 All right, then it's my great pleasure to introduce Tony to you. She's going to talk about the social credit system, which is kind of feels to me like a Black Mirror episode coming to life. So slightly nervous and really curious what we're going to learn today. So please give a huge warm round of applause and welcome Tony. So good morning, everyone. I'm going to be going into my talk. I'm just going to be presenting the Chinese translation streams for everyone who just doesn't speak English. So we're going to be presenting the Chinese translation streams for everyone who doesn't speak English. Well, so because today's talk is about China, we figured it would be good to have it in Chinese as well. And I'm gonna be talking today about the social credit system in China, where the social credit system that you always hear about in Western media actually doesn't really exist. And most of my talk will actually be talking about what all we don't know, which could fill an entire hour or even more, but I'm just gonna be focusing on some of the most interesting things for me. First of all, a little bit about me. I'm an economist, but I'm not only concerned with money. I'm kind of looking at economics as the study of incentives, which means that what I'm really interested in is how humans respond to different kind of incentives. I don't believe that humans are completely rational, but I do believe that humans do try to maximize what they think is their best interest. Now, some words about me. I studied math, economics and political science in a couple of different cities all around the world. I spent overall 19 months in China. Most recently, I was there in July on a government scholarship, which was really, really interesting because while there, I read all of these Western newspaper articles about the Chinese social credit system. And I went to a pretty good university and I asked them, so what do you think about this system? And most of them basically looked at me blankly and were like, what system? I haven't even heard of this. So that was kind of an interesting experience to me because in the West, it's like this huge all-encompassing system. And in China, most people that aren't directly in touch with it actually don't know anything about this. I'm broadly interested in the impact of technology and society, life and the economy, obviously. And in my free time, I do a lot of data science and machine learning with Python and R. So I thought it was quite interesting to look at the social credit system also from this point of view because you always heard that it's like this big data initiative. And then when coming down to it, what you actually see is that they don't actually use machine learning all that much. They have basically a rule-based catalog where if you do this, you get 50 points. If you do this, you get 50 points. And then they actually have a lot of people that are reporting on other people's behavior. I'm going to be talking about how exactly it looks later on. But I was very, very surprised after reading a lot of the Western newspaper articles that were basically, oh, this is this big dystopia orwellian with big data working. And then you read what's actually happening. And they have huge lists of if you, J-Walk, you get 10 points distracted from you, this kind of thing. If you want to get in touch with me, you can use Twitter, but you can also use different emails, either my professional email or my personal email address that you can both see there. If you have any thoughts on that or are interested in this a little more, I can give you more resources as well because obviously today's talk will only be scratching on the surface. So perceptions of the social credit system. One of the interesting things that I've talked about before was how in the West and in China, the perception is completely different. So in the West, which is from FinancialTimes.com, you see this huge overwhelming guy and he basically puts every Chinese person under a microscope. They're all kind of hunched over and everyone has the score attached to them and they seem pretty sad and like very, very Orwellian concept. Whereas in China, this is actually from a Chinese state media and what it says is, well, we can all live in harmony with this new system and all trust each other and interestingly, Chinese people actually believe that to some degree. They believe that technology will fix all the current problems in society, especially because in China, currently trust is a rare commodity and this new system will lead to more efficiency and trust and a better life. And I have a really, really interesting quote from a Western scholar that really summarizes the Western perspective. What China is doing here is selectively breeding its population to select against the trade of critical independent thinking. This may not be the purpose. Indeed, I doubt it's the primary purpose, but it's nevertheless the effect of giving only obedient people the social ability to have children, not to mention successful children. This basically plays with the idea that if you have a low score currently in the cities that are already testing this system, what happens is your children can't attend good schools. What happens is you cannot take trains. You cannot take planes. You cannot book good hotels. Your life is just very, very inconvenient. And this is by design. This is kind of the plan. The Chinese government, they say it's a little different. The idea is about changing people's conduct by ensuring they are closely associated with it. One of the main things about this system is there isn't very much new data being generated for the system. Instead, what's happening is all the existing data that is already collected about you is basically combined into one big database for each and every person by your ID number. So in China, once you're born, you get an ID number, which is similar to a social security number in the US. We don't really have a similar concept in Germany. And it used to be that your ID number was only necessary for public, like for government stuff, but