Old Version

Out for blood

Health authorities are including blood donations as a social credit system metric, a move that has triggered public concerns about privacy, data security and abuse of power

By NewsChina Updated Mar.1

A notice released by 11 government agencies including the National Health Commission to include voluntary blood donation in the country’s social credit scheme has sparked heated debate and widespread criticism. 

Guo Yanhong, a supervisor of the commission’s Medical Administration Bureau, said at a press conference on November 4, 2019 that blood donation is a positive behavioral metric for the social credit system because it aims to encourage blood donation. She also claimed that choosing not to donate would not affect an individual’s social credit score. 

Her explanation, however, did not alleviate public concern. Some experts argued the policy has gone beyond reasonable boundaries and bled into the moral arena by putting personal privacy at risk. 

Liu Xinhai, deputy director of the Credit Management Committee of the China Mergers & Acquisitions Association, told NewsChina that the policy has good intentions but implementation needs improvement, adding that the social credit system should instead focus on economic behavior. “It is related to the evaluation of morals, but they are two different things,” he said. 

Blurred Lines
Public concerns abounded recently that social credit would become a catchall system for all kinds of minor infractions. On November 18, 2019, the People’s Bank of China (PBoC) and the China Banking and Insurance Regulatory Commission said that unpaid Electric Toll Collection (ETC) fees longer than 30 days would hurt drivers’ credit scores.  

Two days later, the Beijing Municipal Commission of Housing and Urban-rural Development and the PBoC inked a memorandum to add subsidized housing rental violations, such as subleasing, to PBoC personal credit files.  

Dong Ximiao, deputy director of the Chongyang Institute for Financial Studies, Renmin University of China, said that ETC and public housing are reasonable additions to the social credit system because they closely reflect personal credit behaviors. 

Many local governments, he added, are including other infractions such as eating on subways, jaywalking and wearing no shirt in public, to strong social outcry. Dong argued that while it is necessary to expand the scope of social credit, it should be done with caution. 

“Volunteer blood donation and jaywalking do not reflect the true personal credit of the general public and have nothing to do with loan repayments,” he said.  

The document released by 11 government agencies advises local authorities to incentivize blood donation not only with credit system points but also benefits such as free access to public facilities and parks. 

Guo Hongyan addressed public concerns by pointing out that choosing not to donate does not affect credit scores. But Guo claimed that provinces including Shandong, Jiangxi, Zhejiang and Jiangsu have had success in adding blood donation to the credit system. 

Yue Zhigang, chairman of CCX Credit Technology, one of the first eight personal credit institutions in China, told NewsChina that there is a gray area between ideas of credit and integrity. He said in other countries, banks use credit scores to gauge a person’s ability and willingness to repay loans. Blood donation and misdemeanors such as jaywalking are not important metrics for banks, he said. 

Local Differences
Many local governments had included blood donation as a positive behavioral metric for social credit even before the National Health Commission issued the notice. 

Since 2017, Jiangsu Province rewarded people who donated between 20 and 30 times to free public transport, park access and health checkups. In the provincial capital of Nanjing, those who donate more than four liters would receive a “credit card” that comes with benefits such as borrowing from public libraries without a deposit. 

According to Fu Qiang, deputy director of Nanjing Red Cross Blood Center, 2018 saw 95,314 blood donations in the city, up by 7.22 percent year-on-year, with a total volume of 29.3 metric tons, up 8.48 percent.  

The city of Weihai, Shandong Province has also taken measures to incorporate voluntary blood donations into the local personal credit system where residents earn 10 points after each blood donation. To date, nearly 80,000 blood donors in the city are entitled to preferential treatment at hospitals, banks and use of public facilities. 

Cities have incentivized other personal behaviors through their social credit systems. In April 2019, Xi’an, Shaanxi Province, included garbage sorting. City officials said their local social credit system is different from the PBoC system, which since 2006 has tracked information such as personal loans, repayments and fulfillment of contracts. 

Laws and Regulations
In 1932, Chinese economist Zhang Naiqi established the China Social Credit Institute, the first of its kind in the country. After the founding of the People’s Republic of China in 1949, the institute moved to Taiwan. In 1988, the Ministry of Foreign Trade and Economic Cooperation – now part of the Ministry of Commerce – established Fareast Credit in Shanghai in order to facilitate foreign investments in China. In 1999, the Shanghai Credit Information Services Company became the country’s first personal credit institution. In the same year, the PBoC began building China’s personal credit database. 

Liu Xinhai, who worked for the PBoC’s financial institute and credit information center for years, told the reporter that China urgently needed market support mechanisms prior to joining the WTO. During that time, China’s financial sector – particularly credit cards, home mortgages and consumer loans – witnessed explosive growth, prompting the PBoC and the National Development and Reform Commission (NDRC) to develop the social credit system. 

“After a while, the PBoC was in charge of the social credit system because of its close relationship with finance,” he said. “The NDRC eventually realized that the credit management mechanism and information sharing system could be applied to social management in order to improve the business environment. It later established the Credit China website, which many local governments and government agencies have joined.” 

The PBoC credit system not only covers personal credit but also enterprise credit in the financial sector, while the NDRC social credit system focuses on social behavior, politics and the justice system. Liu said the PBoC social credit system adheres to international standards and is relatively mature. 

In recent years, China has sped up development of its credit system. China has a nationwide social credit code that includes 34 million items for newly registered businesses. At least 71 central government departments and provincial governments are covered by the national credit information sharing platform, according to a Xinhua News Agency report. 

Despite rapid growth, China’s social credit system remains without legal supervision and management, which is why China is drafting the Social Credit Law. Experts cautioned that China’s social credit system lacks a complete mechanism to deal with the vast amounts of data. 

Yue Zhigang told the reporter that the government handles the majority of data, concerning industry and commerce, judicial files, taxes and insurance. But there is no mechanism to legally access, use and trade data. 

Xue Hongyan, assistant director of the private Suning Institute of Finance, told NewsChina that the PBoC has been playing a crucial role in the development of China’s social credit system and it remains difficult for private social credit institutions to win the trust of regulators. 

“From the perspective of consumer privacy protection, it is unlikely that the government would grant the maintenance of data to private institutions at a time when privacy protection mechanisms need improvement,” he said.