Wednesday, October 22, 2014

China Plans Massive Honesty Database

Chinese leaders have apparently deduced that dishonesty and lying are not conducive to a healthy society or economy. Authorities are moving forward with a plan to create a massive database that will enable authorities at all levels and locations to monitor, track down, and punish miscreants in government, companies, and courts of law.

For example, it's hard to produce accurate statistics when everyone lies to the statisticians. To fix this, China's National Bureau of Statistics has published draft regulations designed to punish dishonest companies that report inaccurate information on statistical surveys. Companies that deliberately fabricate false data, make false reports, conceal data or otherwise violate the statistical law will be subject to criminal penalties. The Bureau will publicize the names, addresses and owners of dishonest companies on a web site. The information will be entered in a file that will be available to commercial/industrial authorities, tax bureaus, credit information systems and banks, which will affect their ability to legally register, collect government subsidies and get loans. Dishonest companies will be on the list for one  year  unless they successfully apply for removal by demonstrating good behavior. If they're still bad, they will stay on the list a second year.

The purpose of the new regulation is to improve the quality and credibility of statistics. The Bureau is accepting comments on the draft regulations until November 5, 2014.

The Statistics regulation is a small part of China's broad campaign to create an honest society described in the State Council's Plan for Constructing a Social Credit System (2014-2020) released in June 2014. The plan aims to create a complete system of records that covers all members of society to establish a culture of honesty. It is much more than a system for recording whether people pay their bills. It aims to maintain files on bad behavior in government, companies, and courts that will be shared nationwide with all government departments. The records will include dishonest government officials, safety violations, fakes, false advertising, frauds, pollution, etc. The universal nature of the database appears to be intended to address the ease of miscreants disappearing and reappearing some place else where authorities don't know about their record of bad behavior elsewhere.

The honesty system seems to be part of the campaign to promote "rule of/by law" ahead of the "fourth plenum." Like other components of the "law" campaign, the honesty system points backward into Chinese traditional culture for inspiration and moral guidance. The plan instructs Chinese people to "carry forward traditional virtues of integrity as an inherent requirement, giving incentives for trustworthiness and constraining dishonesty." Name and shame appears to be the moral mechanism--no deities, Ten Commandments, St. Peter, or Western religious/philosophical approaches to ethics and morality.

According to the plan, the social credit system is necessary to implement the scientific development concept and form a foundation for a harmonious society and a socialist market economy. It's an important measure for governance and for improving the nation's competitiveness.

The social credit system promises to increase honesty in government, business and courts. The system promises to broaden the public's participation in government decision-making, but it also will "increase its policy-making, enforcement and supervision powers, and publicize policies."

For commercial entities, the system is supposed to lubricate business transactions. One emphasis is on recording unsafe production practices by mines, use of unsafe chemicals, fireworks and pollution emissions. Another focus is on recording quality infractions by food, drug, agricultural products, and agricultural input suppliers so that various government departments in different localities can exchange information about miscreants. The social credit system will cut down on financial fraud, running away from debts, insider trading, fraudulent insurance, illegal accumulation of assets, and taking money out of the country illegally.

You can run, but you can't hide from Big Brother with Chinese characteristics.

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