Surveillance systems: China VS. The West

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Leiden University, Crisis and Security Management

Master Thesis

Surveillance systems: China VS. The West

Name: Hendrik-Jan Boers Student Number: 1400967 Date: 2 February 2019 Word count: 24,127

First reader: Dr. S.D. Willmetts Second reader: Mr.drs. W.J.M. Aerdts

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1. Introduction

1.1 Introduction of the topic

This thesis will compare contemporary digital surveillance practices in the West and China. Since the introduction of the Internet in the nineties, techniques for digital surveillance have greatly improved. With the use of data there are seemingly endless possibilities for governments to monitor and even influence the behaviour of its citizens. This, however, also results in an increase in suspiciousness by citizens regarding what exactly it is the government knows about them and what the government does with their personal data it collects via these systems of digital surveillance.

Recently the focus on contemporary surveillance systems has increasingly been put on China. Several big western newspapers and other media platforms that are well known throughout the world have written articles about new digital surveillance methods that are being introduced in China. Ominous article headings like: ‘China’s intrusive, ubiquitous, scary surveillance technology’ (The Washington Post, 2017) and ‘China’s surveillance state should scare everyone’ (Mitchell & Diamond, 2018) make it seem that what is happening in China right now regarding digital surveillance is unprecedented. The introduction of China’s ‘Social Credit System’ in 2020, has even led to foreign politicians mentioning it in speeches. Vice President Mike Pence for example referred to it stating: “By 2020, China’s rulers aim to implement an Orwellian system premised on controlling virtually every facet of human life – the so-called “Social Credit Score.” In the words of that program’s official blueprint, it will “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step”” (Pence, 2018).

Although such newspaper article headings and statements make it seem like the digital surveillance systems being used in China are a new phenomenon in the world, Edward Snowden in 2013 showed that western governments also use digital surveillance methods to spy on its citizens. He leaked thousands of secret documents that revealed widespread and illegal surveillance being carried out by the governments of the US and other nations. In western societies such digital surveillance practices are controversial, and have elicited public scrutiny (BBC, 2013).

Snowden, who is a former employee of the US National Security Agency (NSA), revealed that the NSA created a program, called Prism, which gives the NSA direct access to

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the systems of Facebook, Google, Apple and other US Internet companies. The NSA therefore allows officials to collect data from a variety of sources, such as the content of e-mails, live chats, search history and live chats. What is remarkable is that the documents that support this claim also suggest that Prism is being run with the assistance of the companies that it has access to. All these companies, however, deny the knowledge of the Prism program (Greenwald & MacAskill, 2013).

The access of NSA to the systems of big US Internet companies was enabled by changes to a surveillance law that was introduced by President George W. Bush and renewed by President Barack Obama in December 2012. The program facilitates in depth-surveillance on stored information, as well as on live communications. It targets not only US citizens making use of the services of the participating companies, but also foreigners making use of these services outside the US. For communications that are being made within the US-borders, the NSA does not even need a warrant to collect this data. This means that the NSA is able to directly access the servers of US Internet companies (Greenwald & MacAskill, 2013).

Although this example shows how far western governments are willing to go in using digital surveillance methods, such practices are not only limited to public institutions. Private companies also make use of new data driven surveillance systems to monitor their consumers. With new technological developments the abilities of companies to track consumers become endless. In western societies well-known examples of companies that track data of its users are Google and Facebook. Both companies have also experienced criticism on the way they are using data to monitor users of their services.

In 2014 Google for example admitted that it scans e-mails that are being sent from persons without a Gmail account to persons with a Gmail account for, among other things, advertising purposes (Gibbs, 2014). In 2017 Google announced that it would stop scanning emails. However, media reports in 2018 state that Google still allows third party developers to use Gmail for integrating services into it, whereby these third parties have access to data from Gmail-accounts (Yurieff, 2018).

Facebook has also been criticised on the fact that their apps gather information about users. This information includes text messages that have been sent, as well as locations of the user. Facebook can even access photos stored on phones that have not been uploaded to Facebook. A company called Six4Three started a lawsuit over these allegations, stating that Facebook gathers this data for commercial purposes and sometimes even without consent of the user. Facebook admitted it collects calls and text messages from its users, but claims they only do this with prior consent (Cadwalladr & Graham-Harrison, 2018).

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The articles and speeches criticising China’s new surveillance systems often see the introduction of such surveillance systems as a logical consequence of the fact that China is an authoritarian regime with a one-party system (Carney, 2018). However, what western politicians and media outlets often forget to mention when criticizing China is that data surveillance is also being widely used in western societies and causing, as discussed in the previous paragraphs, unrest among its citizens. This thesis will investigate if Chinese contemporary surveillance practices have more in common with Western versions of such practices than generally thought. This thesis will therefore compare surveillance systems in China with surveillance systems in the West to find out if they truly differ in methods, scope, intention and effects. Given the significance and scope of the Social Credit System (SCS) in China, my analysis will focus upon systems that are part of, or related to SCS. This thesis will analyse two pairs of systems, in which each pair compares a Chinese and a western system. These systems are chosen because they are the most widely used systems that show the greatest resemblance in both countries, which makes the comparison between them easier and more reliable.

The first systems that will be compared are the Chinese Sesame Credit, which is run by the private company Ant Financial, with the United States FICO Score, which is run by the private company FICO. Both systems are the most widely used credit scoring systems in the country. In 2017 520 million persons used Sesame Credit, while 200 million US consumers had a FICO Score (Wei, 2017) & (Woolley, 2017). Although Sesame Credit is a social credit score, instead of a ‘regular’ credit score, a comparison is interesting whereas Sesame Credit is said to be based on the FICO Score, but with an added social aspect to it (Ohlberg et al., 2017).

The second pair of systems that will be compared are the Chinese court judgment list, which is run by China’s Supreme’s Peoples Court, with the US and Canadian no-fly lists, which are run by the US and Canadian authorities. China does not have ‘pure’ no-fly lists, as in lists that only block people from taking the plane, but people that are put on the court judgement list are banned from booking a range of things, such as flight tickets, train tickets and luxury hotel rooms (Chorzempa et al., 2018: 4). The court judgement list has also been introduced in light of the SCS, and is therefore suitable to compare with what comes closest to it in western countries, the US and Canadian no-fly lists.

