The Digital Silk Road at the China Institute –Too Much Pollyanna?

By , January 8, 2019

Pollyanna, ever the techno-optimist!

By now, most people have heard of One Belt, One Road (“OBOR”) – the Chinese government’s program to build up the infrastructure in developing countries across Asia, Eastern Europe and Africa. OBOR has largely been seen as a brick-and-mortar type of operation – building railroads, ports, pipelines. But in 2017, President Xi Jinping announced a new initiative within the government’s OBOR – promotion of a digital silk road.

And on Monday night, the China Institute hosted a discussion of that ambitious new program featuring Winston Ma, Managing Director and Chief Investment Officer of China Silkroad Investment Corporation, and moderated by Clay Shirky, a professor at New York University Arthur L. Carter Center of Journalism.  But, while the event was advertised as to be a lively, thought-provoking one that would confront pressing issues such as whether China’s digital silk road will lead to China’s domination of global internet standards and whether China’s technology will actually help emerging economies, Ma and Shirky’s conversation ended up being shallow and, as one audience member stated, blindly “techno-optimistic.”

Camal on the Digital Silk Road

For sure, the event did highlight some of developments that the rest of the world should wake up and take notice of. Going from building physical infrastructure in the developing world to cyber infrastructure unmaksks the Chinese government’s grand ambition to open those markets to its companies and become a  global superpower. And in some ways, as a country that developed simultaneously with the internet, China is uniquely situated to do that.  As Shirky pointed out, China was more of a blank slate to develop, and continuously modernize, its internet infrastructure.  The United States on the other hand, is saddled with the infrastructure of earlier telecommunications. Ma noted that this structural freedom enabled 800 million people to access the internet largely through mobile devices.  In fact, China has by-passed the use of credit cards – moving from a cash-based economy to a mobile payment one. Cash is often not an accepted form of currency, even by street vendors. Instead, the only way to pay in many places is with the swipe of your phone. What happens to those 600 million people without phones – and thus access to this economy – was not addressed.

But Ma further noted that it is this type of technology – and way of thinking – that China is also seeking to export to emerging economies.  The Taobao Villages – where farmers in rural areas can open an online “shop” and sell their produce or local crafts – is a model that could be replicated in other emerging economies. But is this good for the farmers in these other countries – to be dependent on exporting their craft goods to richer individuals?  Is it even good for the Chinese farmers? Instead of demanding that their government do more for them – such as provide quality education, health care, and social benefits that are on par with east coast cities – they must settle for peddling their goods in a virtual mall.  Unfortunately, these questions were not answered.

Surveillance in Xinjiang

Instead, both Shirky and Ma were unshaken in their commitment to the good that the internet and mobile devices can bring to all societies. Even when an audience member asked a pointed question about the use of this technology in surveilling and unlawfully detaining a million Muslims Uighurs in Xinjiang province, Ma evaded answering the question, instead re-focusing on antitrust issues. Shirky fared no better; he neither pressed Ma on the question nor rescued Ma from it by addressing it himself.

Ma was right to note that the global, technology infrastructure is the future and largely that future is still unwritten. That is why – as Shirky noted – it is dangerous for the United States to be backing out of so many global treaties and alliances when, as Ma stated, the world is on the cusp of writing “new norms for a new game.” Not only will the United States’ retreat from the global stage mean that U.S. businesses will be at a disadvantage for decades to come, but China will be the one writing those norms.  And given how easily Ma ignored the question on surveillance and mass detention in Xinjiang and how quickly Shirky acquiesced, the question is, is this a good thing?

A Very Unmerry Christmas from China

By , December 25, 2018

In happier times, Wang Quanzhang, his wife Li Wenzu and their son.

This Christmas night, as many across the Western world celebrate this holiday of peace, Wang Quanzhang, a Chinese human rights lawyer, will be jolted awake from his jail cell, rushed to get dressed, and paraded into a courtroom in Tianjin for a criminal trial whose verdict was likely already determined.

Wang is the final victim of the Chinese government’s nation-wide crackdown on human rights advocates, a crackdown that happened three and a half years ago in July 2015.  While most of the other victims of the crackdown have been dealt with, Wang has been held incommunicado – in violation of Chinese law – for over three years.  Unable to see his lawyers or his wife, news of Wang’s well-being has been limited, with news reports occasionally confirming that he is in fact still alive.

But on Christmas Eve, his wife, Li Wenzu, tweeted that she was just informed that Wang would go on trial on December 26.  Make no mistake, the Chinese government’s choice of the day after Christmas for Wang’s trial was intentional.  And does not bode well for Wang.  Knowing that much of the Western world shuts down between Christmas and New Year’s, the Chinese government has used that time to sentence some of its most famous advocates to harsh – and unjustified – prison sentences.  As RFI has pointed out, Nobel Laureate Liu Xiaobo, who eventually died in a Chinese prison, was sentenced to 11 years on Christmas Day 2009.  And on December 26 of last year, human rights advocate Wu Gan, another victim of the Chinese government’s 2015 crackdown, was given an eight-year sentence.

For Wednesday, expect another severe sentence for Wang Quanzhang who has been charged with the serious crime of subverting state power.  Not only has Wang refused to “confess” in exchange for leniency and agreeably participate in a show trial, the Chinese government has vilified Wang by name in the press, including naming him as a ringleader.  It also has alleged that because of the alleged influence of “foreign forces,” specifically the use of foreign NGO funds, these lawyers, including Wang, are  national security risks.  And don’t expect the passage of time to soften the government’s view of Wang, especially as China’s economy slows down, threatening the current regime’s stability and power.

The crime of subversion of state power – Article 105 of the Chinese Criminal Law – carries some of the most severe penalties short of capital punishment.  Much is determined on the role of the individual in the subversion.  A ringleader must receive a minimum of 10 years; the maximum sentence is whatever the court – or in this case the Chinese government – wants.  For those who actively participated in the subversion but were not ringleaders, the sentence can be anywhere from between three and 10 years; and those who were mere “participants”, the sentence cannot be more than three years and can be as minimal as controlled release or the deprivation of political rights.  For those who incite subversion (as opposed to actively participate in it), ringleaders shall receive no less than five years and all others no more than five years.

Li Wenzu, Wang Quanzhang’s wife, shaves her head in protest of the three and a half year detention of her husband.

The Chinese government has failed to make the indictment public and likely Wang’s wife – who has been protesting her husband’s detention including publicly shaving her head last week – has not seen it either.  So it is unclear under what portion of Article 105 the Chinese government will seek to punish Wang.  But given the fact that it has already claimed that Wang was a “ringleader,” have held him for over three years with limited access to a lawyer, and is setting this trial for the day after Christmas, expect a severe sentence, likely in the double-digits.  But for Wang, his wife and five-year-old son’s sake, and for China’s future, we hope we are very, very wrong.

What’s the T on China’s Social Credit System? – Jeremy Daum Continues – Part 2 of 2

By , November 13, 2018

This is the second of a two-part interview with Jeremy Daum, senior research scholar at Yale Law School’s Paul Tsai China Center, founder and chief editor of China Law Translate and an expert on China’s social credit system. To read Part 1, click here.

Yale Law Senior Researcher & China Law Translate founder, Jeremy Daum

Yesterday, Jeremy Daum, senior research scholar at Yale Law School’s Paul Tsai China Center, and the founder and chief editor of China Law Translate, started to give us the T – the truth – on China’s social credit system.  In yesterday’s interview, we discussed the social credit system’s blacklists and the Western media’s confusion that the social credit system gives a “score” (it doesn’t).  Today, we continue our interview with Jeremy, discussing some of the other aspects of the social credit system – the need to create some kind of credit history for China’s large number of unbanked, the influence – if any – of private credit companies, what the real threats of the system are, and how does social credit interact with the surveillance state in a place like Xinjiang.

Read the transcript below for Part 2 of this two-part interview. Or click the media player below to listen (total time – 25:53).

CL&P:                  The other thing that you mentioned in the beginning about the social credit, the financial credit, the administrative regulatory/blacklist, but also this moral education and I think that’s one of the one that I think a lot of Westerner’s have a hard time getting their head around is this idea of developing a system of trustworthiness and sincerity throughout society. How exactly does the social credit system go about building that?

JD:      There’s a lot of different factors, and again I think the part that’s most confusing is that all of this stuff gets grouped in together under the title of social credit. People think that somehow those blacklists and somehow those financial credit things must be feeding into these other components whereas it’s really very siloed sort of stuff. Even though some of it does involve data centralization. Part of the way they do it is with education, straight out education and publicity. Having programs, teaching people about financial credit, but also about moral trustworthiness. The idea that you need to be as good as your word. They’re putting that in school curriculum for children, they’re putting it in outreach things for retirees. They’re creating majors of credit management in the financial sense in universities and they’re just trying to spread that idea.

A winning Model Family in Shanghai

The other part of it though is just taking, trying to put forward role models. Departments, this is part of the red list side of things, are supposed to pick people who they think are doing their job great. Going the extra mile and being above what the law requires and put those forward. Then they get publicized through the media and the like. This is not too dissimilar. . . I have a picture you can put on your website if you want from near my house that is model families and it has the photo is of three families in my neighborhood who have been chosen as role models –最美家庭. And do they get any benefits from that? They probably got a fruit basket or something, but they’re just being put up there as a model. That maybe seems a little hokey or-

CL&P:                  Yeah, like student of the month.

JD:      Maybe to our cynical background it seems silly and I suspect it does to a lot of people in China too. But I think that’s pretty much the extent.

CL&P:            Let me ask you, that’s an interesting thing you bring up about financial education and including the morality component in financial education. If it’s about paying your debts I don’t think actually in the United States in my interaction with a lot of the clients I work with, there is an embarrassment for some people in not paying back their debt, and there is also a lack of financial sophistication, especially in low- income individuals because the products are so complicated.

China to teach financial literacy

Do you know to what extent, if China is looking to create a society, you have two thirds of your society that are unbanked, so they don’t really know banking products, they don’t know credit products, how they can be taken advantage by it. Is part of the financial education to teach them the bad parts of banking? I know when my clients come in there’s overdraft fees. They’re paying, even with a Bank of America, Wells Fargo credit card or bank account, yeah they’re not going payday lenders, but they basically have the same effect because of overdraft fees on a $20 purchase they’re paying 300% on not having enough money in your account, overdraft fees and stuff like that. Is the financial education component looking to teach people who haven’t been banking about the dangers of some of these products?

JD:      Yes. I don’t think the market here is as complex yet. We’ve seen various attempts to branch out in the peer-to-peer lending situation which is now getting regulated more tightly. In effect yes, I think it’s teaching people the consequences of not being able to pay back your loans, but also how to evaluate a loan and an opportunity and investment as well. The government wants to make money more mobile to make the population more mobile and this is part of its effort to do that.

CL&P:                 Going back to some of the misconceptions about social credit in the Western press, I think you mentioned before the Sesame Credit. Can you talk a little bit more about the private credit market, developing a credit dossier in the private market vis-à-vis the social credit system itself?

JD:      Yes. Sesame Credit, and the reason I’ve written about it at all, is because early on there were some people out there confusing it with China’s social credit system. Even after I’ve written on it and other people have largely cleared that up, people still seem to think it’s a private version of the social credit system and that’s not right either. This isn’t something that’s going to have a public equivalent. What Sesame Credit is, is if we’re looking within those general categories I mentioned earlier of what social credit contains, they’re within that financial portion. And the People’s Bank of China already has a personal credit reporting system.