now you need your ID number for getting a bank account. You need your ID number for buying a cell phone. Even if it's a prepaid cell phone, you still need your ID number. So all your online activity that happens with your cell phone is associated with your ID number, which means you can't really do anything anonymously because it's all going back to your ID number. There's a couple of predecessors, some of them going actually back to the 1990s, that are supposed to be integrated into the new system. One of them or like two of them are blacklists. One of them is a court blacklist. So in China, courts work a little bit differently. They tend to like giving you fines, as they do in other countries, but they also like giving you apologies to do. So one of the things, if you do something, for example, you're a company, your food safety wasn't up to par, you have to pay a fine, but in addition to this fine, you have to write a public apology letter in the newspaper how you're very sorry that this happened and it won't happen again and it was a moral failing on your part and it won't happen again. And if you don't do that, you go on this blacklist. Similarly, if you take out a line of credit and don't pay it back within three months, or don't do any payments for three months, you go on this debtor's blacklist. If you're on this blacklist, again, it's associated with your Shunfeng Zheng, so your ID number. What happens is you cannot take trains, you cannot take planes. Your life basically becomes very, very inconvenient. Your children can't go to good public schools. Your children can't go to private schools. Your children can't go to universities. All of these issues are suddenly coming up. There is also a company database that's called Credit China, which is basically similar to the public debtor's blacklist, but it's basically a credit system, a credit score for companies. And then there's the Credit Reference Center of the People's Bank of China, which is a credit score. It was supposed to be like Shufa or like the US FICO for individuals. But one of the big problems in China is that there are a lot of people that aren't part of the formal economy. A lot of people are migrant workers. They get their money in cash. They do not have bank accounts. They do not have anything... They do not have rent or utilities or anything like this because they live in the country, so they own their own home, which they built themselves so they didn't even finance it. And their home isn't officially theirs because in China you can't actually own property. Instead the government leases it to you. So there were a lot of people that were not covered in this system and I think the last data that I had was that less than 10% of Chinese adult citizens were actually in the system and had any sort of exposure to banks, which is very, very little and that meant that people couldn't get credit because banks would only give credit to people that were in the system or they had some sort of handling on whether they would be paid back. Now the implementation details of the new system are very, very scarce, but the basic idea is that Chinese citizens are divided into trustworthy individuals and what the Chinese call trust breakers. Sometimes you have five different groups, sometimes you have two different groups, but in general there's sort of this cut-off. Above this line it's good and beyond this line it's bad. This is one graphic from the Wall Street Journal that just shows some of the inputs that go into the system and one of the things that we see is that the inputs are crazy, crazy varied. So it is do you pay income taxes? Do you pay your utility bills on time? Do you respect your parents? However they measure that. Do you have a criminal record? Do you pay for public transportation or have you been caught not paying? What about your friends? Do you retweet or use WeChat to distribute sort of information against the party, which they call reliability. In actuality it's not about whether it's factual, it's about whether it's against the party or not. So where do you buy and what do you buy? Apparently if you buy diapers it's better than if you buy video games for your score, because if you buy video games obviously you're not very responsible and if you buy diapers you have a kid you're sort of conforming to the societal idea. And then your score is supposed to go into all these different categories. You're supposed to have better access to social services if your score is good. You're supposed to have better access to internet services. So in theory the idea is that at one point if your score is too bad you're not allowed to use WeChat anymore. You're not allowed to use Alibaba anymore. You can't become a government worker. You cannot take planes and high-speed trains. You cannot get a passport and your insurance premiums will go up. It's supposed to be this really, really big overwhelming system. But in actuality what they say their stated goals are is it's a shorthand for a broad range of efforts to improve market security and public safety by increasing integrity and mutual trust in society. So one idea is to allocate resources more efficiently. Resource allocation in China is a pretty big problem because people grow up with, there's 1.3 billion people so it's always going to be scars. And a lot of stuff is people grow up with this idea that it's just very, very scars. And current distribution strategies which are mostly financially based but also often onesie based don't really seem fair. For example, public transport in China is highly subsidized which means that the price does not reflect true scarcity. So currently the way it works is in theory it's first come, first serve. In practice there's people that are buying up all the tickets for example the high-speed train from Shanghai to Beijing and then selling it at a profit or selling it to certain companies that have good ties to the government. That seems very unfair. The Chinese system is supposed to distribute them more fairly and more efficiently. The other thing is restoring trust in