The research question and sub-questions that will be listed in the next section will help in creating a clear scope for this thesis and serve as a guidance for the analytical chapters. Before the two analytical chapters the theoretical framework will give an overview of the

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literature that is available on this topic and explain some major concepts that have been discussed by scholars throughout the years on this topic. After the analysis the conclusion and discussion will focus on answering the research question by merging the results that have come forward from the two analytical chapters. A short summary will be given as well to create a clear and coherent overview of the research. The discussion will focus on possibilities for future research as well as the flaws of the research.

1.2 Research question and sub-questions

The research question that will be answered in this thesis is the following:

In what ways is the SCS and related surveillance systems in China similar or different to contemporary surveillance practices in the West?

This research question will be explored through a series of sub-questions: 1. What are the motives behind introducing surveillance systems? 2. How do these surveillance systems actually operate?

3. How intrusive are these surveillance systems?

4. What impact do the surveillance systems have on people’s lives?

5. Who are the critics of these surveillance systems, what is the substance of their critics, and how have they been addressed by the governments in China and the West?

1.3 Academic and societal relevance

This thesis has academic relevance because new forms of surveillance systems that are being introduced in China have not been examined thoroughly by Western scholars yet. Western media has been writing a lot of articles in which they criticize these Chinese systems. With the current literature that is available it is, however, difficult to find scientifically substantiated arguments to check if these Chinese systems of surveillance are really as bad as the media portrays. It is therefore fair to say there is a knowledge gap in the scientific literature on (new) digital surveillance systems in China and how they differ from the ones that we are used to in western society.

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A second reason that makes this topic academically relevant is that this thesis will compare Chinese systems of surveillance with western systems. Where China has been introducing most of such systems approximately the last five year, the West intensified the introduction of such systems after the 9/11 terrorist attacks. Because western countries have been earlier with the introduction of such systems there is also more literature written about these systems than the newer Chinese surveillance systems, let alone literature that compares these systems. A third reason why this topic is academically relevant is that new digital surveillance technologies that emerge in China will increasingly be used in other parts of the world as well (Romaniuk & Burgers, 2018). If these systems are not being researched by scholars this means that the knowledge of such system in the academic literature will not evolve, while such systems are of important influence on discourses and concepts like surveillance, social control and privacy.

Society has also taken a keen interest in the issues and programmes discussed in this thesis. China’s introduction of the mass surveillance systems has been a hot topic in the press and public debate for a number of years now. Press coverage of these systems have been overwhelmingly negative. However, comparable systems also exist in western societies. Whilst media scrutiny of surveillance practices in both China and the West has intensified in recent years, few have tried to compare them. Given the huge increase in the collection of citizens’ private data in both China and the West in recent years, it is important to be informed about what exactly these surveillance systems are, how they compare to other systems in the world and what the implications of them are. Although the Chinese systems might not be directly of influence to people living in Europe or Northern America, China’s growing influence might mean that in the future people from other continents also experience Chinese made systems.

The political systems of China and the West also differ. While in the West most countries have a democratic political system, this is not the case in China. In China the ‘Chinese Communist Party’ (CCP) rules the country in a one-party system. It is therefore also interesting to investigate the differences between surveillance systems, whereas being monitored in a democratic country in the West could have different consequences then being monitored in a one-party state. Chinese methods of surveillance might also have influence on foreigners that want to visit China for travelling, studying or even working, whereas these systems might be monitoring foreigners as well. It is therefore good to inform people that might want to visit or move to China about such systems, what implications they might have and how such systems differ from the systems that people are familiar with in western

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societies. Because the technological developments are going so fast it is important for scholars to keep investigating new systems of surveillance. This will help to inform governments, organizations, companies and citizens about what they can expect, as well as to create a fair judgement that is supported by scientific arguments about these, by the media criticized, surveillance systems in China.

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2. Theoretical framework

2.1 Introduction

In this chapter I will discuss some of the major scholarly debates and theoretical interventions that have influenced my thesis. The theoretical framework will be divided in two sections. The first section will discuss five different concepts as they are known in western society. The theoretical concepts that will be discussed are: panopticism, dataveillance, governmentality/governance, social sorting and information privacy.

The second chapter will discuss another three concepts. These concepts are, however, specifically explained from a Chinese angle of incidence. The concepts that will be explained are: Social control, privacy and governmentality. While discussing these concepts there will be a focus on how the long history of Chinese society has influenced these concepts to such an extent that they have a very different meaning in China compared to how western society explain these concepts. Discussing these concepts as they are known in China will help in the analytical chapters and conclusion to point out the differences between digital surveillance in China and the West and why such differences occur.

2.2 Concepts from a western perspective

2.2.1 Panopticism

This thesis focuses on digital surveillance systems that are increasingly being used to monitor citizens in western and Chinese societies. Examples of such methods of surveillance have been given in the introduction. To be able to get a better understanding of what surveillance actually entails the following section will discuss the concept of panopticism

Probably the most cited scholar in surveillance studies is Michel Foucault, who wrote the book Discipline and Punish. In this book he explains a concept called ‘panopticism’. Scholars that focus on surveillance often use this concept as a starting point for their research. The concept of panopticisim is based on an architectural plan of a prison designed by the utilitarian philosopher and social reformer Jeremy Bentham. In Bentham’s plan the Panopticon is a round prison with a watchtower at its centre. The cells surround the tower on the circumference of the circular building. Both the tower and the cells have windows, but the cells have sidewalls so that a person inside a cell cannot see persons in other cells. From the

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tower bright lights are shining on the cells. The supervisor in the central tower is therefore able to watch the persons in the cells, but at the same time the persons that are locked up in the cell cannot see the supervisor because of the strength of the lights that are being shed on him/her. The consequence is that the persons in the cells do not know whether or not they are being watched (Foucault, 1977: 200).