Alibaba’s Sesame Credit – making credit simple.

And it authorized, in its attempt to reach the great unbanked, it authorized eight companies that were data-rich to develop systems that might eventually become personal credit reporting systems. Among these was Ant Financial affiliated with the Alibaba empire, and there was Tencent, Tencent had one. But the most prominent has been Ant Financial, Sesame Credit. And this does have a score rating and it has a lot of really cute graphics that have an odometer, sort of, green to red. Sesame made a lot of statements early on about how their system was going to tell you if someone was trustworthy. And they talked about how they were going to mobilize their big data to get this going on. I should say right off the back that none of those eight companies that was given permission to develop a functional system received a license ultimately, to create a licensed personal credit report system.

CL&P:                 So basically the Chinese government said, look we want to see where this goes. We’re going to let you guys experiment, see where it goes, and then they saw where it went and they’re not adopting any of this.

JD:      Yes. They created a little incubator to let these try off and they have a lot of natural advantages and data. But, and I think I mentioned earlier with Ant Financial and Sesame Credit they said well the main problem here is your conflict of interests. You’re basing your evaluation of people solely on their use of your products.

CL&P:                 Right.

JD:      The other problem was that it just wasn’t a great indicator. Now, what they’ve done since then is they’ve created an internet lending database. This isn’t bank lending, but this is lending that was happening through the internet and each of those eight companies that wasn’t given a license originally now owns an equal share in this database that is going to be part of – I’m a little shaky on it myself honestly because there’s not a lot out there – but is going to be part of what they try again to create a viable credit score on. We’ll have some other data outside of their own sphere of influence. And these companies will not be sharing data with each other is my understanding. Sorry, they’ll share the 百行 – the credit-

CL&P:                 The credit report . . .?

JD:      Well no-

CL&P:                 The actual report that shows what you owe?

JD:      So they’ll share this common database the government has licensed with the internet data and they’ll all draw on that and then mix that with their own special sauce at home to create their reports. Ant Financial won’t give Tencent it’s commercial data.

CL&P:                 Okay, so you could theoretically have a different “credit score” from Ant Financial as opposed to Tencent-

JD:      And you would.

CL&P:            Or if all you do is use Ant Financial products you would have no credit score with Tencent or . . .

JD:      How those companies choose to create credit products will be up to them-

CL&P:                 Will be up to them.

JD:      And they might create more than one because part of what the government wants to do in this financial sector is allow companies to start creating more products that would be useful to different people. And so what they create will be up to them.

To go back to Sesame Credit and what it is now. So Sesame Credit, because it doesn’t have an official license, while it would very much like to become something like a FICO score, right now it is really not much more than a rewards or loyalty point system.

CL&P:                 Yeah.

JD:      It’s important to say again, it’s a private scheme, not a pilot for a government scheme. It gives you rewards for using Ant Financial and Ali Pay products and those rewards tend to be things like the waiver of deposits at companies that have signed agreements with Ant Financial, there are no penalties because-

CL&P:                 They want you just to do more commerce. They’re just encouraging you to get commerce there.

JD:      This is a rewards program and some people like it.

CL&P:                 It’s like United Airlines, you’re a part of that program, the rewards program, so therefore you’re going to try to do more United Airlines.

JD:      That’s right. When I ask sometimes people on the street or students that I’ve had who are trying to understand social credit, I ask if they have a Sesame Credit. Sometimes people have to check and see if they do and those who have used it have that same sort of zealot mentality of someone who really loves their Discover card. It’s not a thing. Now that might change someday as it grows.

In most places in the U.S., job applications require a credit check. Even for low-wage employment.

CL&P:                 As we were talking about what the Bank of China has which is basically … In the United States you can go to or whatever and you can pull your credit report and it just lists what your debts are, it doesn’t give you the score. It sounds like that’s what Bank of China has. I know in the United States there is a tremendous amount of criticism about our credit reports. And again our credit reports and our credit score, most states in the United States do not outlaw the use of credit report pull to get a job, even if it’s not affiliated with anything related. To get a job at McDonald’s in most states, I think New York City is one of the few cities where they’ve banned the box, but you have to agree to allow them to pull your credit even though you’re just wiping the floors in McDonald’s.

There’s a lot of criticism of credit reports in the United States because it doesn’t allow people . . . it’s only about your debts, it’s only about your credit cards, it’s only about your student loans. It’s not about anything good you’re doing, like that you pay your rent on time. So rent doesn’t appear on your credit report. And then a lot of these cards, like the Rush card which is targeted toward people who are unbanked, if you make payments on that it doesn’t, again, appear on your credit report. Only if you stop making payments does it appear so it’s only negative. Has the Bank of China in looking at credit report and what they’ve created on the national level, have they looked . . . Are they just adopting what the United States has, which is definitely not a perfect system, or are they looking to be more holistic and to help people who generally are unbanked get a good credit report by putting their rental income that they’re current on, something like that.

JD:      I’m not honestly sure how they go about calculating the scores. My colleague Jamie Horsley has spent more time looking at these issues. I’ve seen a few reports that come out of it, but I’m not clear. I would say as a general rule while the US and other international foreign models have undoubtedly inspired a lot of what’s happening with the idea of credit reports and even a credit economy, nothing remains unchanged. It will be the “with Chinese characteristics versions.” I think the goal, of course, is to have people with good credit, but there is also this strain of wanting to punish the people who are dishonest that you hear in all the rhetoric and it wouldn’t surprise me to hear that some of that’s there.

CL&P:                 In concluding, so it seems like the social credit system, I mean it’s a fascinating, fascinating thing what they’re trying to do. I think it’s maybe not all scary. I think there’s a lot that does need to be done helping people get better credit for your economy and stuff. But what do you think is. . . I mean but there is things . . . I mean it is going to a level of knowledge about people that to us as Westerners is really scary. What do you think are the things that people should be . . . that the Chinese government and the Chinese people maybe should be looking at to be a little nervous about?

JD:      Yeah, so there’s a few things. The first is something that’s already happening which is the real name systems. This is a phenomena that I think a lot of governments are dealing with trying to end data islands by connecting all of this data that the government collects. The government-created data in China is known as public social credit information. Public in the sense of government, not private, not market. I think that anonymity in some aspects of your life, not having all of your data linked is important. It’s not just important for political dissonance and dissent, it’s important for people with unpopular opinions and unpopular lifestyles.

The benefits of anonymity on the internet

The homosexual community might not want the data that they use in their personal life being somehow mingled with the other data. Now in theory it’s only the government that has any access to this data and there wouldn’t be much purpose for mixing everything together. I don’t want to imply that there’s a question about your sexuality in there, but if all of your internet access is done through a real name registration system and all the platforms that you log onto have to have a real name registration, then any sites which requires a login is going to have it and that creates quite a decent profile of a person’s personal life as well, if not to mention, purchasing histories, et cetera.

I think anonymity is important for protecting people, not just in terms of privacy, but in terms of freedom from discrimination, freedom from persecution. In this society if you’re a Christian it could be an issue. There are always going to be groups that aren’t popular in a community and you should be able to have access to things that don’t hurt people without having to make it public. The other question is, like you said, there is a sort of tendency of people like you were talking about in the US with the credit stores we have, to want to generalize beyond this and to want to take a rating in one area and extend it to all other areas. Criminal records are another thing in the US where a criminal record, or even a record of an arrest where you were later exonerated, can be something that can really follow you for quite a long time.

CL&P:            I mean even . . . I think even in the world I work you have a blacklist for tenants who have been sued, who are largely low-income in New York City. And regardless of whether they’ve … the action was frivolous brought by the landlord, they’re still on this blacklist. And unless they’re sophisticated enough to demand that they get taken off the blacklist, they’re on it and then they can’t rent another apartment for five years. And granted it’s a blacklist that is created by a corporate . . . like corporations go in and they review and they create it and then they sell it, but it is still very, very damaging.

JD:      And that’s exactly the sort of system that shows the right kind of problem, is that people are always looking for shorthand to rule out. Anyone who’s ever done hiring or admissions knows that you can’t holistically consider every situation so if there is a blackmark of any kind, even if it turns out it’s based on some sort of an unfair rule system or a faulty premise, you’re going to rely on it to some extent.

The other thing that I think with China’s system that’s important to remember is while I’ve said that the administrative regulation part isn’t so much new or bad as social credit because all it’s really doing is enforcing legal obligations, existing laws. Just that something was in an existing law doesn’t mean it’s good. Better enforcement of bad laws is a problem. Generally speaking enforcement of laws is desirable, but if your law is already unfair that can be an issue. And there are laws in China that I disagree with.

There are limits on the freedom of speech that go beyond anything I can tolerate and other areas as well of course. So that becomes a real issue. This enforcement might work. There is still a fear that these joint punishments will eventually extend to things beyond just judgment defaulters. And judgment defaulter’s already a pretty broad category given that any administrative agency is seeking enforcement on its administrative penalty can go to a court to get an enforcement judge. The concern would be that they try to mobilize this massive array of penalties against people for other types of violations. Essentially making a sort of outlaw system where if you failed to follow the rules then the society is no longer protecting you, you’re now on the outside. Now that doesn’t seem to be happening now, but that is the direction that some people fear. But even with what is happening now, with the real name systems, the tendency of people to overgeneralize and the fact that we’re enforcing laws that aren’t great to begin with, it could be really problematic.

CL&P:                 How does social credit interact with some of the privacy issues, some of the surveillance issues that we’re seeing?

JD:      One thing that surprises a lot of people is how much ink is spent in the social credit regulations aimed at corporations and at people on privacy. A lot of it discusses how information has to be protected from outsiders. Like all privacy discussion in China’s criminal law, China’s regulatory laws in general, it always talks about duties of confidentiality, but always assumes this doesn’t sort of apply to the government. Police are supposed to protect confidential information that they come across in investigations. But you don’t get to protect that from the police. This is sort of the same thing in the social credit. There’s actually a lot of discussion about making sure that your personal information isn’t abused, sold to people, or transferred to third parties, but the government has few qualms about gathering it up.

Enough cameras? China’s surveillance state.

It’s worth pointing out here another thing which is a lot of people seem to mingle parts of China’s surveillance apparatus as a whole with social credit. These aren’t necessarily the same systems. Social credit for sure is part of the way of keeping tabs on people in China. It has these administrative permits and administrative punishments in it primarily and also this lending information and financial parts. It’s certainly part of that, but the police also have their own systems that involve the cameras we see on the street. That involve the ability to access computers and networks.

This is part of why when I hear discussion of this being the totalitarian control through social credit, I’m like “China actually has plenty of very blunt, straightforward tools for control.” And you only need to look at Xinjiang to see that. When China has a problem that it wants to deal with it usually has few issues with taking a direct approach to resolving it. Despite appearances, I think China’s actually pretty transparent about what the goals of social credit are and what the goals of surveillance are.

CL&P:                 When you say Xinjiang, look at Xinjiang, is that to exemplify the surveillance state or is there anything going on in there with social credit?

JD:      I don’t think it has much to do with social credit, I think Xinjiang shows you exactly how blunt and direct a tool China can use when it wants to resolve a problem quickly. Here we have large numbers of people being detained. Is there a legal basis? Shaky at best. It’s an end justifies the means situation, where they’ve decided that they’re going to do this. Social credit I think is really about building institutions, and China . . . the point is that China has plenty of tools at its disposal for social control and social management.

CL&P:                 And Xinjiang is the example of that?

JD:      It doesn’t need to create new ones.