people. Perceived interpersonal trust and trust in institutions is extremely low in China. If you're from Germany you might have heard that there's Chinese gangs basically buying up German milk powder and selling it in China. This is actually happening because in 2008 there was a big scandal with laced milk powder and ever since then anyone who can afford it does not use Chinese milk powder because they don't trust the government or the regulations, the firms enough to buy Chinese milk powder. So they're actually importing this and the big irony is sometimes this milk powder is produced in China, exported to Germany and then exported back to China. The social credit system is then supposed to identify those that deserve the trust and the third point is sort of a re-education of people. The idea is they want to make people in the image that the Communist Party thinks people should be. And one additional way to the punishments and rewards this could work is the feeling of being surveyed because you can't do anything anonymously. You will automatically adapt your behavior because you know someone is watching you all the time. And this is how a lot of the Chinese firewall actually works because most people I know that are sort of more educated. They know ways to circumvent the Chinese firewall but they also know that they're always being watched so they don't do that because they're being watched so they censor themselves. As I've said before, a location of scarce resources so far is mainly through financial or guanxi channels. Guanxi is basically an all-per-meeting network of relationships with a clear status hierarchy. So if I attend a school, everyone who also attended this school will be sort of in my guanxi network and there's this idea that we will have a system where we are all in group and in group we trust each other and we do favors for each other and everyone who's outside of my immediate group I don't trust and I don't do favors for. And in some ways the guanxi system right now is a substitute for formal institutions in China. For example, if you want a passport right now you can of course apply for a passport through regular channels which might take months and months or you can apply for a passport through knowing someone and knowing someone which might take only two days whereas in Germany you have these very regular formal institutions in China they still use guanxi but increasingly especially young people find that guanxi are very unfair because a lot of these are where you went to school which is determined by where you're born who your parents are and all these things. Another thing that's important to understand because the system works through public shaming and in a lot of western society we can't really imagine that like I wouldn't really care if my name was in a newspaper of someone who jaywalked for example it would be oh well that's okay but in China this is actually a very very serious thing so saving face is very very important in China and when I went to school there I actually we had this dormitory and it was all foreigners dormitory where the staff that were responsible for the dormitory felt that foreigners were not behaving in the way they should so their idea was to put the names, the pictures and the offenses of the foreigners in the elevator to shame them publicly so for example if you brought a person of the opposite sex to your room they would put your name, your offense and your room number in the elevator and of course this didn't work because for a lot of western people it was basically like oh well I'm going to try to be there as often as possible because this is like a batch of honor for me and the Chinese people they figured well this is really really shame and I'm losing my face she brought alcohol so this didn't really work at all but this is kind of the mindset that is behind a lot of these initiatives as I've said there's a lot of problems with we don't really know what's going to happen and one of the ways that we can see what might happen is actually to look at pilot systems China has or like ever since the communist party took hold the Chinese government has tried a lot of policy experimentation so whenever they try a new policy they don't roll it out all over but they choose different pilot cities or pilot districts and then they choose oh well this is the district where I'm going to be trying this system and I'm going to be trying another system in another district or city and this is also what they did for the or what they're doing for the social credit system now I have three systems that I looked at intensively for this presentation overall there's about 70 that I know of the Soining system, Soining is a city in China the Rongchang system, another city in China and Seasoned Credit Seasoned Credit is a commercial system from Alibaba I assume everyone knows Alibaba they're basically the Chinese Amazon except they're bigger and have more users and make more money actually and they have their own little system one of the problems with this kind of system that I found when I tried modeling it was that it's a very very complex system and small changes in input actually changed the output significantly so usually when they try this pilot system they basically have a couple of pilots and then they choose the pilot that is best and they roll it out all over but for this kind of thing where you have a lot of complex issues it might not be the best way to do that the Soining system is actually considered the predecessor of all current systems it had a focus on punishment and it was quite interesting at the beginning of the trial period they published a catalogue of scores and consequences here is an example this is basically taken from this catalogue so if you took out bank loans and didn't repay them you got deducted 50 points everyone started with 1,000 points for this system if you didn't pay back your credit cards you also got deducted 50 points if you evaded taxes also 50 points if you sold fake goods 35 points were deducted and actually the system was abolished I think in 2015-2016 