Let’s say the persons in the cells are convicts. Because they live in separated cells they, for example, cannot plot a collective escape or make plans for future crimes. Individuals that normally have the ability to merge together to form a crowd do not have such an option in the Panopticon. Therefore, the effect of the Panopticon is “to induce in the inmate a state of conscious and permanent visibility that assures the automatic functioning of power” (Foucault, 1977: 201). The Panopticon should create a situation of power that inmates are in, in which they bear this situation themselves (Foucault, 1977: 201). In such a situation there will be no need for centralised power to intervene and threaten the inmates into obedience, because they take responsibility for their own disciplining due to the institutional practices of regimentation that they experience. An inmate will become “the principle of his own subjection” (Foucault, 1977: 203).

Another thing that the Panopticon also does is the possibility of drawing up differences. If the cells would, for example, be filled with schoolchildren it would be possible to observe their performance. It would also be able to monitor their aptitudes, as well as their characters. In short, it is possible to sort the schoolchildren into different classifications, to create groups of schoolchildren that consist of different features. This can of course be done with other populations as well (Foucault, 1977: 203). In the end the idea is not that the architecture of the Panopticon is the most important aspect of the concept, but the fact that it leads to division rather than association and contagion. The most important aim of the Panopticon is self-regulation and self-control (Driver, 1985: 434).

Foucault (1977: 207) states that although the Panopticon has an enclosed nature, in theory everyone could visit it and enter the central tower to act as a supervisor. Visitors via this way can get a clear idea of how surveillance in a Panopticon is practiced. It is therefore impossible that the increase of power that is created by the Panopticon will lead to tyranny, whereas everyone in the world would be able to enter it to control what is going on in there. The building is transparent and the society can supervise the exercise of power that takes place there.

It is important to keep in mind that the Panopticon is a metaphor of a situation in which the mechanism of power is being reduced to its ideal form. It is therefore a theoretical

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concept that has to be detached from any specific use (Foucault, 1977: 205). Bringing the concept of panopticism in practice is nearly impossible. It is, however, the idea behind this ideal form of surveillance and the implications that this form of surveillance has that can be used to explain the concept of surveillance and why surveillance takes place in today’s world. Before the seventeenth and eighteenth century, sovereign rulers often ruled societies. The King ruled top-down, deploying his force to only a few others. The image of discipline in place during this time can be regarded as the discipline-blockade. This entailed an enclosed institution in which evil would be arrested, communication broken, and time suspended (Foucault, 1977: 208 – 209). Foucault, however, introduces another concept that opposes the ‘discipline-blockade’. This other concept, which is connected to panopticism, is called the discipline-mechanism. The discipline-mechanism is “a functional mechanism that must improve the exercise of power by making it lighter, more rapid, more effective, a design of subtle coercion for a society to come” (Foucault, 1977: 209). This form of generalised surveillance was created through a historical transformation. In the seventeenth and eighteenth century the discipline-mechanism was gradually extended throughout lots of different places in society. This new form of a society can be called the disciplinary society (Foucault, 1977: 209).

Although Foucault uses Bentham’s Panopticon as an ideal mechanism for executing power, he does not have the illusion that such a mechanism will ever be completely translated into reality. There will always be resistance to such mechanisms, whereas such power mechanisms are considered to be fragile and liable to reappraisal (Driver, 1985: 442). The idea of social control as introduced by Foucault’s panopticism has, however, led to the introduction of numerous systems that are devoted to monitoring and validating specific sides of citizens’ behaviour. Such systems exist in the public sector but there are also lots of private initiatives. This means people live in a society that monitors them and verifies conformity through a range of institutional activities (Lianos, 2003: 414). This thesis will discuss and compare systems of digital surveillance to monitor citizens. The concept of panopticism can be used to see to what extent these Chinese and western systems are similar to this ideal form as explained by Foucault, and in what ways they differ from it. Is the critique on China’s SCS by western politicians and journalists justified, or do the western systems that are in place also show signs of panopticism?

Lianos, rejects the idea that in the current conditions organisation is built on control. He states that whether citizens are subjects of control depends on the conditions that are being shaped in the interaction between the earlier mentioned governors and governed (Lianos,

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2003: 416). This interaction between the governors and governed will also be an important focus in this thesis. The introduction has shown how both in the West and in China the government is involved into digital surveillance practices. How these governments justify the use of such practices and how they deal with critics will therefore also be important in determining how different surveillance systems in China and the West actually are.

2.2.2 Dataveillance

The concept of surveillance as Foucault has explained it, using the Panopticon as a metaphor, dates back to the 1970s. Whereas this thesis focuses on contemporary surveillance systems it is necessary to also discuss a more modern concept that has evolved from the ‘traditional’ concept of surveillance. This concept is called ‘dataveillance’, which is a word that combines the words data and surveillance. What helped modern societies in increasing their surveillance was computerisation. With the help of computerisation, bureaucracies first were able to make existing systems more efficient and manageable. This helped to process larger quantities of personal data of citizens, leading to a more generalised surveillance that is called ‘dataveillance’ (Lyon, 2003a: 167). This new, digital form of surveillance can be described as ‘the use of technical means to extract or create personal data’ (Marx, 2004: 20).

Haggerty & Ericson state that if the famous philosopher and writer Rousseau would have lived in this reality of a hybrid world in which the ‘real/human world’ is combined with a ‘digital world’ he would have made the opening statement in his book The Social Contract as follows: ‘Humans are born free, and are immediately electronically monitored’ (Haggerty & Ericson, 2000: 611). In the advanced societies people are living in nowadays, supervision, monitoring, and record keeping, is carried out by an abundance of organisations. By such means these organisations try to control, influence and manage persons within these societies (Lyon, 2003a: 161).

The first person that came up with the concept of dataveillance is Roger Clarke. He describes the concept as ‘the systematic use of personal data systems in the investigation or monitoring of the actions or communications of one or more persons’ (Clarke, 1988: 499). When describing the benefits of dataveillance, he states that dataveillance can be beneficial for the physical security of people, but also financially, whereby it can prevent errors, abuse and fraud. Both in government and in the private sector benefits can occur through the use of dataveillance. For the private sector Clarke names the finance- and insurance sectors as an example (Clarke, 1988: 505). Despite the benefits Clarke also states that there are several dangers, such as that the quality of data is usually not very high and externally imposed

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controls on the data is very limited. Also, the chance of misinterpreting data is big when data that is collected is being used outside of its original context (Clarke, 1988: 506).