CL&P:                 To what degree, I mean in your learning about the social credit system here in China, I mean this is a huge amassing of data in one place and to me it’s not clear that other countries are not going in that direction.  Yes, Facebook has a lot of your data, but what you brought up about the gay community . . . a lot of the stuff if you wanted to find out you can just look at people’s friends, Facebook does all these algorithms, figure out what is your thing. Granted it’s to target advertising. But to what extent do you think other countries, other governments will be looking at country, at least in the amassing of data on their people?

China’s social credit system – too much data to be useful?

JD:      I think it’s less looking about China than recognizing the fact that we simply create more data now than ever before. Everything we do now has records and we do things through automated information tech systems. I think how every society, let alone every country deals with that is really one of the defining issues right now. In the US, we seem primarily . . . we’ve had our share of government surveillance scandals, but primarily we’re letting corporations deal with the data and deciding when to limit corporation’s collection of data. Europe has taken a harder line in the interest of privacy rights against corporations.

In China, it’s no surprise that the government is taking the lead on it over corporations. The government is trying to harvest all of its data. The question is what do you do with the data and that’s a technical question but also a policy question. I’m a layman for data science but it seems to me that you’d actually start gathering all this data, have way more data than would be useful to you and it would be really hard to analyze. But I’m sure for specific purposes you could start to find useful things.

CL&P:                 Going back to China what’s next on the horizon for social credit, what should we be expecting in the next six months –

JD:      In the next six months well –

CL&P:                  To a year.

JD:      We have a plan through 2020 that tells us what’s going to happen and within that there’s specific dates. For people who are interested in what’s going to happen to individuals and individual credit-worthiness which is part of that social credit plan, we’re seeing more and more provincial level governments putting out their plans which have timelines in them of what will be done. Mainly it seems to be focusing on the reputation of people in key professions. Doctors, travel agents, people who really effect a lot of other people’s lives. We’ll see I think regulation in those, and I think what it’ll mainly take the form of is the people who have violations of the rules in that field are going to be banned from working in that field for a period of time. But I think we’ve already seen . . . we’re well into that 2014 through 2020 phase and I think we’re already seeing the shape of things that are coming out.

CL&P:                 All right, well thank you very much, Jeremy, for giving us the T on social credit. We’ll probably be following up with you. Your blog has been great, China Law Translate has been great with a lot of the translations and analysis of social credit so thank you very much for that. Yeah, we’ll be keeping tabs on you through social credit.

JD:      Thanks Elizabeth.

To read Part 1 of this two-part interview series with Jeremy Daum on China’s social credit system, click here.

What’s the T on China’s Social Credit System? – Jeremy Daum Explains – Part 1 of 2

By , November 12, 2018

This is the first of a two-part interview with Jeremy Daum, senior research scholar at Yale Law School’s Paul Tsai China Center, founder and chief editor of China Law Translate and an expert on China’s social credit system. To skip to Part 2 of the interview series, click here.

China’s social credit system and its implications for citizen and corporate data, has largely been described by the Western press as “dystopian” and “Orwellian”; it has been compared to the British television show “Black Mirror” and the Hollywood blockbuster “Minority Report”- stories of technology out of control.  It has been used to show what could come to the West if we are not careful with our technology.

But is that what China’s social credit system really is?  We sat down with Jeremy Daum, senior research scholar at Yale Law School’s Paul Tsai China Center, and the founder and chief editor of China Law Translate.  At China Law Translate, Jeremy

Yale Law Senior Researcher & China Law Translate founder, Jeremy Daum

has translated numerous government directives, policy pieces and local regulations on China’s social credit system, making him an expert on this emerging system.  He has also written a slew of informative articles and has just come out with a podcast that gives a general overview of social credit.  But to get a better understanding of China’s social credit, what it is, is it different from the West and what are the real threats within the system, we now turn to Jeremy.

Read the transcript below for Part I of this two-part interview, where Jeremy gives us the background on social credit, explains that there is no “score” and does a deep dive on the judgment defaulter blacklist.  Or click the media player below to listen (total time – 42:03).

CL&P:     All right. Thank you again Jeremy for taking the time to sit down today to give us the T, the truth on China’s social credit system. I guess let’s start with the beginning.

JD:      Sure.

CL&P:     What exactly is social credit? When did it come about? Can you give us some background on this idea in China now that its this social credit system?

JD:      It’s a big question what it is. I think it refers to a lot of different systems. It’s probably just a working name at this point.  But social credit is a lot of ideas linked by the concept of centralizing data to assess credibility, but it’s taking a lot of different forms. I would say that primarily what people talk about, there’s three big parts of it that we could discuss. The first of those is similar to financial credit evaluations in other countries. It’s about trying to make sure the financial credit extends to more and more people.

President Xi Jinping instituted China’s social credit system.

The other is an administrative regulatory system that involves blacklists that we’ve heard about where various agencies put people on blacklists for violations in their fields. The third major area I think we can talk about, is a moral education component of the government trying to extend the concept of sincerity and trust throughout society. We’ve all heard about the extent of fraud and dishonesty that is rampant in some Chinese markets, and I think they’re trying to address that as well. There are other pieces including government transparency [which] is government social credit. I think those three main areas are a good way to think about it.

CL&P:     Just in terms of background are there currently national laws, local regulations? What is the law that’s bringing this about, the social credit system?

JD:      There’s already quite a bit of authority in effect. Some of it is provisional regulations, but some of it is fully up there. The one that you see cited in media reports a lot is this outline plan – the 2014 through 2020 outline for establishing a social credit system. That, I have a roadmap of that as I call it of my site where I try to just pull out all the action items. Even doing that it comes out as 11 pages of document, just saying all the things it wants to do. But mainly it’s a list by different fields including education, the internet, food safety and what they will do to establish social credit in areas like that. But in addition to that planning outline, a lot of more practical, implementable law has started to come out.

There are blacklists in almost every regulated industry at this point. And rules for how a person gets on those blacklists, how a person gets off those blacklists and how long information remains on them. A few areas have their own local provincial level regulations, which is a high level of authority governing a more comprehensive idea of the social credit system. There’s a lot out there including guiding documents down to very specific implementation rules.

CL&P:     On the national level though, you don’t have an actual law, you have a plan, a policy plan?

JD:      Yes, at this point we have a plan, but there’s also quite a few normative documents. These are things calling from the National Reform and Development Committee.  Calling for the blacklists to be created; calling for each ministry to create its blacklist; calling for the creation of a unified social credit code for both people, natural persons as well as corporations. All of the local rules are usually in response to a national level mandate.

CL&P:     Just to clarify, I think there’s been a lot of perception in the Western media about the social credit system and there being a credit score. You mentioned that one of the aspects is this financial credit that’s similar, but does the social credit system itself institute a credit score? I guess for those in the US who are used to a FICO credit score. How is what’s going on here different or similar or. . .?

JD:      It’s important I think to address score. A lot of places have shown a three digit number based on the US model. Some people –

CL&P:     When you say a lot of places do you mean –

JD:      I mean media, media. A lot of media has reported on that. Wired had an article: a three digit score could control your life or determine your place in society. There are scores involved in this, but let’s back up. Even in that financial component, which I call the credit reporting component of social credit. It actually uses a different uses a different word. It doesn’t use 信用,which is usually credit or trust in Chinese. It uses 征信, which is the same 信 but a slightly different word, and I translate it as “credit reporting.” I do that rather than scoring because it doesn’t necessarily imply giving a score even in that context.

For example, right now the People’s Bank of China does have a personal credit reporting system using that 征信.  But what they put out actually doesn’t give a score. It’s a list of debts and obligations and asset evaluations, but it doesn’t give an ultimate score. It just gives a data sheet that a lender might be interested in seeing. So with credit reporting private companies might base on some of the data that they get start to give scores that would be useful to people, but that would be a credit product they’re offering to people. That’s what we’re talking about the financial situation.  What people are really interested in and what I think is sexy about the idea of social credit is the idea that people are being rated and evaluated in some sort of a holistic way. That actually there is no score. There isn’t even really a holistic evaluation of people in any way.

There are a few local pilots that do give people scores, that do seem to be a sort of “citizenship score.” The idea is this will in some way tell you how good a person this is. It considers a lot of different things like doing charity work and volunteer work. I view those primarily from my main research focus where I’m a criminal procedure researcher and I look to see how state power is used to enforce these lists. What I found is that in all of these point systems, there are no consequences of a “bad score.” There are some minimal rewards for “good scores” – often things like you get your lawn mowed for free or you don’t have to participate in some other mandatory obligation of sorting recycling or something to this effect. There’s some mild benefits. Not dissimilar to what being a model worker or model family used to be in the old days. I would call it more of an educational system. This is part of that educational component trying to convince people sincerity is an important value rather than anything like an enforcement mechanism of any kind.

CL&P:     Okay, so it’s just to promote positive behavior and not necessarily to punish negative behavior. It would just be in this sphere of charity work, doing good work?

JD:      Well some of them are holistic and are trying to … They would include things like if you had a criminal violation, they would count that in, but what they’re doing with that in that context is making the score that doesn’t have any real negative consequences besides maybe shaming. Which might be there. I’ve seen very minimal. One of the most extreme that I’ve heard about is you got a larger share of communal farming profits if you had a high score in one of these systems. These scores are really a very minimal part of what going on and don’t really have teeth.

Shanghai for example is the example I’d like to raise the most where they do have an app that gives a score. Shanghai is a big modern city. But this app is entirely voluntary. There are no consequences attached to it.  But Shanghai is one of the cities with a full regulation, a social credit regulation available. The regulations themselves don’t mention a score, don’t mention this app anywhere in it. This app is just a promotional tool, a publicity stunt at worst, an educational device at best.

CL&P:     Going back to social credit in general and the three aspects that you talked about. The financial credit, the administrative regulatory, the blacklisting and then the moral education. When did the Chinese government start with this plan? When was the plan initially rolled out and why are they doing this now?

JD:      Let’s take it backwards, social credit has existed in a few incarnations. The modern incarnation is really within the span of that plan I mentioned, the overarching plan. Why are they doing it? Well, within the financial credit sector there is still a huge percentage of China’s population, I hear estimates of two thirds, that are the unbanked. They simply do not have a profile in the banking system’s personal credit system. The banks, the government hopes to reach them with credit because a credit economy grows faster, people can have money in two places at once. They needed something to base lending to these people on. If they had never taken out a loan, never bought a house, never had a mortgage, they had to look to other factors. Actually looking to foreign models they had the idea what if we look to some other indicators that this is a good person.

So far, that hasn’t panned out in China. Where the systems, including Sesame Credit run by Ant Financial, that have tried to create an alternative evaluation of a person’s credit as a borrower, ultimately it didn’t seem to be a good indicator of whether they would be good at returning debts and they had a conflict of interest where they were basing it mainly on how much was spent on their own products. That made it even more unreliable.  But beyond the financial sector, there is a trust crisis in China. One example that I like to bring up is a terrible story that happened a little while ago at a kindergarten here in Beijing, that I think did make international news. A rumor began that a teacher was injecting students with something. Then this grew into a larger rumor that they were drugging students and sexually abusing them at this kindergarten. It’s every parent’s worst nightmare, of course.

The police then go and investigate. What their investigation finds is that there was a teacher who was in fact pricking students fingers with a needle as punishment, but they weren’t drugging them and there was no real indication of sexual abuse. But from this rumor starting we can see the lack of trust on all sides and how quickly it spreads. The parents were willing to believe that their teachers would do this to their children and then try and cover it up. But they would further believe that the police, rather than have this international embarrassment, would fake an investigation and pretend this wasn’t happening to children in their own country just to make it blow over. There’s the lack of trust on all sides. Nobody trusts anyone. The school can’t trust its parents. No one trusts what the kids are saying and people are ready to believe that the police are engaged in a massive cover-up.