because all the Chinese state media and also a lot of internet citizens talked about how it's an Orwellian system and how it's not a good system because it's all very centralised and everything that you do is basically recorded centrally but Cremus writes nonetheless the Soining system already contained the embryonic forms of several elements of subsequent social credit initiatives the notion of dispersional disincentives against rule breaking naming and shaming of wrongdoers and most importantly the expansion of credit mechanism outside of the market economic context also encompassing compliance with administrative regulation and urban management rules so one of the things that is difficult for especially German speakers is that credit in Chinese Xinyou means credit as in loan but also means credit as in trust so the social credit system is one way of trying to conflate those two to the economic credit and the trust credit into one big system but the Soining system basically failed so they adapted the system and are now practising a new kind of system the Rongchang system whenever you read a newspaper article on the social credit system in the west most people went to Rongchang because they just received a couple of awards from the Chinese government for being so advanced social credit thing but it's very difficult to call this one system because there's actually many many intertwined system there is one city level system where city level offences are recorded for example tax evasion and there's a couple of there's a couple of rules if you evade taxes your score goes down 50 but then if you live in one neighbourhood your score might go up for volunteering with the elderly if you live in another neighbourhood your score might go up for for example planting some trees in your garden or backyard so depending on your neighbourhood your score might be different if you work for a taxi cab company for example they also have their own little score system and your score might go up if you get good reviews from your passengers your score might go down if you don't follow traffic rules these kinds of things there are designated score keepers at each level so each district chooses a couple of people who are responsible for passing on the information to the next higher level about who did what there is supposed to be an official appeals procedure whenever you score changes you're supposed to be notified but apparently that's not happening at this point for most people again it's a system of data sharing and one thing that they haven't really disclosed yet is what kind of data is shared are they only sharing the points so if I'm in a district and I plant some trees does the central system get the information person A planted some trees or does the central system get the information person A got five points we don't know at this point and it would mean something very different for how the system could be used but still the end result at this point is that there's one score so you have one central score and there's all these different smaller systems that go into this score but at the end everyone has one central score and currently about 85% of people are between 950 and 1050 so you start off with 1000 and those are basically the normal people and then anyone above 1050 is considered a trust worthy person and anyone below 1050 is considered a trust breaker and as I've said before with the naming and shaming what you can actually see here is a billboard with the best trust worthy families in Rongchong so these are the families that have the highest scores for example CSUM credit is a little different it's the only system that actually uses machine learning and artificial intelligence to determine the outputs in Rongchong for example they have artificial intelligence they have computer vision for the most part and the computer vision cameras they decide they try to recognize you when you jaywalk and then when they recognize you when jaywalking you get a small SMS well we just saw you jaywalking your score is now dropping but how far how the score develops depending on your jaywalking isn't really determined by machine learning or artificial intelligence instead it's determined by rules you know well one time jaywalking deducts five points and this is stated somewhere CSUM credit doesn't work like that instead it uses a secret algorithm and the way I talked to some people that worked for CSUM credit or for Alibaba and the way they described it was they basically clustered their clustered people based on behavior then gave scores to these clusters and then afterwards did basically reverse engineered their own score using machine learning so that whenever something new happens you can move to a different cluster this CSUM credit was actually refused accreditation as a credit score in 2017 so banks are not allowed to use the CSUM credit score for your to use the CSUM credit score to determine whether they give you loans or not because CSUM credit is quite ingenious obviously Alibaba wants to keep you within their platform so if you buy using Alibaba and using Alipay your score goes up if you buy using WeChat Pay which is a competing platform your score goes down this is many of the same rewards mechanism of the official government systems and this is just an illustration of what kind of scores you can have apparently your scores can go between 350 and 850 and in Chinese there's basically five different levels so 385 is trust breaker or missing trust and then 731 is trust is exceedingly high so one way I tried to approach this issue was through agent based modeling social credit system is individual level but what we are really interested in or what I'm really interested in is actually societal level consequences so if everyone gets this score what does that mean for society agent based modeling works quite well for that because it allows us to imbue agents with some sort of rationality with a bounded rationality what does bounded rationality mean usually in economics people assume agents are completely rational so they are profit maximizers