Clarke wrote his article on dataveillance in 1988. Since then a lot has changed regarding the use of dataveillance. An important concept that has been added to the discourse of surveillance in the digital age is big data. The IT research and consultancy company Gartner defines big data as: “High-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation” (Gartner, 2018).

Dataveillance in modern times has four categories of actions, with links to (big) data. The first one is recorded observation. This is gathering data by paying close attention to someone via, for example, watching or listening, and storing the data electronically. This kind of dataveillance plays an important role in modern day digital economies and increases the amount of data that’s being stored. Identification is the second category of action that defines dataveillance. Identification happens by analysing the unique features of someone or something. Big data uses identification to help organise great varieties of collected data and also to update new data that’s available of an object or subject (Esposti, 2014: 211). Analytic intervention is the third category of action, which relates to analysing ‘raw’ data to look for specific patterns and transform these into knowledge for people that have to make decisions on how to act based on these patterns. Therefore, analytic intervention connects big data with the creation of value. Behavioural manipulation is the fourth and last category. It focuses on influencing people’s actions intentionally. Organisations do this with help of assumptions or theories that explain what kind of initiatives organisations can take to obtain the behaviour that they desire. This category is a result of the previous category (analytical intervention), whereas analytical intervention leads to strategies and practices being used by organisations to manipulate behaviour (Esposti, 2014: 211 – 212).

The systems that will be discussed in this thesis use analytic intervention to analyse the data these systems collect. They might, however, also use this analytical intervention to manipulate behaviour. To what extent these systems manipulate behaviour says something about the influence of these systems on citizens. The idea of the SCS is ‘to link public and private data on financial and social behaviour across China, use the data to evaluate behaviour of individuals and organisations, and punish or reward them according to certain agreed upon standards of appropriate conduct’ (Chorzempa et al., 2018: 1). This clearly shows that the idea of the SCS is to manipulate behaviour. This thesis will check if this also happens in

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practice and how much manipulation of behaviour takes place compared to the western systems.

2.2.4 Governmentality and governance

Now that the concept of ‘traditional’ surveillance has been explained, as well as the ‘modern’ variety of surveillance, which is called dataveillance, this section will focus on explaining how the public sector and private sector use contemporary methods of surveillance. Although the traditional concept of surveillance assumes surveillance is mainly reserved for the government, the concept of dataveillance already focuses more on the application of surveillance by private actors. However, public and private surveillance can also be used in cooperation with each other. This section will therefore discuss another concept introduced by Foucault, called ‘governmentality’, which can be used to explain how and why public and private surveillance can be combined. This concept forms the basis of what Rose calls ‘governance’. Lyon links the concepts of governmentality and governance with contemporary surveillance. These explanations will therefore be used to compare the Chinese and Western systems on how public and private surveillance systems are interweaved with each other.

During his lectures at the Collège de France, Michel Foucault introduced the concept of governmentality. Because he did so during a lecture and in French, the text referred to in this thesis is from an English translation of the lecture, which has been published as a chapter in a book called ‘The Foucault Effect: Studies in Governmentality’. In this chapter Foucault explains the concept of governmentality by saying that looking at the history of the state (government), people have often looked upon the state as monster that rules over its citizens. However, the state can also be looked at as an authority that has certain functions in a society, but does not control every aspect in a society (Burchell et al., 1991: 103). Foucault supports this latter explanation of what the state entails and calls it governmentality. Foucault states that governmentality entails three different things (Burchell et al., 1991: 102 – 103):

1. Exercising a complex form of power, which targets populations, uses the political economy as its principal form of knowledge, and apparatuses of security as its essential technical means.

2. The steady change from different forms of power, such as sovereignty and discipline towards government. This results in the creation of specific governmental apparatuses and in the creation of a complex of knowledge

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3. The results of the process of governmentalization: transforming the state of justice into the administrative state

Governmentality is a combination of what is both internal and external to the state. The state constantly redefines what is within the competence of the state and what is not. This is why there is a distinction between public actors and private actors and not just one big state that is in control of all the production, services etc. in a country (Burchell et al., 1991: 103).

Nikolas Rose (1999: 15) also writes about governmentality but calls it governance. He argues that governance is a relationship between state and non-state actors. This means that state actors are not solely responsible for governing a state, but that this is a combination with other actors that do not form part of the formal or informal state apparatus. Lyon (2010: 9) uses the concept of governance as discussed by Rose to explain that surveillance is also not a concept solely implemented by public actors, but that especially digital surveillance methods used by private actors contribute to the concept of governance as explained by Rose. The commercial forms of surveillance are the most rapidly growing forms of surveillance, surpassing the public surveillance capacities in most nation-states (Lyon, 2003a: 172). Because Lyon relates governmentality to surveillance it is possible to use his idea in this thesis to check the applicability of it to the surveillance systems that are being compared. Can the connections between public and private actors as explained by Lyon also be found in practice in the systems that are compared? If there are connections between public and private actors, differences might be found between the surveillance systems in the West and in China. 2.2.5 Social sorting

Now that the concepts of surveillance and dataveillance have been explained, as well as why both public and private actors make use of digital methods of surveillance, the most important aspect of what digital surveillance in western and Chinese societies actually entails will now be discussed: social sorting. Abstract data of all kinds can be combined to create profiles and risk categories. When such practices are being carried out this can be called social sorting. In modern times social sorting has become automated with help of digital technologies. The criteria on which this social sorting happens is, however, often opaque to the public. This leads to the fear that large organisations can use this automated social sorting in a relatively unaccountable way, thereby directly affecting the lives of the people that have their data processed by such organisations. People might therefore be classified in a specific group because of factors such as where they live, as well as socio-demographic factors. In such

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cases of social sorting by, for example, insurance companies this might lead to people paying premiums that have no or little relation to other factors that might be of importance (Lyon, 2010: 24).