A quicker shorter example would be just thinking of how food safety violations traditionally have happened in China. Not everyone is as high profile as the milk powder scandals of a few years back but product safety in the food area has been a real issue. What used to happen was when you got fined or discovered for these major safety issues, you would simply reincorporate under another name and start doing business. No one would attach this bad will to you or know to be afraid of the products. So people creating shoddy goods could keep doing it in various forms. Part of what the social credit system hopes to do with these real name systems and unified codes is to make it so you can’t escape this record. Now of course that only follows you for a certain amount of time, and you can recover a reputation, but it’s to make it so you can’t just dodge the administrative regulation.

Would you sue your teacher?

CL&P:     Just to follow-up on that, that’s interesting because. . . I don’t know that the United States has any more trust than what you have or a lack of trust, but what you do have is a functioning legal system, you have a much more transparent government. Why is the Chinese government choosing to go what to me seems like a much more convoluted route where it’s top-down to impose this trust system as opposed to something bottom-up where, “Well this teacher can be sued, if this was America.” This teacher can be sued for pricking children. You get a discovery, you find out what’s happening and you have transparency with the police and the investigation, you have transparency in the court system. Why is the Chinese government choosing to go what to me just seems like a much harder route to instill trust or to instill a system where trust is. . . where you trust the system?

JD:      I don’t think it is a harder route. I won’t get into the reasons why people lack trust except that it’s important in all context to remember exactly how quickly China has developed. The culture has urbanized at an amazing pace. As for American’s trust, I think we actually have an undue amount of trust where I really do believe the FDA has made sure that packaged foods and processed foods that get to me are going to be safe. People from the FDA have told me that might be misplaced faith. Our companies through regulation, but also through litigation like you said, have learned to be more proactive about recalls. Most of the recalls are voluntary, et cetera. Is China taking a harder route to establish trust? I don’t think so.

I think it only sounds that way if you’re overthinking what social credit is again. Because what it really is, is that they’re just making sure. . . and again, this is mainly that middle core of administrative regulations, the most active currently in social credit. What they’re doing is they’re making sure that administrative records, and that primarily includes what they call the double designations of administrative punishments and administrative permits, that those are linked both to corporations by that unique number, but also to the leaders of that corporation, so they can’t just go start a new company somewhere. It’s really just about making the data accessible. It’s not imposing new obligations. It’s not making a complicated new ranking system. It’s really about making that data accessible.

Trying to lift the corporate veil. Will it work?

CL&P:     Which is not too far . . . I know working in the United States, working in landlord-tenant, you do see a lot of bad landlords that hide behind the corporate form and are doing horrible things. That’s something we fought for is to try to see behind that corporate form and that we’ve gotten pushed back in the United States. That does seem like a good thing to have greater transparency.

JD:      It’s funny because one of the most invasive parts of the actual social credit plans, contrary to what you see emphasized in media reports, is this “through the corporate veil.”  The fact that the actual controller, even primary shareholders can be held accountable for the conduct of a company. That could be really risky for individual rights. But what’s interesting is I think that part would actually sell really well to most of the American public.

CL&P:     Yeah.

JD:      I think that a lot of people have frustration that CEOs seem to walk away with golden parachutes from corporate misconduct. This system does, at least in form, look like it’s made to prevent that. Again, I think the main reason for it here is just to stop the people from repeating their offense in a different form. You see a lot of professional certification bans where somebody who is on a serious blacklist, wouldn’t be allowed to be the manager of a company in that field again after they had a violation. So if I created poisoned powdered milk, I wouldn’t be allowed to open another powdered milk plant within a certain period of time.

CL&P:     Right. Right. Let’s go back to the blacklists because I feel like that’s something that has gotten a lot of attention in the Western media too. Can you give a little bit more description, what exactly are these blacklists? Who are making these blacklists? How public are these blacklists? Can you give a little bit more information about the blacklists?

JD:      Yeah. Understand the blacklists, which is the administrative regulatory part of the system, which is currently the most active, in my mind by far, part of the system. It’s really a three step thing to understand. The first is real name registrations. Real name applies to when it’s a real person, a natural person. You have to give your real name to get a bank account. You have to give your real name to get a phone. And there’s limits on how many of these things you can get so that you don’t get 20 phones in your name and then give them out to your friends so they are not using their real name. Internet connections, real name. And that’s usually by the way real name behind the scenes. So the company you’re doing it with creates a real name, but if I’m going onto an online service, usually up front I can still use an alias to the public, but they have to have my real name on file somewhere.

CL&P:     So you can still be Bunny Honey.

JD:      I can still be Bunny Honey if I want, yes. Everything gets linked back to your real name should somebody need to figure out who’s responsible for something. Now that’s important because that is going to make all of your acts go into a file essentially. Which is why it gets compared a lot to China’s old 档案(“dang’an”) system, the archive system.

The second step is the blacklist creation. All of the administrative agencies were charged with creating standards for who would get put on these lists within their area of regulation. Those standards are when you violate a certain level of law, then we’re going to put you on it. They also in addition to the blacklists have red lists, which are for positive behavior. And they have warning lists, which they call “key scrutiny lists” sometimes. These are for behavior that was negative, but not quite bad enough to get you on the blacklist. The blacklist is usually a pretty high standard. Now again, this isn’t for generalized bad conduct. This is for certain violations within their authority. Often we even say you have to receive an administrative punishment for this.

CL&P:     Okay.

JD:      What getting on the blacklist does is, and these are industry specific blacklists that each area creates based on their regulatory jurisdiction, so the blacklists though do get centralized on this unified credit platform, which sounds way menacing until you realize it’s a website. What this means is monthly or so they send over the list of people who are to be entered into the blacklist for that particular area. These are searchable. They get released and you can Google or Baidu for them. You see wave one of such and such blacklist, wave two. It used to be easier to find some of them, but now it’s a little harder.

Then the third step of it is the more controversial one, which is that through Memorandums Of Understanding (“MOU”) between different agencies, between different ministries and different regulatory areas, there will be some joint punishment of people who are on the blacklists. Now what I have noticed in reviewing all of these blacklists and MOUs is that the joint enforcement has a few unique characteristics that make it different than the other, sorry than the industry specific punishments. A great example is the No-Fly List. The No-Fly List blacklist breaks down the negative conduct into two distinct types. The first type is aviation misconduct. If you get in a fight with a person at the boarding gate, yeah they’re not going to let you on the plane.

CL&P:     That would be the industry blacklist?

JD:      Exactly. That gets you on the industry’s blacklist-

CL&P:     Because you violated a specific industry regulation. In that regard do you get . . . I know you said they’re industry specific, there’s usually an administrative punishment. Will there be some kind of process by which you are informed that you’ve been put on the blacklist, that you’ve been informed you violated the law.

JD:      Yeah. Before you get-

CL&P:     Industry blacklists.

JD:      Right. In most situations an attack on a boarding gate ticket checker is a spur of the moment violation, but usually when you’re being alerted of misconduct they’ll tell you that one possible consequence of this misconduct is being placed on the blacklist. You’ll see that most of the blacklist standards, these rules laying out how the blacklist is created, will actually mandate that. That you have to get this warning. Then you get warned when you’re actually entered on it again. If there’s an administrative punishment involved, you have the normal remedies involved there of having administrative reconsideration or administrative litigation in the courts to fight it.

CL&P:     Okay, it’s like if you jump a turnstile on a New York City subway, you get a ticket from the police officer. If you want to fight it you go to the Transit Bureau Court System.

JD:      Right. There are in theory ways to be arguing against this, China’s system being what it is, you might find this unreliable. But yes, there are methods. Those in an aviation specific offense that gets you banned from the plane, that’s what could have happened before already.

CL&P:     Right.

JD:      That’s just the Civil Aviation Administration doing its thing. It has to give a punishment within its sphere of power, and so it’s going to block you for this misconduct.

The second category though that they concern themselves on the blacklist is some of these joint offenses. That includes things like where you’ve been given a securities violations fine.

CL&P:     Okay.

JD:      Here it’s a little different because it’s not just punitive. It’s not just you get a fine for your securities violation and you can’t ride planes, that’s your punishment. It’s coercive, you can get off of that by paying the fine. It’s meant to make you do something. The most famous example of this and the most commonly confused with being the entire social credit system is the court judgment defaulters blacklist. Part of this is a legal jargon problem that people have mistranslated it. What it literally should be is a list of people who have defaulted on obligations from an enforcement court. What that means is that an enforcement division of a Court has issued a ruling that says, “You have either failed to perform on a court award at a civil trial or you were given an administrative punishment, didn’t pay that fine, didn’t act on it.” Then the administrative organ went to the Enforcement Court and got a court judgment saying-

CL&P:     – You got a court judgment against you –

JD:      – You had failed to fulfill your obligations there. That one has an MOU. The criteria for the blacklist there is failure to perform on an enforcement judgment, which is a single criteria. But because it has court judgment involved maybe, more ministries, more departments, are willing to sign on for joint enforcement of it. It has really wide reaching consequences, including a plane ban, a ban on riding on the best trains, some that I really don’t care for, like your children can’t go to private schools. These are all called limits on high spending or high consumption.

CL&P:     Let me just for our listeners that are based out of China. I mean I guess how different is this from what’s going on in some sectors of the United States, right? I know from my practice in New York State if you have a state tax debt of a certain amount, I think it’s maybe about $50,000, I forget, but a lot of people do. Then the New York State Tax Authority informs the Department of Motor Vehicles and Department of Motor Vehicles revokes your license. Is that different? How similar is that to what’s going on here with these joint enforcement of punishments?

JD:      It’s the same concept and I think when there’s a court judgment in play, a lot of countries don’t have as much problem having these auxiliary or supplementary consequences to get you to pay. The idea is that you’ve had your due process and now you should be doing it. Sometimes it doesn’t seem to make much sense. Suspending driver’s licenses in the US is going to make it harder for you to earn money to pay back those judgments.

CL&P:     Exactly.

JD:      In China the idea is that most of these awards are going to be monetary and you shouldn’t be spending a lot of money if you haven’t paid back this award. Your money should be going to fix that problem.

Reading a judgment in a Chinese court

CL&P:     Let me ask another question. In the United States when you get a money judgment against somebody you can garnish their wages, you can put a lien on any property they own. You can do a search to figure out what are their assets and how do I get the money out of those assets? Why is that not a system that’s working here in China? Why are they going this route of having this joint enforcement blacklist to enforce court judgments?

JD:      They have similar procedures here, it just haven’t proven effective enough. That could be because individuals don’t always have the assets. It could be because they have legal mechanisms for shuffling them around and they’ve tried this as much. But this is aimed to get at the individual. The best way to think about that is if you look at what it’s; the judgment defaulter is a corporation and we talked about going behind the corporate form. Instead of just getting the corporation, we’re going to make it so the CEO’s kid can’t go to private school and the CEO can’t fly on a plane. Now do I agree with that? No, I think that actually has a lot of problems. One of the main problems is it treats all court judgments as equal and I think that say a judgment for me to give a formal apology to somebody or to visit my mom more often on the holidays is very different than an environmental polluter’s judgment to clean up an eco-disaster.

CL&P:     Right, right.