they have all the information but in reality agents don't have all the information they have a lot of issues with issues with keeping stuff in their mind so a lot of the time they won't choose the best thing in the world but they choose what they see and bounded rationality allows us to account for this thing it allows us to account for heuristics and these things and what I did is I took the propensity for specific behavior from current state of the art research mostly from behavioral economics for example I looked at tax evasion and I looked at who is likely to evade taxes in a system and then obviously there is some stochastic some chance element but the distribution that I chose is related to the current research and I also checked that my model has similar results to the wrong-trung model which I modeled at the beginning so on average 87% of my users have a score of within 10% of the original score which is also the data that the city actually publishes now for the most part I compared design choices in two axes one of them was a centralized system versus a multilevel system and a rule-based system versus a machine learning system the centralized system is basically you have a central you have all the information is kept and everyone in China or wherever in wrong-trung has the exact same scoring opportunities now if you have a centralized system the clear expectations were were pretty good but at the same time the acceptance from the population was really really low which they found during the swimming experiment also the problem of a single point of failure who decides the central catalog and depending on who sort of has the power it kind of just reproduces power structures so because you have the central catalog people that are in power centrally they are basically deciding some sort of score mechanism that works for them very well so that they and their family will have high scores a multilevel system has the advantage that local adaptation kind of works and there's sort of many points of failure but in my model when I allowed locals to basically set their own rules what happened was that they competed so it started out being this district of wrong-trung for example the district of wrong-trung they compete for the best people that they want to attract and suddenly you have this kind of race to the bottom where people want to move where they wouldn't be prosecuted so they move to places where there's less cameras for example at the same time there's many points of failures especially the way it's currently set up with people reporting data to the next to the next high level and a lot of the time what we have actually seen in wrong-trung was that they reported data on people they didn't like more than data on people they did like or their families got better scores than people they didn't know so it also kind of reproduced these biases the rule-based system has the advantage that people were more prone to adapt their behavior because they actually knew what they needed to do in order to adapt their behavior but the score didn't really correlate with the important characteristics that they actually cared about and as opposed to if in this machine learning system you know how in Germany we don't really know the Schu-Fa algorithm and I for example don't exactly know what I could do in order to improve my Schu-Fa score and this is a similar system in China with the CSUN credit score a lot of people don't really they say well I really want to adapt my behavior to the score to improve my score but when I try doing that my behavior my score actually got worse and you can have different biases that I'm going to be talking about in a little bit and there's also this big problem of incentive mismatch so the decentralized rules-based systems like Rongchang which is the system that I analyzed the most why because I believe this is the system that we're moving towards right now because Rongchang won a lot of awards so the Chinese government the way they usually work is they try pilots then they choose the best couple of systems and then they roll out the system nationwide so I assume that the system that's going to be the system in the end will be similar to the Rongchang system now one problem that I actually saw in my simulation was that you could have this possible race to the bottom there's also this conflict of interest in those that set the rules because a lot of the time the way it works you have your company in your company you in combination with your party leaders actually decide on the rules for the score system but the scores of all your employees actually determines your company's score if you employ a lot of people with high scores you get a better score so you have this incentive to give out high scores and to make sure that everyone gets high scores but at the same time the government has an incentive for scores to be comparable so there's a lot of incentives mismatch the government also has the incentive to keep false negatives down but they actually the way the Chinese system currently works is they emphasize catching trust breakers more than rewarding trust follow or like trustworthy people so false positives for them are less important but false positives erode the trust in the system and they lead to a lot less behavioral adaptation I was actually able to show this using some nudging research that showed that as soon as you introduce an error probability and you can be caught for something that you didn't do your probability of changing your behavior based on this score are actually is actually lower and in Rongchang one of the perverse things that they're doing is you can you can donate money to the party or to party like party affiliated social services and this will give you points which is kind of an indulgence system which is quite interesting especially because a lot of these donation systems work in a way that you can donate 50,000 renminbi and you get 50 points and then you donate another 50,000 renminbi and you get another 50 points so you can basically donate a lot of money and then behave however