Car insurances premiums, for example, normally also take into consideration factors such as the type of car you drive, how often and how far you drive, as well as your driving record (State Farm, 2018). If they however give a greater importance to socio-demographic factors when deciding the height of someone’s premium, the height of the premium might, for a large part, be based on factors that do not have a direct link to the actual driver, but rather to generalised data. This marginalises the factors that are more directly of influence to the risk-profile that insurance companies create of their consumers. The factors that play a role in determining the Sesame Credit score and the FICO Score can be compared to check if they use fair factors to determine the score, so if social sorting takes place through factors that are directly relatable to what this social sorting is being used for or not.

Since the late 20th century and especially after 9/11 Western countries are focused on risk management via new digital systems. These systems are changing states from welfare states into ‘safety states’ (Lyon, 2007: 163). “New electronic infrastructures for risk management, deployed in the cause of security, often reflect particular priorities and long-term social, economic, and cultural divisions” (Lyon, 2007: 163). Such divisions can also be seen as also social sorting. This statement by Lyon can therefore be used to compare the US and Canadian no-fly lists with the Chinese court judgement blacklist to see if these systems also show such divisions, to what extent these divisions differ per system and what explains these differences.

2.2.6 (Information) privacy

Who owns and controls the personal information that is being generated through digital means? To ensure the privacy of personal information many countries have privacy laws in place. The difficulty with surveillance, however, is that it is sometimes unclear to what extent it is appropriate to sort out different populations with use of personal information (Lyon, 2003: 19). This section will therefore discuss the traditional concept of privacy, as well as the more modern concept of ‘information privacy’, which suits the scope of this thesis better. By doing so it will be possible to compare how the different systems discussed in this thesis take privacy into consideration. The introduction has shown that both the Chinese and western surveillance systems have created unrest among citizens regarding the privacy of persons that

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are registered in the systems. The concept of information privacy can be used in analysing which systems take privacy more seriously.

A traditional way to understand the concept of privacy is the ‘secrecy paradigm’. In this paradigm surveillance and the disclosure of concealed information invade the privacy of persons. This means that persons will feel embarrassed and start to censor themselves, whereas it can even damage someone’s reputation. Following this paradigm courts often decide that if information is not secret, it is also not private. In the current times we live in, in which personal information is saved in digital environments, it is almost impossible to hide this personal information. Living in total privacy has therefore become nearly impossible as well (Solove, 2004: 8).

The Invasion Conception says that invasive actions by actors that violate the privacy of persons will cause direct harm to these persons. This concept is based on an invader and an invaded. What is difficult about this traditional concept, however, is the fact that digital databases often do not directly injure the people which data is in that particular database. It is more like an indirect invasion, while people do not experience direct injuries when this data is being collected and transferred from for example company A to company B (Solove, 2004: 8).

The examples above show that traditional concepts of privacy are often not sufficient to explain privacy in the digital age. Although they do provide a good basis of what privacy actually entails, it appears to be difficult to incorporate them into the idea that privacy is not longer something that only refers to the privacy of a real person, but also refers to the privacy of its digital counterpart, or the data double as explained by Haggerty & Ericson (2000). A definition that fits the concept of information privacy better is the following: “The claim for individuals, groups or institutions to determine themselves when, how and to what extent information about themselves is communicated to others” (Westin, 1967: 337). This definition will be used to find out how the different systems discussed in this thesis in practice take into consideration information privacy.

2.3 Concepts from a Chinese perspective

The concepts discussed above are all based on the scientific articles written by western scholars. Concepts are theoretical explanations of certain ideas, but different societies, such as the Chinese society, might have different understandings and explanations of these concepts, as well as different effects when concepts are being put to practice. For this thesis the assumption is made that people reading it are people from western societies. How some of the

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concepts are understood in China as well as practically implemented, will be different in China than in the West. This section will focus on these differences, which can be used in the analytical chapters to give ‘alternative’ explanations on how and why surveillance in China works differently than surveillance in the West. The concepts that will be discussed in this section are the Chinese understanding of the concepts of social control, privacy and governmentality/governance.

2.3.1 Social control

Societies develop formal and informal ways that make people within such a society conform to the prevalent social norms. When a person is forced to act in a way that is according to the values of the society he/she lives in, even though this behaviour might not be in this person’s own interest, this is called social control. Different societies have different forms of social control (Chen, 2002: 46). If China is compared to the West, a couple of clear differences can be put forward. Chinese philosopher Confucius, who lived around 500 years B.C., has been of great importance in shaping Chinese culture and society. Confucius stressed the importance of social order, which can be derived from right conduct. Societies should be divided in hierarchical order, which means graded relationships exist. Children should respect their parents; students should respect the professor etc. Confucius places an emphasis on that obligations in a society are of greater importance than the rights or privileges of persons. These obligations should not be enforced by formal laws, but by social control through informal social processes. This is a proactive system that uses powerful forces of internal social control and that encourages strong pressure from the community (Rojek, 1989: 142 – 143).

2.3.2 Privacy

Chinese society does not know individual privacy like western societies do. Intrusion in someone’s private life is allowed and actually even encouraged, whereas the protection of the social order is more important than the individual rights of a person. Social collectivity in this regard can be seen as the foundation of Chinese society, whereby personal freedom is subordinate to this overarching goal (Rojek, 1989: 143 – 144). In China, if an individual misbehaves this is seen as being caused by society, but society is also the victim of such misbehaviour. If other persons interfere in the life of a person that misbehaves this is seen as a sign of care instead of meddling. It is believed that if society as a whole participates in reforming offenders, this will accelerate the socialisation of offenders (Chen, 2002: 58).

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In China the practice of labelling takes place to create model citizens, as well as deviant citizens. In practice, someone that is being labelled as being deviant in China will be removed from his/her normal role in society and can be subject to negative reactions. By removing a deviant person from its normal role in society they expect the person to feel ashamed, as well that he/she did something wrong or has problems that need to be solved, which eventually will motivate this person to rehabilitate himself/herself (Chen, 2002: 55 - 56). A deviant person will be negatively labelled, but a model citizen will be positively labelled. If someone is being positively labelled and therefore is seen as a model citizen, this is the best form of reward someone can get as a Chinese citizen (Munro, 1973: 126).