JD:      I don’t think the consequences should be the same for those. Now the court does have some discretion, doesn’t have to impose all of these exactly the same, but my feeling is that more often than not it’s just they get a blanket restriction on high spending.

What is the impact of the social credit system on China’s farmers?

CL&P:     In terms of the high spending, that’s another interesting aspect I think of it is that they just are blacklisting high spending. They’re blacklisting you and it impacts your high spending stuff. It does seem like the repercussions or the targeting is more for rich people or corporations as you said. So to the extent that people captured by this it’s people who fly on planes, it’s people who take high speed rails, it’s people who send their kids to private school. How intentional was that? Because you still, you must have farmers in the countryside that are suing each other that will have a small judgment. Does the law take into blacklisting of them. And how intentional was it to go after people that are more economically well-off?

JD:      You’re right, there are limits on high spending and I think that’s because, like I said it’s seen that you should be fulfilling your financial obligations before you get to spend money on pleasure. Of course there’s farmers with disputes between them and people who don’t have means, it may not be as likely that they go through the court system to try and resolve those issues.

CL&P:     Okay, that’s true.

JD:      I think the crisis and certainly the part that holds back the economy is when it’s larger sums involved. It’s about clearing out these bigger cases. But mainly I think there’s also a feeling that this is in some way just. Like I said, that we’re not going to let you have fun until [you pay]. Now on a lower level there are some places that try things, even with the judgment defaulter list that are along the lines of shaming. That is a mechanism that would work beyond just limiting your own spending, but letting the public know. One place, blanking on where it was, but has it where you’re on the judgment defaulter list when people call your phone, before it picks up, instead of playing a nice waiting music, it plays a message that they are calling a person who is on the judgment defaulter list and they should be careful with you.

People have said that they actually do get pressure from their peer groups from being on this list. I think that would be a great study if someone wanted to look into something about what’s really happening with social credit is whether this is actually working. Are court judgments getting enforced more effectively? Are people not wanting to be on the blacklist. It’s a great area for research. We’ve seen some stuff about public opinion of social credit, but social credit is such an expansive term and really a work in progress as a term that covers so many different programs that I don’t think it gets too much. Whereas the judgment defaulter list is pretty concrete item.

Altercations with flight attendants can get you banned from flying

CL&P:     I mean I guess that’s something that you’re touching upon that is interesting too is, yeah, to what extent do people really care if they’re on the blacklist for something stupid. Let’s say. . . to what extent do you think in Chinese society, young people, middle aged people actually care that they might be on a blacklist because they had words with a flight attendant and now they’re on the No-Fly List or something like that. Or to what extent is that a badge of “oh, hey, I had a fight with a flight attendant.” Or when you look in the United States like I know for doctors you can look up how many medical malpractice cases are against them. I always assume there’s going to be one or two because we’re a much more litigation happy society and I don’t really take it to heart. Now if there’s like 20 I might not go to that doctor. To what extent do you think this is influencing or shunning people from society?

JD:      The judgment defaulters list, to focus on that, that actually limits enough of your conduct that it’s going to have consequences as its goals. Most of the industry specific blacklists, and these MOUs that enforce them with joint enforcement, limited joint enforcement, I don’t think there’s a risk of anyone seeing it as a badge because what it really is is just you got an administrative fine, an administrative penalty, and they tend to be for fairly serious things, but professional things. The target of that is mainly corporations not individuals and the individuals primarily come into this by virtue of their association with a corporate entity. So being the actually controller, or stockholder, CEO, or the manager for who was responsible for a problem.

It’s not going to be so much even about you, you’re just going to be trying to fix the problem. If you worked for a factory anywhere where the environmental authorities came and said that you were just putting out too much exhaust or waste water and gave you a fine saying that you need to fix this, well that’s not ever going to be something like well I just don’t care. You’re going to have to deal with it. You might do a cost benefit analysis but you’re going to have to address it. That’s really all the industry specific blacklists are. It’s worth repeating that I have seen so far there are no new obligations imposed by social credit, it is just calling the obligation . . . It’s consolidating existing obligations and penalties into a blacklist for the more serious ones and warning list for less serious ones.

CL&P:     Has anybody done any studies like. . . let’s talk about the court blacklists which is the judgment default. Has anybody analyzed that blacklist to see how many are just average Joe’s that just got sued and how many are corporations doing bad things and haven’t paid their debts and the people associated with them so the CEOs that are behind them?

JD:      Yeah, so there’s been monthly, a really decent analytic reports and they don’t do the full social credit system but they do do the judgment defaulter system pretty well where they do give that sort of breakdown of how many natural persons. Now it’s important to remember that with that piercing the corporate veil aspect we talked about, corporations are going to have natural persons to go on the list with them, but the list for the judgment defaulters is always there and searchable. The monthly report tells you not only how many entities and real persons were put on the list in the month, but how many came off in the month. You can take a look at that at any time. I don’t have the list in front of me but it is a lot of people.  I think in September it was over 220,000 people got put on the list.

CL&P:     Okay. Just in terms of the corporations and the people associated with it. So what’s going on here on the defaulter judgment list is you’re putting people like the CEO individually and you are, in what we call in the United States, piercing the corporate veil.

JD:      Yeah.

CL&P:     To what extent, I mean in the United States you can’t really do that, it’s very, very hard to pierce the corporate veil, but here by putting somebody, giving them repercussions, let’s say CEO-

JD:      Legal representative or actual controller-

CL&P:     Putting them on the No-Fly List, they’re getting the repercussions of their corporation’s bad business-

JD:      That’s right.

CL&P:     – Bad acts. So to what extent is this creating a new liability for those people, or have you always been able to pierce the corporate veil under Chinese law?

JD:      That’s a good question. I think this is certainly a new, more direct consequence for them and even for individuals who are owing a court judgment, this is a new enforcement mechanism. Joint enforcement didn’t exist and there’s actually debate in Chinese legal circles if whether it’s legal. Because where’s the authorization for this. I think though even looking only at the judgment defaulters list I think that there’s still very much a live controversy over whether this is allowed towards anyone because where does the Civil Aviation Authority get its power to ban you from flying based on this court judgment, where is that coming from? Do the courts and the Civil Aviation Authority have that power unto themselves?

CL&P:     Right, right, right. In terms of the blacklist itself, can you get off of the blacklist?

JD:      The judgment defaulter list?

CL&P:     Yeah, the court, let’s stick with just the court one because that’s the easiest one.

JD:      Let’s call it the judgment defaulter list to make it clear because I know some reporting has thought there was a general credit blacklist that if you fall below a certain something then you’re on a certain magical citizenship list, but this is for judgment defaulters.

Your question was how do you get off it? You can perform, you can perform on the obligation. In theory, you should be able to show that you shouldn’t be on it in the first place. And you can show that you don’t have the ability to act on it because it’s supposed to only apply to people who are willful judgment defaulters. That is, you have the ability to perform but are not performing.

CL&P:     If you were let’s say the CEO of corporation X, corporation X doesn’t pay because corporation X is basically bankrupt, you’re on the No-Fly List, you can essentially petition, would it be the court or would it be. . .this is for the court default judgment blacklist. You can petition say look, I don’t have, my corporation doesn’t have enough money, I don’t have enough money, can you please take me off. Is that it?

JD:      That’s right. You would present the evidence in an appeal or a collateral appeal to show that either you’ve already performed and don’t owe this or that you’re somehow ineligible, which would include that you don’t have the ability to perform.

CL&P:     Okay, so this is sort like in the IRS, like I know with tax debt, there’s a currently not collectible status for individuals that are so low income it’s like getting blood from a stone and then they can go into that status.

JD:      Right, and this would be . . . it seems from this outsider’s point of view that it’s less proceduralized that it ought to be at this point. People have complained about trying to get off the list and get news about where they are, why they’re on the list and had trouble. I don’t doubt that, but I think that’s more of a bureaucratic problem than anything else.

CL&P:     Okay, so the bureaucracy is still being worked out and stuff.

JD:      Yeah.

CL&P:     Here’s another question, what about foreign corporations doing business with China? How does this impact them?

JD:      To my understanding when foreign corporations do business here they have to have a legal status here.

CL&P:     Right.

JD:      When they do, like United Airlines, they have a social credit number attached them. I think foundations as well. Anything that has a legal entity status here, that legal entity is part of the system.

This is the end of Part 1.  To read or listen to Part 2 of our interview with Jeremy Daum, click here.

China’s Upcoming Universal Periodic Review: A Guest Blog Post from Fordham Law School’s Leitner Center

By , November 4, 2018

This coming Tuesday, the United Nations’ Human Rights Council will conduct China’s third periodic review.  Given the increasing authoritarianism of the Xi Jinping regime, many countries and NGO’s have filed critical submissions to the UN and have listed questions that the Human Rights Council should ask the Chinese delegation in regards to the country’s current human rights violations.  Expect the Chinese government’s illegal internment of millions of Uighurs in Xinjiang Autonomous Region to be a central issue. 

Today, Caitlin Hickey, Joey Lee, Reece Pelley and Elisabeth Wickeri, advocates from Fordham Law School’s Leitner Center for International Law and Justice offer their insightful assessment of China’s major human rights violation: the continued – and increased – use of non-judicial, and at times illegal, arbitrary detention of people the Chinese government just doesn’t like.  While arbitrary detention will certainly arise in the context of the Xinjiang internment camps, the authors, in their guest blog post below, remind us that it is a far more prevalent practice, impacting other vulnerable populations, and that the U.N. should not forget to question the Chinese delegation about the government’s treatment of these vulnerable populations.

Left Behind on the Road Towards “Human Rights with Chinese Characteristics”:
China’s Universal Periodic Review and the Arbitrary Detention of Stigmatized Communities

Caitlin Hickey, Joey Lee, Reece Pelley, Elisabeth Wickeri*

As China prepares to present its human rights record before the full membership of the United Nations (UN) this Tuesday, we hear the beginnings of a familiar story. Leading up to its third appearance at the Universal Periodic Review (“UPR”)—a UN Human Rights Council mechanism through which each of the UN’s 193 Member States undergoes a human rights evaluation based on recommendations offered by fellow Member States—the Chinese government’s opening UPR statement invokes specialized national conditions, the unique needs of its people and its constant lodestar: “always following the road of developing human rights with Chinese characteristics.” “This is a road that takes the people as the center,” China explains, and “the road of human rights development always takes the well-being and interests of the people as the starting point and end result.”

But haven’t we been down this road before? Advocates for some of China’s most stigmatized communities certainly think so. These advocates have highlighted that these communities are far from the “center” and their “well-being and interests” are rarely considered. Since the UPR process began for all UN Member States in 2008—and arguably in most of China’s UN human rights interactions—certain vulnerable populations have been rendered effectively invisible. Of course, China’s most recent UPR statement proclaims that “it upholds the principle of the people’s primacy” while “promoting the comprehensive development and common prosperity of the people as a whole.” But who exactly is included in China’s definition of “the people”? And who gets left behind on China’s chosen “road” to human rights accountability?

A crackdown on some of China’s sex workers. Photo courtesy of Agence France-Presse/Getty Images

One group to pay particular attention to is China’s sex workers. Communities of sex workers and people who use drugs inhabit every corner of the world. In China, they are men and women, young and old, of all ethnicities, and of all sexual orientations and gender identities, living in rural and urban areas in every province, city, and village of the country. And they are among the most vulnerable in Chinese society as result of profound social stigma. In China, these communities face all manner of discrimination, including enormous barriers blocking equal access to health and employment, as well as violent physical and emotional abuse—not only from state law enforcement actors, but often from within their own families. These are precisely the kinds of marginalized populations who need their government to intervene and protect their fundamental rights, and yet they are often among the first to be left behind on China’s “road” toward “human rights with Chinese characteristics.”