you want and still get a good score and the trust in other people can actually go down even more in the system because suddenly you only trust them because of their scores and the current system is set up so that you can actually look up scores of everyone that you want to work with and if they don't have a score high enough then suddenly you don't want to work with them the trust in the legal system can also decrease actually why? because the legal system in China is already low and a lot of the things like j-walking they're already illegal in China as they are here but no one cares and suddenly you have this parallel system that punishes you for whatever but why don't you just try to fix the legal system which would be my approach suddenly illegal activity could happen more offline and this is one of those things that is quite interesting in countries that we've seen that have moved towards mobile payments and away from cash you see less robberies but you don't actually see less crime instead you see more new types of crime so you see more credit card fraud you see more phone robberies these kinds of things and this is also where this could move for in the Chinese case one major problem is also that this new system I've talked a little bit about this one but it can introduce a lot of new bias and reproduce the bias even more so for example China is a country of 55 minorities the Han are a big majority they have about 94% population so any computer vision task we've shown that they are really really bad at discriminating between individuals in smaller ethnic groups in the US most computer vision tasks perform worse for African Americans they perform worse for women because all of the training sets are male and white and maybe Asian these tasks are actually performing worse for ethnic minorities for the Uyghurs for example and one way that they could try to abuse the system is to basically just what they're also doing already in Xinjiang is to basically just identify this is the person of the minority I'm just going to go and check him or her more thoroughly this is actually what happens in Xinjiang if you're in Xinjiang and you look like a Turkish person or like from Turkmenistan from Turkish people you are a lot more likely to be questions you're a lot more likely to be stopped and they ask you or require you to download spyware on your phone and this is currently what happens and this new kind of system can actually help you with that I've said that it can reproduce these kind of power structures and now obviously we all know neutral technology doesn't really exist but in the Chinese case in the social credit case they don't even pretend they always say well this is neutral technology and it's all a lot better but actually it's the people currently in power they decide on what gives you what deducts points for you at the problem currently the entire system is set up in a way that it's all goes together with your ID card what if you don't have an ID card that's foreigners for one but it's also people in China that were born during the one child policy and were not registered there's quite a lot of them actually they're not registered anywhere currently they can't do anything because they don't have a score they can't get a phone they can't do anything really part of the push with this social credit system is to go away from cash actually you need to use your phone to pay but for your phone you need your Shenfeng Drunk tough luck for you currently the problem is set up in a way that you can check other people's scores and you can also see what they lose points for so you can actually choose to discriminate against people that are gay for example because they might have lost points for going to a gay bar which you can lose points for another big issue currently is data privacy and security personal data is grossly undervalued in China what do you think how much is your data worth what data I don't have data currently the way it works is if you have someone's ID number which is quite easy to find out you can actually buy access to a lot of personal information for a small fee so you pay about 100 euros and you get all hotel bookings of the last year you get information of these hotels with them you get information of where they stayed you get trained bookings you get access to all of the official databases for this one person and for another 700 renminbi you can actually get live location data so you can get the data of where this person is right now or where his or her phone is right now but if you've ever been to China you know that where the phone is usually the people aren't far and soup China actually did an experiment where a couple of journalists tried buying that because it's actually these kind of services are offered on WeChat pretty publicly and you can just buy them quite easily so one additional thing that I looked at is because one of the things that is quite interesting is you have this idea of credit as twofold. Credit is trust credit but credit is also low in credit and what if credit institutions actually use this unified credit score to determine credit distribution the idea is that it's supposed to lead to reduced information asymmetry obviously so fewer defaults and overall more credit creation new people are supposed to get access to credit and they're supposed to be less shadow banking but what actually happens I'm not going to be talking about how I set up the model but just about my results if you have this kind of score that includes credit information but also includes morally good or measures of being morally good what you have is in the beginning about 30% more agents get access to credit and especially people that previously have not gotten credit access suddenly have credit access but the problem is that this social credit score that correlates all of these different issues it correlates only very very weakly with repayment ability or repayment wishes and thus suddenly you have all of these non-performing loans you have and what we see is sort of like we have non-performing loans banks