These Chinese explanations of the concepts of social control and privacy can be used to check to what extent the practices of the Chinese systems of surveillance that are being discussed in this thesis appear to be related to the explanation of these concepts. Is privacy really of less importance in the Chinese systems compared to the western systems? And does the ‘community’ has any influence on people with a low Sesame Credit score or on people that have been put on the court judgement blacklist? Do such people get a label of being deviant by society and if yes, does this motivate the person to improve his/her score or get of the blacklist? Or are it especially the practical implications that make people take action to improve their score or get off the blacklist?

2.3.3 Governmentality and governance

The last concept that will be discussed is the Chinese view on governmentality. Foucault introduced the concept of governmentality in his lectures by using the historical context of western societies. The scholars Elaine Jeffreys and Gary Sigly, however, have written an article that tries to fit the concept of governmentality into a non-liberal context, thereby using China as their case study. They state that from a liberal perspective, in which liberal is regarded as being a western concept, there is scepticism about the possibilities of knowing objects that are governed in detail as well influencing these objects. In China however, especially after the CCP in 1949 created the nation state of China as we know it today, there have been claims that it is possible to know the objects that have to be governed, as well as predict what happens when these objects are being influenced (Jeffreys & Sigly, 2009: 12).

This idea of an omniscient government has changed with the opening up of the Chinese economy to the rest of the world. Because China is nowadays a so-called socialist market economy, this also means that the role of the government in Chinese society is changing (Jeffreys & Sigly, 2009: 16). While in the western context a change to a market

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economy would mean a retreat of the state, in the Chinese context this is not the case. The role of the state in China is changing, but not diminishing. During the Mao-era the economy was centrally planned, which compartmentalised the economy and society into various areas. The introduction of competitive mechanisms, however, allowed persons to become entrepreneurs, which means private actors now got a chance in the Chinese economy as well (Jeffreys & Sigly, 2009: 19).

Governmentality and governance, two concepts that have been explained from a western perspective in previous sections, also exist in China. In China these concepts are distinguished from the concept of government. Governmentality/governance is the relationship in society between the government, companies and communities, while the concept of government refers to only the actual government, the CCP Party-state apparatus, and nothing else. The difference becomes clear when looking at the operation of power. The government exercises power top-down, while governance exercises power from bottom-up, as well as top-down (Jeffreys & Sigly, 2009: 21).

What is essential to remember discussing these concepts is that from a Chinese point of view, although the role and functioning of the government might be subject to change, the importance of the CCP will not be questioned. The CCP has been the ruling Party in China for almost 70 years now, and is the only legitimate Party that can do so. 70 million party members are continuously trained, disciplined and strengthened to ensure the survival of the CCP in the future as well (Jeffreys & Sigly, 2009: 24).

While both the western and Chinese explanations of governmentality/governance do not differ that much in its essence, it is clear that in the Chinese understanding of it, the role of the government remains larger than in the western concept of governmentality/governance. By comparing the private systems of Sesame Credit and the FICO Score with each other it should therefore be possible to explore if this is also true in practice.

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3. Methodology & Operationalization

This research will be a deductive research. This means that existing theories will be used to create a theoretical framework that explains concepts that are crucial to understand in order to answer the research question:

In what ways is the SCS and related surveillance systems in China similar or different to contemporary surveillance practices in the West?

This research question is a descriptive research question. The sub-questions, as listed in the introduction, will be used to give the thesis an analytical focus. The theoretical framework will also be used to help analyse the four cases that are already briefly discussed in the introduction and that form the basis of this research. These four cases are combined in pairs of two and these pairs will be analysed independent of each other. In both pairs, a Chinese surveillance system is compared to a western surveillance system. The first pair that will be compared is the Chinese Sesame Credit and the US FICO Score. The second pair is the Chinese court judgement list and the US/Canadian no-fly lists.

These systems have been chosen for comparison because, as explained in the introduction, they come the closest to being each other’s counterparts. The design of Sesame Credit has reportedly been influenced by the FICO Score (Ohlberg et al., 2017: 12) and China’s court judgement list bans people from taking the airplane, just like the US no-fly list also does. China’s court judgement list does have a broader scope, whereas it also bans people from taking trains or booking hotel rooms (Yuan, 2017).

This thesis is a qualitative research, making using of qualitative document analysis to answer the research question and sub-questions. The documents that will be analysed can be classified in the following categories:

1. Newspaper articles that discuss digital surveillance systems used in the West and/or China.

2. Information on websites from public institutions that run specific surveillance systems.

3. Reports written by independent research institutes on digital surveillance in the West and/or China.

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4. Academic papers written by scholars focusing on digital surveillance in the West and/or China.

Whereas the use of digital surveillance systems has taken a leap forward since the introduction of the Internet on a large scale in the nineties, most of the documents that will be analysed are not more than twenty years old. Because the Chinese government has introduced its plan for a Social Credit System in 2014, most documents that focus on surveillance systems in China will be from 2014 on. Western systems are, however, considerably older, in which the attacks of 9/11 is often regarded as the start of a new chapter in surveillance laws, practises and technologies (Liptak, 2011).

To ensure internal validity, a combination of the four different categories of documents listed above will be used. When, for example, using newspapers articles in the analysis, a combination of articles from different newspapers will be used, which increases the internal validity. When possible, primary sources will be used as much as possible. Ensuring external validity will be harder, whereas it is difficult to generalise the results to other situations. The surveillance systems that will be compared in the analysis are so specific that they are unique in their sort, making it difficult to generalise results to other situations.

A disclaimer has to be made before moving on to the next chapters. All sources being used in this thesis are either originally written in English or translated from Chinese into English. Therefore, for important Chinese documents, such as policy documents, English translations will be searched for to get an understanding of how the Chinese government reasons their thoughts and actions. Translated sources might, however, not exactly convey the same message as the original source does. This is important to take into consideration, whereas the different understanding of translated documents might have biased the scholars and journalists that have written newspaper- or scientific articles that are being used to compare and discuss the Chinese surveillance systems in this thesis.