A close look at China’s UPR statement makes clear how stigmatized communities like these sex workers have been at best forgotten and at worst purposefully excluded from government human rights efforts. This is especially apparent in China’s continued use of various forms of arbitrary detention. Since China’s second UPR cycle in 2013, China has rightly been praised by the international community for taking steps to eliminate one of the most long-lasting and widely condemned systems of arbitrary detention—the Reeducation Through Labor (“RTL”) system; in fact, China consistently showcases its efforts at abolishing RTL in its UPR statements. Yet, in eliminating the RTL system, China unfortunately has not committed itself to eliminating other forms of administrative detention that look and feel remarkably similar to RTL but specifically target stigmatized and marginalized groups. In the UPR report it prepared for Tuesday’s session, China affirms that it “continues to improve the conditions of custody and supervision to ensure that the personal security of detainees and prisoners is not violated.” However, for sex workers and people who use drugs who are held in China’s administrative detention systems, this couldn’t be further from the truth.

Drug offenders exercise at a detention center in Shenyang in China’s northeastern Liaoning province. Photo courtesy of China OUT/AFP/Getty Images

The persistent arbitrary detention of sex workers and people who use drugs in China’s Custody and Education (“C&E”) [收容教育] and Compulsory Isolated Treatment (“CIT”) [强制隔离戒毒], administrative detention systems that have flourished even with RTL’s demise, are compelling examples of the invisibility of stigmatized populations in China’s UPR review; in fact nowhere in China’s 2018 UPR statement is there a focus on the rights of these groups. Sex workers and people who use drugs can be detained in C&E centers and under the CIT system respectively without judicial oversight or due process and without recourse to detainee protections otherwise guaranteed under Chinese law, all stemming from regulations that are overly broad in scope with vague definitions subject to politicized application.


Administrative detention under the C&E and CIT systems bear remarkable similarities to the system of RTL that China proudly announced to have abolished in 2013. In all these systems, individuals are exposed to risks of torture and other ill treatment—with documented detainee reports of inadequate healthcare, non-consensual medical testing, forced labor, and physical and mental abuse. Among many other troubling features, C&E centers subject detainees to long hours of forced, uncompensated labor, as well as compulsory and non-consensual physical examinations and medical testing. While in CIT, detainees rarely receive adequate healthcare or treatment and are subjected to forced labor and physical violence perpetrated by supervising employees. Additionally, while being weaned off drugs, CIT detainees are also subject to strenuous physical activity, denied critical medication or pain relief, and rarely offered counseling. Of course, ongoing systems of arbitrary detention are not limited to C&E and CIT. The detention camps in Xinjiang that subject Muslims to political indoctrination and substantial rights abuses bear the hallmarks of arbitrary detention in the context of China’s administrative detention framework. While RTL has been officially abolished, these systems persist, largely because of the invisibility of the populations who are detained within them – sex workers, people who use drug, China’s Muslims. On China’s “road of developing human rights with Chinese characteristics”—“a road that takes the people as the center”—it appears that certain populations just aren’t valued enough to be considered “people.”

Leitner team – (from L to R) – Joey Lee, Caitlin Hickey, Reece Pelley & Elisabeth Wickeri in Geneva last month.

Fortunately, despite this sense of déjà vu embarking on China’s well-worn path of UN human rights engagement, China’s upcoming third UPR offers the possibility for something different. The UPR is a mechanism through which each and every country undergoes a human rights review based on recommendations offered by UN Member States. China’s widely publicized and praised commitment during its second UPR in 2013 to abolish RTL came alongside a number of clear and direct recommendations from several UN Member States to do just that—eliminate RTL detention and commit to reforming China’s administrative detention system. These governments included France, Germany, Sweden, Canada, Belgium, the United Kingdom, and the United States. As the UN Member States gear up for China’s latest UPR on November 6, they must insist that China honor its commitment to “the people”—meaning all people, including stigmatized and vulnerable communities at the margins of Chinese society, including sex workers and people who use drugs in C&E and CIT detention. Perhaps for these groups, China’s third time at the UPR will be the charm, and the international community can bear witness to their lives, which have for so long been invisible in China’s human rights engagement at the UN.

*Joey Lee and Elisabeth Wickeri are lawyers with the Leitner Center for International Law and Justice at Fordham Law School; Caitlin Hickey and Reece Pelley are law student advocates. The Leitner Center works to strengthen rule of law and human rights protections for vulnerable populations worldwide. In particular, in cooperation with in-country partners, the Leitner Center works extensively with civil society organizations to support and empower vulnerable populations in the People’s Republic of China (“China”). Drawing upon the expertise and documentation of China-based partners as the basis for analysis and recommendations, the Leitner Center submitted a Stakeholder Submission in advance of China’s upcoming UPR, and participated in advocacy in the lead-up to its November 6 review.

CECC Issues 2018 Annual Report

By , October 21, 2018

The Congressional-Executive Commission on China’s (“CECC”) 2018 Annual Report (“the Report”), released on October 10, 2018, comes at a crucial point in world affairs.  The United States is on the retreat from the global stage, withdrawing from key international agreements and organizations, and China appears intent to replace it.  But as the CECC’s 2018 Annual Report makes clear, with President Xi Jinping’s complete consolidation of power this year and the re-entrenchment of the Chinese Communist Party (“CCP” or “the Party”) within the state, China’s rise will likely alter the current world order and challenge U.S. values and interests.  If anything, China’s recent behavior – the public disappearance of Meng Hongwei, the former Interpol chief and the issuance of more discriminatory regulations directed at Uighurs –  only substantiates CECC’s predictions that China’s rise will not be inline with the values that have dominated the world order since the end of World War II.

Former Interpol Chief, Meng Hongwei, now in NSC confinement.

The CECC was created in 2000 to monitor China’s human rights commitments, review its progress in developing a rule of law, and maintain a database of Chinese political prisoners.  With a staff of China experts, the CECC has become a leading voice on China’s progress in regards to international human rights standards and the development of rule of law in more sensitive areas such as freedom of expression, criminal justice and access to justice.  As with its previous reports, the 2018 Annual Report is extremely well researched and extensively documented, providing an important snapshot to what is really happening in China, making it an essential read.


While prior annual reports highlighted China’s progress in trying to meet international human rights standards or deepen its commitment to rule of law, the 2018 Annual Report is devoid of any positive developments.  And rightfully so.  As the Report makes clear, three alarming developments in the past year reflect a country intent on disregarding international human rights norms and turning its back to a rule of law.

A police state in the Uighur province of Xinjiang in China’s far West. (Photo courtesy of The Week (UK)).

Perhaps the Report’s most urgent issue is the Chinese government’s mass detention of what is estimated to be 1 million Uighurs in internment camps. Without any trial or criminal charges, these internment camps reflect the Chinese government’s stated goal to “sinicize” religion, including that of the Uighurs, a Muslim minority population in Xinjiang province.  And the mass detentions show no signs of stopping. As the CECC documents, the Chinese government’s own procurement data shows its plan to build more camps.

A second worrying development is the re-entrenchment of the Party within the State.  During much of Chairman Mao’s time, the Party and the State were essentially one, but since then, the Chinese government has sought to separate the Party from the government bureaucracy.  Until now.  In March 2018, the Party Central Committee issued a restructuring plan to again embed the Party in government work, with the Party taking a leadership role.  Perhaps the most notable example of the infiltration of the Party into everyday life is the creation of the National Supervisory Commission (“NSC”), an anti-corruption commission that has the power to “confine” – in other words, extra-judicially detain – any Party member or state employee suspected of corruption for three months without access to an attorney.  Employees of state-owned enterprises, staff of public hospitals and public educators all fall under the NSC’s purview. Even non-Party members and non-state employees could be subject to “confinement” by the NSC if they too are suspected of involvement in official misconduct.  Outside of the judiciary, the NSC is anything but due process.

China’s ubiquitous security cameras. (Photo Courtesy of the Huffington Post).

Finally, the 2018 Annual Report highlights the Chinese government’s continued use of technology as a tool of repression. The Chinese government is seeking to create a biometric database as well as a “social credit system” which, if realized, could have lasting effects on certain individuals.

The 2018 Annual Report concludes by offering some key recommendations, notably addressing abuses in Xinjiang publicly – and with key allies – before the United Nations, raising the issue of human rights in all bilateral relations, not just during the Department of State’s human rights dialogues with China, and condition law enforcement cooperation, such as cooperation on extradition, on a signed agreement from the Chinese government that it will respect due process in all situations.  But one wonders if these recommendations fall on deaf ears.  The CECC is supposed to be a joint commission between Congress and the Executive.  But as reflected in the masthead for this year’s Report, the Executive positions on the CECC remain empty.  While the Trump Administration is not shy in lambasting China on a variety of issues, and in early September word was leaked that it was considering economic sanctions against China for its internment of Uighurs, the fact that key Executive positions on the CECC remain empty over a year and a half into the Trump Administration, belies any meaningful commitment by the Administration to human rights and rule of law in China.  An unfortunate development given the severe situation documented in the CECC’s 2018 Annual Report and the danger it poses to the United States and the post-World War II world order.

Book Review: Paul French’s City of Devils

By , September 27, 2018

Paul French, the author of the acclaimed true crime book Midnight in Peking is finally back.  It’s the 1930s again, Japan is on the march, brutally invading China, but in City of Devils: The Two Men Who Ruled the Underworld of Old Shanghai, French’s thrilling new book, the foreigners who occupy Shanghai’s International Settlement could care less.  As China burns and the rest of the world goes to war, these “Shanghailanders” frolic in neon-lighted nightclubs, gamble their immense wealth at the newest roulette tables, and drink and smoke opium till their hearts content.  Their frivolous lifestyle propped up by a seedy network of gangsters, ex-cons and grifters.

City of Devils follows the two most influential characters of that underworld – “Dapper” Joe Farren, a.k.a. Josef Pollack, a Jewish-Viennese émigré who uses his dance skills and panache to set up some of the Settlement’s best music and dance acts, and “Lucky” Jack Riley, a.k.a. Fahnie Albert Becker, an American ex-con, who escaped prison, and with no passport, papers or identity, fled to the only city that would take him: Shanghai.  Starting with nothing when they arrive in the late 1920s, the two would build an empire of sin, Farren with the night acts and Riley with slot machines, the one gambling device that was not declared illegal in the Settlement, very much an oversight of the law.  In the clipped speech patterns of a 1920s gangster film, French recounts Farren and Riley’s decade-long rise and their unique business methods, methods that would eventually catch the eye of the United States government.

Meticulously researched and eloquently written, French captures the feel of the time period and the lawlessness that seemed to flourish in Shanghai’s International Settlement, especially after the Japanese takeover of Shanghai in 1937.  The Japanese did not invade the International Settlement or the French Concession when they took Shanghai, allowing the foreigners to go on living their lives as if nothing was different.  But for many Shanghailanders, the writing was on the wall with Japan’s continuous advancement in China.  Those Westerns who could get out of Shanghai, did.  By late 1937, early 1938, the only foreigners left in Shanghai or those who had no choice – Jewish refugees fleeing the Holocaust, earlier Jewish émigré like Farren who can’t go back to Europe, White Russians who fled the Bolshevik Revolution, people like Riley with a crime record so long, that arrival back to the United States would only mean prison, and businessmen and their families whose finances were so entwined with Shanghai that leaving did not seem possible.