give out less loans because they have so many non-performing loans and then the non-performing loans are written off and suddenly banks give out more loans but you have this oscillating financial system where you have where you give out a lot of loans a lot of them are non-performing then you give out a lot of loans again and this is very very vulnerable to crisis if you have a real economic crisis during the time where non-performing loans are high then a lot of banks will actually default which is very very dangerous for a financial system as nationed as the Chinese one now what are some possible corrections you could create a score that basically is the same as a Shufa score so that it looks only at credit decisions but suddenly you lose a lot of incentives for the social credit score if the social credit score doesn't matter for credit distribution anymore another issue and this is I think the more likely one blacklist for people that have not repaid a loan in the past so you basically get one freebie and afterwards if you didn't repay a loan in the past then you will not get a loan in the future you will still be part of the social credit system and your social credit score will still be important for all of these after-access issues but it won't be important for access to loans anymore once you've been on this blacklist which is probably something that the Chinese government could go behind but it's also more effort to take care of it then you have to think about well you can't leave them on the blacklist forever so how long do you leave them on the blacklist do they have to pay back the loan and then they get off the blacklist or do they have to pay back the loan and then stay not in default for a year or for five years there are a lot of so small decisions that in my opinion the Chinese government hasn't really thought about up until now because they're basically doing all these pilot studies and all of these regional governments are thinking of all these small things but they're not documenting everything that they're doing so once they want to roll it out by 2020 by the way nationwide once they've rolled it out there's a pretty big chance in my opinion that they have 100 consequences a lot of things that they haven't thought about and that they will then have to look at we also yeah so I believe that some sort of system is likely to come just in terms of how much energy they've expanded into this one and for the Chinese government at this point for the party it would be losing face if they did not include any such system because they've been talking about this for a while basically it would be a kind of decentralized data sharing system and when I ran my simulation by the way I will make public my code I still need some basically I used some proprietary data for my model and I still need the permission to publish this once I publish this one I will also tweet it and we'll put it on github for everyone to play around with if you want to and some of these implementation details that were very important in determining model outcomes were do we have a relative or absolute ranking so far all of the system I looked at had absolute rankings but there is a point to be made for relative rankings do we have one score where basically if you're a Chinese person you get one score or do we have different sub scores in different fields do we have people reporting behavior or do we have automatic behavior recording how do you access other people's scores how much information can you get from other people's scores currently if someone is on a blacklist for example if you have their ID number again you can put it into this blacklist and then they will say oh this person is on this blacklist for not following this judges order and then it says what kind of judges order it was so most likely it will be something like this the idea is that the social credit system isn't only for individuals but also for firms and for NGOs so what kind of roles will firms play in this system I haven't looked at that in detail at this point but it will be very interesting another idea that western people often talk about is do people also rank each other currently that's not part of the system in China but it might be at one point and lastly where does the aggregation happen so I said that a lot of it is actually data sharing in China so what kind of data is shared is the raw data shared person A did something or is the aggregated data shared person A got this score at this point most of the time it is actually the raw data that is shared but that also has these data privacy issues of course that I've talked about perfect now there's ten more minutes thank you for your attention if you have questions, remarks you can ask them now, you can catch me up later you can tweet to me or send me an email whatever you're interested in thank you very much as Tony said we have about ten minutes left for questions if you have a question in the room please go up to one of our five microphones if you're watching the stream please ask your question we'll also try to make sure to get to those let's just go ahead and start with mic one thank you very much for this beautiful talk I was wondering how did the Chinese government companies and most of all the citizens themselves respond to you doing this research or let's put it differently you would have been in the system yourself how would your research affect your social credit score there's actually two different two different responses that I've seen when I talked to the government themselves because I was there in a government scholarship and mentioned that I'm really interested in this they basically said oh well this is just a technical system you don't really need to be concerned with this it's really important it's just a technicality it's just for us to make life more efficient and better for everyone so I assume my score would actually go down from doing this research actually but when I talked to a lot of people at universities they were also very they were very interested in my research and a lot of them mentioned