Does the social credit system apply to foreign companies?
What is the difference between a social credit score and a social credit rating?
Does the social credit system unfairly advantage domestic companies?
Is the China social credit system reminiscent of the Black Mirror episode ‘Nosedive’?
Is the China social credit system fully automated?
What does a person’s social credit score depend on?
Does the US have a social credit score?
Does the China social credit score apply to foreigners?
Does China’s social credit system have anything in common with the economic theory/philosophy called ‘social credit’?
What is the difference between the China social credit system and the China social security system?
How do I build or increase my social credit score?
How do I repair my social credit score?
What is ‘Skynet’ and is it connected to the social credit system?
What is the impact of a tax rating?
The China social credit system aims to be an all-encompassing system for assessing the trustworthiness of individuals, corporations and government actors within China. To date, there is no one, unified, ‘social credit score’ held on each individual assessing their trustworthiness. Rather, there are a range of different ratings held by government departments, and individual municipal and provincial governments. However, there is an increasing level of cohesion across China with social credit ratings due to centralized information platforms. This is especially the case for corporate social credit ratings and the blacklists that relate to those ratings. By working with a local expert like New Horizons Global Partners, you can identify the type of information that you will need to provide to authorities, receive an internal audit to ensure compliance and access due diligence on potential business partners.
¹ For an in depth discussion of the concepts underlying China social credit see Zhang, Chenchen (2020). “Governing (through) trustworthiness: technologies of power and subjectification in China’s social credit system. Critical Asian Studies. See also Blomberg, Marianne von (2020). The Social Credit System and China’s Rule of Law. 10.1007/978-3-658-29653-7_6.
² Yu Jingming, Lin Junyue, Sun Jie (2000). National Credit Management System.Beijing: Social Sciences Academic Press.
³ Innovation Centre Denmark, Shanghai. (2018). ‘Social credit & big data trends IN CHINA’.