It is with 1937 that French’s story really peaks, with Riley, Farren and a slew of other colorful characters all but running the International Settlement.  Because of an increase in opium smuggling to the United States, the U.S. government sends over government agents to try to break up some of the criminal gangs.  But their limited resources are no match for the wealth of the underworld.  Nor for a society that seems more intent on protecting the Rileys and the Farrens of Shanghai so that their evening entertainment can continue unabated.

Young Victim of the Battle of Shanghai

But while many of French’s characters are blissfully ignorant of the world outside of the Settlement, French is emphatically not.  At no point does he allow the reader to forget the human suffering brought upon the Chinese people with the ruthless advancement of the Japanese army.  Only a few months after the fall of Chinese Shanghai comes the rape of Nanjing, an orgy of violence perpetuated on a civilian population, the scale of which the world had not seen before.  But the Battle of Shanghai, considered one of the bloodiest battles of the war, also reaped destruction, taking the lives of over 300,000 Chinese citizens.  And even after that battle, the Chinese continued to suffer.  While the Shanghailanders of the International Settlement sip their imported champagne, Chinese citizens were starving to death, collapsing and dying in streets by the truckload.  Often their bodies just left to rot.  In a particularly harrowing detail, French describe the hundreds of coffins filling up local coffin storage building, with the hope that the burials will occur before the spring when the bodies begin to thaw.  It is that contrast in experiences that leads to the reader’s ultimate disgust with the Shanghailanders.  Eventually history would catch up with them, with the Japanese invading the International Settlement almost immediately with the attack on Pearl Harbor.

French does an amazing job of describing the Shanghai of the 1930s, a brief time period that has been romanticized by many, but that French looks at with a more honest eye.  It is true that French takes many liberties and embellishments with the private thoughts and conversations of many of his characters – the real people who did exist – and that has opened him to some criticism.  But that is the genre that French has created – a novel-like feel based on true facts.  Facts that French acquired through years of researching the archives of the International Settlement, of the foreign police in Shanghai and the various foreign courts (see French’s recent interview on the Sinica podcast for more detail on his research).  Certainly the criticism is fair, and perhaps a bibliography listing the sources French used could have been informative as well as interesting.  And it might have been better to put the glossary of Chinese and other foreign words at the front of the book to help those not familiar with the words.  But other than, this is a fun read.

Rating: ★★★★☆

City of Devils: The Two Men Who Ruled the Underworld of Old Shanghai, by Paul French (Picador, 2018), 246 pages.

Forced Departure of American Journalist Megha Rajagopalan – Is it Really Not About Xinjiang?

By , September 9, 2018

***Correction – After this post was published, a reader with experience on Chinese visa issues informed China Law & Policy that it isn’t always that a news outlet cannot establish a permanent office because of economic costs or means, but also because the Chinese government will not allow certain news outlets to establish a permanent office, thus preventing those reporters the ability to obtain the J-1 visa.  We have corrected the post to reflect this important difference and thank the person who informed us.  EML, Sept. 10, 2018***

Buzzfeed’s Former Beijing Bureau Chief, Megha Rajagopalan

Every three years, the Chinese government has effectively expelled a foreign journalist from China.  It started with Melissa Chan, an American journalist working for Al Jazeera, in 2012.  In 2015, it was Ursula Gauthier, a French journalist for L’Obs.  And last month it was Megha Rajagopalan, the Beijing Bureau chief of the online news magazine Buzzfeed.

With each expulsion of a foreign journalist comes speculation as to why.  Why did the Chinese authorities fail to renew a visa or cancel a press card.  The Chinese government hardly ever explains its reasons, citing that such failure to renew a visa was “in accordance with law.”  But no law or regulation is ever cited, let alone a specific provision.  As a result, most outside of China view the Chinese government’s decision having more to do with the reporter’s coverage of China than with any violated regulation.  With Gauthier, the Chinese government was more explicit about its decision to cancel her press card, with the Ministry of Foreign Affairs (MOFA) criticizing Gauthier by name because of her scathing editorial on the Chinese government’s treatment of the Uighurs, a Muslim ethnic minority, in the Xinjiang Uighur Autonomous Region of China.

Here, there can be little doubt that it was Rajagopalan’s reporting that resulted in her effective expulsion from China.  Under the law, MOFA clearly could have renewed Rajagopalan’s short-term journalist visa.  For some reason, it chose not to

Rajagopalan’s Reporting on Xinjiang – Why Is the Chinese Government So Sensitive About This?

Like Gauthier, Rajagopalan had done some hard-hitting reporting on the Uighers in Xinjiang, with an October 2017 article exposing the Chinese government’s increased surveillance and its mass detention of Uighurs for no other reason than being Uighur. Reporting from Xinjiang, Rajagopalan’s article was one of the first to uncover the Chinese government’s frightening oppression of Uighurs.  It also won her the Human Rights Press Awards’ Best Features Article (English) for that year.  In July 2018, Rajagopalan followed up her ground-breaking piece with another explosive article that brought to light the Chinese government’s pressure tactics on Uighurs abroad, including threats to send their Xinjiang-based family to internment camps if they do not spy on other Uighurs.

Xinjiang has long been a sensitive area for the Chinese government, fearing that the Muslim Uighurs could launch a successful separatist movement.  As a result, for over a decade, the Chinese government has instituted a national policy to “Go West,” encouraging ethnically Han Chinese to move to Xinjiang to develop this resource-rich area.  With the Go West policy, Xinjiang’s population has changed dramatically, with a current Han population of 40%, compared to 6% in 1949.  And with the increase in the Han population has come a decrease in the Uighur’s political clout and self-governance since Chinese Communist Party membership usually means giving up religion.  Few of the ethnically Muslim Uighurs are atheists and hence, unable to join the Party, and thus unable to effect change in their own region.  For example, when, in 2009, the Chinese government decided to destroy much of the the old city of Kashgar, a city that stood for centuries and was perhaps the most Uighur area of all of Xinjiang, the Uighurs were unable to stop it.  Needless to say, such loss of power over their own destinies and the attempted destruction of their own cultural identity has not produced a population satisfied with Chinese rule.

Some of the routes on China’s One Belt, One Road

And Xinjiang’s importance to the Chinese government has only increased in recent years as Xinjiang is central to the success of China’s “One Belt, One Road” policy.  Launched in 2013, One Belt, One Road is China’s very serious and well-funded attempt to exert economic influence globally. Xinjiang is the key land route to Central Asia and Europe, making it even more crucial that the Chinese government subdues the Uighur population.  To do so, in 2015, the Chinese government passed two national laws that had an disparate, negative effect on the Uighurs of Xinjiang: the broadly-worded National Security Law, that equated religious “extremism” with terrorism, and the Counter-Terrorism Law, which gave security forces significant powers to prohibit “extremism.”   Xinjiang was the first province to issue local regulations to carry out the precepts of the Counter-Terrorism law, including mandating governmental “aid and education” for those individuals who, while not convicted of any crimes, were induced into participating in terrorism or extremism, seemingly laying the groundwork for the mass detentions currently occurring. (See Xinjiang Implementing Regs of the Counter-Terrorism Law,  Art. 38)  And Rajagopalan’s article was one of the first to show that Uighurs were in fact being massively surveilled and detained in re-education internment camps without ever being tried – let alone convicted – of any crime.  Instead it was the simple practice of their religion that the government viewed as “extremism.”

Since Rajagopalan’s October 2017 article, both by the United States Department of State and the United Nations estimate that close to a million Uighurs have been sent to these internment camps without any trial, all for the purpose of stamping out the Uighur identity.  And there appears to be no end in sight with satellite images showing the rapid building of what looks like even more internment camps.

Chinese police officer stands guard outside a mosque in Xinjiang.

As more and more information began to emerge in the international media about the depth of the Chinese government’s whole-scale human rights violations against Uighurs, and as foreign governments and international bodies began to take notice and advocate sanctions against China, Rajagopalan’s visa was almost up and the Chinese government was in the midst of determining whether to renew it.  In May 2018, MOFA, the oversight agency of foreign journalists, informed Buzzfeed Rajagopalan’s journalist visa would not be renewed, forcing Rajagopalan to leave China as soon as it expired.

When questioned at an August 23, 2018 press conference, MOFA spokesperson Lu Wei stated that Rajagopalan’s visa issue was handled “in accordance with law and regulation” and, in his remarks, made a distinction, without explaining the significance, between Rajagopalan’s visa – a short-term journalist visa, known as a J-2 visa – and a resident foreign reporter’s visa, known as a J-1 visa.

Are J-2 Visa’s Non-Renewable Under Chinese Law?

Unlike the United States, where there is only one type of journalist visa, Chinese law distinguishes between two types of journalist visas, the J-1 and the J-2.  The J-1 visa can only be issued to journalists whose news agency has a permanent office in China (See Regulations on the Exit-Entry of Foreign Administration of Foreign Nationals (“Exit-Entry Regulations”), Article 6(5)).  Because of the “permanent office” requirement, J-1 visas are increasingly issued to only more traditional outlets; think the New York Times, the Washington Post, the Guardian, etc.  J-1 visas also confers residency status, and J-1 visa holders must also apply for a Press Card from MOFA within 7 business days of their arrival in China. (See Regulations of the People’s Republic of China on News Coverage by Permanent Offices of Foreign Media Organizations and Foreign Journalists (“Foreign Media Regulations”), Article 10).

J-2 visas are issued to journalists who come to China for short-term reporting and there is no permanent office requirement. (Exit-Entry Regulations, Article 6(5).)  Traditionally, those are journalists coming to do a one-off story; for example, when a New York Newsday reporter travels to cover the U.S. President’s visit to China, or the Des Moines Register sends a reporter to cover the pork market in China.  J-2 visas are limited to six months (Foreign Media Regulations, Article 2) and J-2 journalists do not obtain a Press Card.

MOFA spokesperson Lu Wei

But increasingly, news agencies are seeking to send long-term reporters to China without establishing a permanent office.  This is especially true of online outlets like the Huffington Post and Buzzfeed, who, according to a source with knowledge of China’s visa issues, the Chinese government will not permit to set up a permanent offices.  or any agency that just doesn’t have the deep pockets of a Wall Street Journal or a New York Times.  But because they do not have a permanent office, Thus, their China-based reporters cannot obtain a J-1 visa.  Instead, the Chinese government has been providing these reporters with a J-2 visa with the understanding that the visa will be renewed when the initial term is over.  According to the New York Times, this was the deal that Buzzfeed worked out with the Chinese government prior to Rajagopalan’s arrival –a six month J-2 visa renewable upon its expiration. But when Rajagopalan’s six months were up, MOFA failed to renew her J-2 visa.

MOFA’s response to the question about the failure to renew Rajagopalan’s visa – that she was not a resident foreign reporter – seems to imply that the law does not permit the renewal of J-2 visas.  But this is not true.  Article 29 of China’s Exit-Entry Administration Law clearly contemplates the renewal of any short-term visa.  Article 29 lays out the procedures by which the holder can apply for an extension and the only limitation being that the renewed visa cannot be for a longer length of time than the original visa.

Al Jazeera journalist, Melissa Chan, back when she could report from China

In fact, MOFA has renewed J-2 visas in similar situations.  For two years, Matt Sheehan was the Huffington Post’s China-based reporter, meaning that his J-2, short-term visa must have been renewed every six months.  Similarly, Melissa Chan had three J-2 visas, repeatedly renewed until the Chinese government refused to renew her visa for a fourth time.