that they didn't even know that the system existed all right before we go to a question from our signal angel a request for all the people leaving the room please do so as quietly as possible so we can continue this Q&A the signal angel please yeah Ginex wants to know is the score actually influenced by association with people with a low score meaning that is there any peer pressure to stay away from people with bad scores your friend's score definitely is influenced by your friend's scores the wrong-trung score so far apparently is not influenced but it is definitely in the cards and it is planned that it will be part of this I think the WeChat which is the main platform it's sort of like WhatsApp except it can do a lot a lot more WeChat is still not connected to the social credit score in wrong-trung once they do that it will most likely also reflect your score let's continue with mic 3 I have a question about your model so I'm wondering what kind of interactions are you modeling or actions like what can the agents actually do you mentioned moving somewhere else and what else okay so the way I set up my model was I set up a multi-level model so I looked at different kinds of levels I started out with basically they can evade taxes they can get low ends and repay low ends they can choose where to live and they can follow traffic rules or not follow traffic rules and because these were sort of four big issues that were mentioned in all of the different systems so I started out with these issues and I looked at what kind of behavior do I see I used some research that some friends of mine actually sent out surveys to people and asked them well, you're now part of the system did your behavior change and how did it change depending on your responses depending on your score and depending on the score system that exists and I basically used that and some other research on nudging and on behavioral adaptation to look at how likely is it that someone would change their behavior based on the score alright, let's do another question from the interwebs it's actually two questions in one, how does this system work for Chinese people living abroad or for non-citizens that do business in China currently the system does not work for non-citizens that do business in China because it works through the Shenfeng Drang you only get a Shenfeng Drang if you're a Chinese citizen or you live in China for 10 or more years so everyone who is not Chinese is currently excluded Chinese people not living in China if they have a Shenfeng Drang are on this system but there's not a lot of information alright, Mike Forb well, we've come a long way to the Fuxilums Urteil can you tell us anything about the dynamic in the time dimension how quickly can I regain credit that was lost do you have any observations there so in the swimming system what they actually did was they had a very very strict period so if you evaded taxes your score would be down for two years and then it would rebalance in the Rangcheng system they did not publish this kind of period so my assumption is that it's going to be more on a case by case basis because I looked at the Chinese data, I looked at the Chinese policy documents and for most of the stuff they didn't say how long it would count for the black lists which is kind of the predecessor that we look at currently the way it works is you stay on there until whatever the reason for the black list has been resolved so you stay on there until you send off this apology that the judge ordered you to and then usually you still need to apply to get off so it doesn't for black lists it does not work that you automatically get off you need to apply you need to show that you've done what they ask you to do and then you can get off this black list and I assume it will be a similar sort of appeals procedure for the system all right let's go to Mike too thank you I just wanted to ask if looking up someone else's data in detail like position etc does affect your own score currently it apparently does not or at least they haven't published that it does it might in the future but most likely it's actually behavior that they want so they want you to look up other people's scores before doing business with them they want you to basically use this to decide who you're going to associate with all right do we have another question from the internet maybe yes I do standby the question is how is this actually implemented for the offline rural population in China quite easily not at all at this point the idea is by 2020 that they will actually have all of this implemented but even for the offline or let's say offline rural population in China is getting smaller and smaller even in rural in rural villages you have about 50-60% of people that are online and most of them are online via smartphone and the smartphone is connected to the Shenfeng drum so it's not very complicated to do that for everyone who's online for everyone who's offline of course this is more problematic but I think the end goal is to not have people offline at all all right let's jump right back to microphone 2 please okay thank you for the very good and frightening talk so far at first I have to correct you in one point in Germany we have a similar system because we have this tax ID which is set from birth on and rests 30 years after a person's death yeah so we have a lifelong ID you're right I just I don't know mine so I figured no problem but at least we could establish a similar system if we have a government which would want it the second a question from me you mentioned this Quan Chi Quan Chi is it a kind of a social network? I didn't understand it really yes it is a kind of social network but one that is a lot more based on hierarchies than it is in the West so you have you have people that are above you and people that are below you and the expectation is that while it's a quid pro quo people that are above you in the hierarchy will give you less than you will give to them aha okay okay alright unfortunately we are out of time so please give another huge applause for Tony