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4. China’s Social Credit System

Before moving on to the two analytical chapters it is important to know why digital surveillance in China is such a popular topic to discuss in the western media. What Sesame Credit and the court judgement list entail is related to the SCS and cannot be understood before discussing the SCS in more detail. This chapter will therefore explain what China’s Social Credit System actually is and what it does. The most important misunderstanding is that the SCS is one big system that is run by the government. This is not true, whereas there are also numerous private companies that have created digital surveillance systems, such as Sesame Credit, which are sometimes unjustly seen as being run by the government.

China is struggling in ensuring effective legal enforcement, implementation and compliance. Enforcement of the law is problematic in areas such as for example intellectual property, environmental protection and food safety (Creemers, 2017: 1). Several scandals have occurred in the last decades, which resulted in an erosion in the trust of Chinese citizens in the integrity of the government’s actions (Chorzempa et al., 2018: 1). People blame the government for not being able to enforce the law, so that the quality of products and services produced in China can be guaranteed.

A well-known scandal was the milk powder scandal of 2008. An estimated 300,000 babies in China got ill due to drinking baby milk contaminated with melamine. 54,000 had to undergo treatment in hospitals for urinary problems that occurred after drinking the contaminated milk and six babies died from kidney stones (Branigan, 2008). Another, more recent scandal occurred in the summer of 2018. A Chinese company producing DPT vaccines was found to have produced inferior vaccines. This means that the vaccines were ineffective and therefore do not protect the vaccinated children from illnesses such as tetanus, diphtheria and whooping cough (Leng & Huang, 2018).

After decades of scandals the low trust of Chinese citizens in public institutions has motivated the Chinese government to increase the trust of its citizens in these public institutions. In 2014 the Chinese government therefore came with a plan to create a Social Credit System (SCS). The idea of this system is to create a comprehensive scoring system that not only focuses on the financial situation of the actors that get a score, such as happens with ‘traditional’ credit scoring, but also on other areas of government regulation such as for example corruption and environmental protection. This SCS will not only focus on increasing the trust in government, but also in increasing the trust of citizens in each other and in private

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companies. Data collected by public and private actors will be combined to monitor behaviour of individuals and organisations. Certain agreed standards of appropriate conduct will be used to punish or reward these individuals and organisations (Chorzempa et al., 2018: 1). “The SCS is framed as a set of mechanisms providing rewards or punishments as feedback to actors, based not just on the lawfulness, but also the morality of their actions, covering economic, social and political conduct” (Creemers, 2017: 2). The SCS thus covers all aspects of China’s society. Every Chinese citizen, company and public institution will have to deal with it. The idea is that the system should be completely up and running in 2020 (Creemers, 2017: 3).

Other countries have had credit scoring systems for a long time. Such systems are usually financial credit scoring systems, without any social aspect incorporated in the scoring mechanism. An example is the FICO Score in the United States, which will be discussed in one of the analytical chapters. In China, systems of (financial) credit scoring were, however, missing. Until recently most consumers used cash to pay and it was difficult to get a credit card at a bank different than your own (Hvistendal, 2017). The Chinese government wants to promote lending to its citizens, but this can only happen when the government knows which people are creditworthy (Clover, 2016).

Because China’s economy started to grow, the amount of people having access to Internet increased rapidly. By the end of 2017, 772 million Chinese citizens were connected to the Internet (Xiaoming, 2018). This gives China’s government better opportunities to collect information on its citizens to create reliable credit ratings, which helps to decide if people can get a loan or not. The Chinese government, however, not only uses this information to determine the creditworthiness of a person. As discussed earlier it takes the traditional idea of credit scoring to another level, adding an extensive social part to it. This entails that Chinese citizens create incentives for each other to act in such a way that no direct intervention of the government is needed anymore (Creemers, 2017: 8). This is the reason why the Chinese government talks about a social credit system, instead of ‘just’ a credit system.

Upon its introduction, the SCS will have two components. The first component will be the creation of a dataset that combines public and private data. This database will have data on individuals, but will also have data on legal entities, like businesses and government institutions. The second component is to use this data to influence the behaviour of people and organisations that are subject to the SCS. Despite the fact that newspapers have been writing a lot about this, suggesting that every individual will get an overall credit score, this is nowhere

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mentioned in the official government documents. It could, however, be generated when different systems of data collection are combined with each other (Chorzempa et al., 2018: 2). Articles published by the Chinese media have stated that the construction of a SCS should be a warning for individuals and companies that the serious violation of social ethics will be regarded as an offense, even if the ‘offense’ is not breaking any existing law or regulation (Xinzhong, 2018). This means that the government can act outside of the existing laws to decide if someone has violated the social ethics, thereby enabling arbitrary influence of the social credit score of someone. This information, as well as the information that has been given in the other paragraphs of this chapter is important to keep in mind while reading the analytical chapters, whereas it helps to understand the thoughts behind Sesame Credit and the court judgement list better.

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5. Analytical chapter one: Sesame Credit vs. FICO Score

5.1 Introduction

This chapter will compare the Chinese Sesame Credit with the FICO Score from the United States. As discussed in the introduction, these systems are the most widely used credit scoring systems in China and the US. Sesame Credit is based on the FICO Score, but adds a social aspect to the ‘traditional’ way of credit scoring, which is still being used by the FICO Score. Sesame Credit has been under a lot of (western) media attention recently, which state that Sesame Credit is part of the intrusive SCS that combines several surveillance systems together to create a dystopian society (Mitchell & Diamond, 2018). Comparing both systems will help to show the differences between them and what the reasons for these differences are. It will be interesting to see if Sesame Credit is as intrusive as is claimed by some and, if this is the case, it explains the differences with the FICO Score. First a description of both systems will be given, followed by a comparison of the similarities and differences of the systems, as well as the government involvement and the critics that exist on both systems

5.2 Sesame Credit

The Chinese government has not only introduced pilots of contemporary surveillance systems themselves. In 2015 they licensed several Chinese companies to start up pilots with their own social credit systems. The most famous example of this is Sesame Credit, a system that was developed by an affiliate of Chinese Internet-giant Alibaba, called Ant Financial Group (Creemers, 2017: 22). In a statement published on the website of Alibaba at the day Sesame Credit was introduced, several examples of its application are given. People with a good credit score can, for example, rent a car without paying a deposit; employers can check credit scores of applicants to make more informed choices of who to hire, and credit scores can even be used for online dating applications so that people can choose someone with a credit score that fits their expectations. Sesame Credit can collect data from 300 million real-name users and another 37 million small businesses that are registered with Alibaba. Sesame Credit even obtains more data by working together with financial institutions, public agencies and different types of merchants to increase the effectiveness of the credit scores for consumers (Alibaba Group, 2015).