MOFA had the authority to renew Rajagopalan’s J-2 visa, it just decided not to.  And Rajagopalan’s reporting on Xinjiang was the catalyst that has led to the current international attention to Xinjiang, including the United Nations’ Committee on the Elimination of Racial Discrimination’s public rebuke of the Chinese government’s practices in Xinjiang.  In July, the Congressional-Executive Commission on China (CECC) held a powerful hearing condemning China’s human rights violations in Xinjiang and calling for the use of the Magnitsky Act against officials involved with Xinjiang.

Going to market in the police state of Xinjiang

Every day there are more and more articles exposing the internment of millions and the efforts to eliminate the Uighur culture.  The international heat is on about the Chinese government’s human rights violations in Xinjiang.  And the Chinese government’s failure to renew Rajagopalan’s visa was not just retribution against her.  Likely it was intended as a teaching lesson to other journalists – report on this and we might fail to renew your visa too.  Fortunately, no one has taken the cue and powerful reporting continues.  What will be the test comes this December, when all resident foreign reporters go through the annual rite of renewing their press cards and J-1 visas.  On some level, Rajagopalan, with her short-term J-2 visa, was low-hanging fruit.  Will the Chinese government conveniently lose paper work of resident foreign journalists, forcing them to leave the country while they wait for their paperwork to be found?  Or will press cards be canceled?  Or even more terrifyingly, will the Chinese government completely close off all access to Xinjiang?

Make no mistake, Rajagopalan was only the start.  Xinjiang – and the Chinese government’s desire to eradicate a strong Uighur identity – is too important for the Chinese government not to ratchet up its game.

Book Review: Patriot Number One – American Dreams in Chinatown

When Zhuang Liehong arrived in America he anticipated a country that would open its arms to him and celebrate his arrival.  Only years before – in 2011 – Zhuang, then 28 years old, had been the darling of many a Western newspaper as he led the mass protests in his village of Wukan.  It was Zhuang who started the Wukan revolt, waking up fellow villagers to the illegal appropriation of local land with little to no compensation.  And it was these protests that would necessitate Zhuang’s exodus from China to the United States.

But as Lauren Hilgers portrays in her powerful, thought-provoking new book, Patriot Number One: American Dreams in Chinatown, America was anything but welcoming.  Instead, Zhuang, and his wife Little Yan, find themselves friendless, jobless and directionless in New York; their infant son left in Wukan with Zhuang’s parents.  The few contacts Zhuang has in New York don’t have the advice he needs to survive as an undocumented immigrant in Flushing, Queens.  As Hilgers recounts, Zhuang came to America believing that applying for asylum could easily be done with a simple application and some newspaper clips about his advocacy.  But Zhuang quickly learns that America’s immigration system is a bureaucratic nightmare; that this proud man whose name once was splashed on the pages of the New York Times, is nothing more than a number in America’s soul crushing asylum process.  It is Hilgers’ deft writing and keen observations that allow the reader to feel with Zhuang.  Yes, at times, he is arrogant, thinking that because of who he is, he will go to the front of the line.  But at the same time, the reader feels the disappointment that Zhuang must have felt when reality set in.

Hilgers goes back and forth between Zhuang’s old life in China – recounting the injustices that the Wukan villagers suffered as a result of their standing up to the government – and his new life in Flushing, effectively interweaving the two stories into one narrative.  But it is the second part of this narrative – the immigrant life – that currently resonates the most given the Trump Administration’s zero tolerance policy toward migrants fleeing violence in El Salvador, Nicaragua and Honduras.

The size of the crowds of the 2011 Wukan Protests Photo courtesy of the BBC

Hilgers doesn’t shy away from the fact that for Chinese immigrants, it is in many ways easier to obtain asylum than those currently coming from Central America.  U.S. immigration policy makes a distinction between state-sponsored violence and violence perpetrated by private actors, preferring the former.  For the Chinese, showing state-sponsored violence – the one child policy, discrimination against Christians, assault of human rights activists – is pretty easy in a one-party, Communist dictatorship.  In fact, as Hilgers documents, an asylum industry of sorts has emerged in Flushing: churches willing to give out attendance certificates to its members; Chinese immigrants who, unlike Zhuang, have never thought about democracy attend the weekly protests of the Chinese Democracy Party; and asylum lawyers that abound in Flushing, willing to tell their clients the “tricks” to get asylum, even after a 2012 raid by the U.S. Attorney for the Southern District of New York.

Zhuang Liehong in New York City. Still Protesting. Photo courtesy of Lianian Films.

But for the families coming from Central America, trying to obtain asylum is not as easy since the violence they are fleeing is perpetrated by criminal gangs, in other words, private actors. Even though these countries have weak governments, where crime is rarely prosecuted, that is not enough to show state-sponsored violence.  And in addition to Trump’s current zero tolerance policy, a policy that initially ripped children from their parents, and Jeff Sessions’ rescission of domestic violence and gang violence as a basis for asylum, Trump has also revoked the temporary protected status designation for El Salvadorian immigrants, a status that allows undocumented immigrants to remain in the United States.  By September 2019, 350,000 immigrants will be deported backed to El Salvador, one of the world’s most violent nations.  Somehow, under U.S. immigration policy, unspeakable acts of violence on little Latino children isn’t a grave enough atrocity. Hilgers doesn’t discuss this issue in her current book, but it is something that many readers might be thinking about given Zhuang struggles and the current struggles of the migrants desperately trying to find a safe place for their children. And, as Hilgers recounts in her analysis of the Chinese Exclusion Act of 1882, even with a complete ban, Chinese immigrants found a way to get into the United States.  As long as circumstances in the home country remain dire, people will continue to flee to a better place.  And that place has long been America.

Through Zhuang’s story and many of the other engaging characters Hilgers writes about – Little Yan, Karen, Tang Yuanjun – we get to see the insular, and lonely world, that is immigrant life in Flushing.  At times it is heartbreakingly sad and at times, down right funny.  But through it all, Hilgers brilliance as a writer shines through; every character she writes about, she completely humanizes.  These are not immigrants from a foreign country with a different culture; these are human beings that, like each of us, suffer life’s disappointments and, like each of us, find joy in life’s small accomplishments.  Given the times, it is important to be reminded of that and Patriot Number One is a must read.

Rating: ★★★★½

Patriot Number One: American Dreams in Chinatown, by Lauren Hilgers (Crown New York, 2018), 324 pages

The Tiananmen Square Sanctions – Needed Now More than Ever

The Protests on Tiananmen Square, Spring 1989

Twenty-nine years ago today, on June 4, 1989, the Chinese government ordered the unprovoked and brutal assault by the People’s Liberation Army on tens of thousands of unarmed civilians surrounding Tiananmen Square.  The exact number of people killed the night of June 3, 1989 into the early morning hours of June 4 is only known to the perpetrators of the massacre: the Chinese Communist Party (“CCP”). But whether it was a few hundred or a few thousand does not diminish the fact that peaceful protests were squashed with such a violent – and unnecessary – crackdown.

In the immediate aftermath, other countries had to figure out how to respond to a government that would massacre its own people.  In the United States, that response came from President George H.W. Bush who granted asylum to Chinese dissidents and ordered a plethora of sanctions against China, including suspension of U.S. foreign aid, arm sales, high-level government exchanges, export licenses for certain products and the linking of Most Favored Nation status to human rights. (see Congressional Research Services, China: Economic Sanctions (Aug. 22, 2016), pp. 1-3)  In the months that followed, Congress codified many of those sanctions including the suspension of export licenses for crime control and detection equipment. (see Public Law (“P.L.”) 101-246, § 902(a)(4))  Congress’ reasons for codifying these sanctions: the random arrest and detention of those suspected of participating in the Tiananmen Square protests (P.L. 101-246, § 901(a)(3)-(4)), continued surveillance on activists (P.L. 101-246, § 901(a)(5)), blocking foreign journalists from covering the events (P.L. 101-246, § 901(a)(7)), and continued and unlawful repression of human rights activists and activities (P.L. 101-246, § 901(a)(8)).

But as time progressed and the events of June 4, 1989 became a distant memory, many of the U.S.’ Tiananmen Square sanctions were waived or rendered obsolete. (China: Economic Sanctions, p. 3)  But one sanction that still remains in effect today is the suspension of export licenses to any U.S. company seeking to sell any equipment or instruments related to crime control and detection. (Id., pp. 3, 8; see also Office of the Chief Counsel, Bureau of Industry and Security of the U.S. Dep’t of Commerce, Legal Authority: Export Administration Regulations (Jan. 4, 2017) (“BIS Legal Authority”), Part III.7 (p. 106)).  Although the President can terminate the sanctions, he can only do so if he issues a report to Congress that provides one of two reasons – either that the Chinese government no longer perpetuates human rights violations or it is in the best interest of the United States to terminate the sanctions.  It does not appear that a U.S. president has ever issued such a report in regards to crime control sales, leaving the Tiananmen Square sanctions against of such equipment by U.S. companies to China very much in effect.

Chinese police with facial recognition sunglasses

As China uses technology more and more to suppress any form of spontaneous dissent and to constantly surveil its citizenry, the Tiananmen Square sanctions against the sale of crime control equipment to China seem particularly prescient.  But, unfortunately, the sanctions have rarely been enforced and U.S. companies skirt the sanctions with impunity.  In 2011, Cisco sold over 500,000 cameras to the city of Chongqing specifically to watch its citizens. Every year, U.S. technology and security companies enthusiastically market their goods at the China International Exhibition on Police Equipment, an annual trade show sponsored by the Ministry of Public Security.

And now it turns out that U.S. companies are actively participating in what can only be termed the most profound police state in human history: the mass surveillance, detention and abuse of Uighurs, a Muslim ethnic group in China’s western province of Xinjiang.  Cameras on every street are equipped with facial recognition; Uighurs are constantly stopped by police to check their social media accounts on their phones; over 500,000 Uighurs have been forced into detention without any trial, under the guise of “Political Education Centers;” iris scans and blood tests, in order to collect DNA, are randomly performed on Uighurs; the Han Chinese in Xinjiang are exempt from these abuses.

Unfortunately, U.S. company Thermo Fisher Scientific is one of the entities selling DNA technology to the Chinese Ministry of Public Security and various Public Security bureaus across China, including those in Xinjiang, according to a Human Rights Watch report.  Last month, the Congressional-Executive Commission on China (“CECC”) issued a letter to Wilbur Ross, the Secretary of Commerce, calling on him to investigate Thermo Fisher’s sales to China’s public security organs in light of the export sanctions and to report what other export licenses are being granted in violation of the law.  It does not appear that Secretary Ross has responded to the CECC’s inquiry, and if the history of the enforcement of the Tiananmen Square sanctions is any guide, he will not.

Chinese police in Xinjiang city of Kashgar

Many of the reasons for the passage of the Tiananmen Square sanctions almost 29 years ago – the repression of dissent, surveillance of peaceful protesters, the concealment of information, the violation of human rights – are very much alive and well in today’s China.  It is true that given China’s current status in the world, it will be much harder now to influence China’s domestic behavior than it was in 1989.  But that doesn’t mean that the United States should abandon its own laws, or the policies underlying those laws.  The government should not permit U.S companies to profit from the Chinese government’s creation of a Jim Crow society in Xinjiang.   To do so would be a disrespect to the many innocent lives lost 29 years ago today and to the valiant efforts of the U.S. government in the wake of the massacre to ensure that the U.S. does not play a role in human rights violations in China.

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