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Sesame Credit works with a scoring system. The users’ creditworthiness is indicated with a score somewhere between 350 and 950 points. To check your own score, you have to open the app of Ant Financial and click on the Sesame Credit icon. It then shows you the score you have, which is updated on a monthly basis (Hvistendahl, 2017). Five different factors are used to calculate the score. They each have different weights, but the exact weights are unknown. The five categories are (Alibaba Group, 2015):

1. Credit History: The payment history of a user, such as credit card payments and utility bill payments.

2. Behaviour and Preference: The online behaviour of users, such as the categories of products they shop for.

3. Fulfilment Capacity: The ability of a user to fulfil his/her contractual obligations. Indicators that are used for this category are the use of financial products and services and the balance of users’ Alipay account.

4. Personal Characteristics: The examination of the accuracy and extent of personal information, such as the home address of users and length of time of residence, as well as phone numbers.

5. Interpersonal Relationships: The online characteristics of a user’s friends and the interaction between both.

Alibaba has given some examples in their statement discussed above about the fields in which it operates. Since the introduction in 2015 Sesame Credit has expanded to lots of other fields as well. In a hospital in Shanghai it is for example possible to get a 1000 RMB credit if your Sesame Credit score is higher than 650. By doing this the hospital is trying to reduce its waiting times by 60% (Rollet, 2018). Playing video games can also lower your score. To be able to play the popular shooting game Counter Strike Global Offensive people must register with both their national ID and Sesame Credit score. When someone is caught cheating, this person will get a lower credit score. This might have an effect on for example someone’s future ability to borrow money (Gong, 2017). At Beijing International Airport it is possible for people using Sesame Credit and who have a score higher than 750 to make use of the fast security screening that is present at the airport (Clover, 2016).

These three examples show how Sesame Credit as a private system is not only linked to other private companies, such as getting a discount at a car rental when having a good score, but is also linked to the public sector. The Shanghai hospital that offers a 1000 RMB credit if

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your Sesame Credit score is higher than 650 is, for example, owned by the Chinese Ministry of Health (HWMC, 2006). The agreements between Ant Financial and the hospital in Shanghai are therefore agreements between a private and public actor.

An important concern of Sesame Credit is to what extent private companies will be forced to share data with the Chinese government, and therefore with the CCP as well. The example of Sesame Credit already shows the connection between private initiatives and the government. However, most data that is used in the government led pilots is generated by the government itself and data that is collected by private actors is only used in a narrow scope (Creemers, 2017: 27). Chapter 5.5 will examine the influence of the Chinese and US governments on Sesame Credit and the FICO Score more thoroughly.

5.3 FICO Score

A well-known example of a credit scoring system in the United States is the FICO-Score. The FICO-Score “Helps lenders make accurate, reliable and fast credit risks decisions across the customer’s lifecycle. The credit risk score rank-orders consumers by how likely they are to pay their credit as agreed. The most widely used broad-based risk score, the FICO Score, plays a critical role in billions of decisions each year” (FICO, 2018). The company discusses the benefits of the FICO Score on their website. The score is regularly updated so that it provides a good view of how consumers repay their credit obligations. The score includes accounts that consumers might have by other lenders. The score also has a highly predictive risk measure for the applicant as well as the customer. Lenders are therefore able to make a good judgement on which consumers they want to target, if they should raise a credit line or not and how much credit they should extend to specific consumers.

A FICO Score is generated with the help of multiple scorecards. This means that risks are calculated per different segment, so each segment has its own scorecard. An example of a specific segment is consumers with serious delinquencies (FICO, 2018). A FICO Score has a range of 300 – 850 points. A high score means a low risk; a low score means a high risk. Every lender has its own strategy, so they decide themselves if they think it is responsible to give a consumer a credit product or not. There is not something like a specific score that all lenders use as a boundary to decide whether or not someone is granted a credit (My FICO, 2018b).

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1. Payment history (35%): This is the most important category in calculating the score and checks if someone has paid past credit accounts on time. Lenders can use this information to examine the risk they will take when extending credit to a costumer. 2. Amounts owned (30%): Someone that uses a lot of credit that is made available to

him/her may indicate overextension. This might lead to banks interpreting that a consumer has a higher risk of defaulting.

3. Length of credit history (15%): In general, someone with a longer credit history will get a higher FICO Score. This category takes into account how old someone’s credit accounts are, looking both at your oldest and newest account, as well as the average age of all your accounts. What also is checked is the last time since you last made use of your account.

4. Credit mix (10%): This category will investigate someone’s mix of credit cards, finance company accounts, retail accounts, mortgage loans etc.

5. New credit (10%): This category checks the amount of new credit accounts that a consumer opens. Opening a lot of credit accounts in a short period of time can lead to a lower FICO Score, whereas this represents a greater risk.

The different categories discussed above show that a lot of information is used to create a FICO Score. The FICO Score, however, also clearly indicates which information is not used. Personal information, such as someone’s name, address and date of birth is used to identify people with a FICO score. This personal information is however not used to determine the credit score of a consumer (My FICO, 2018c).

5.4 Comparing both systems

In this section both systems will be compared with each other. Both systems share the similarity that their scores are based on five different categories, with some categories weighting heavier than other categories. The weight distribution for Sesame Credit is, however, not known, but the scoring system of the FICO Score has been used as an inspiration for Sesame Credit (Ohlberg et al., 2017: 12). The most important difference between both systems is the fact that the Sesame Credit includes a social aspect, giving people that make use of it and that get a good score a variety of opportunities to use this score to their advantage in daily life. The FICO Score only focuses on people that want to get a credit, so

Surveillance systems: China VS. The West

Leiden University, Crisis and Security Management

Master Thesis