Now China did not come out and make this statement directly. However, a recent story from the Wall Street Journal equates to this as the Chinese government has declared a host of hundreds of new regulations on all foreign businesses, including the mandatory installation of AI cameras that send data to the Chinese government as part of a “corporate social credit” system to determine the “rating” of a company:
After five years, China is putting the finishing touches on a sweeping new system to punish and reward companies for their corporate behavior. But foreigners worry that, amid the continuing U.S.-China trade dispute, Beijing will use its new corporate “social credit” system as a weapon against international businesses.
While Beijing’s better-known plans for a social-credit system for individuals have stirred privacy concerns, a parallel effort to monitor corporate behavior would similarly consolidate data on credit ratings and other characteristics, collected by various central and local government agencies, into one central database, according to China’s State Council. The system is set to fully start next year.
An algorithm would then determine to what degree companies are complying with the country’s various laws and regulations. In some cases, companies could be punished by losing access to preferential policies or facing stricter levels of administrative punishment, a document from the State Administration for Market Regulation showed. Analysts said that other punishments could include denial of access to land purchases, certain loans and procurement bidding.
The imminent nationwide implementation of Beijing’s corporate social-credit system is unnerving foreign businesses, which have been bracing for further countermeasures from Beijing as the trade war continues to take unexpected twists and turns.
Beijing said in late May that it is drawing up a blacklist of entities it deems unreliable in apparent retaliation against Washington’s campaign targeting Chinese telecommunications giant Huawei Technologies Co.
“It makes the instruments of the social-credit system usable as a tool in the trade conflict,” said Björn Conrad, chief executive and co-founder of Sinolytics, a China-focused consulting firm that is publishing a report Wednesday on Beijing’s new social-credit system, together with the European Union Chamber of Commerce in China.
Mr. Conrad said some of the language used in recently released draft rules for a blacklist of heavily distrusted entities—which is a part of the corporate social-credit system—echoed the Beijing authorities’ warnings about their planned unreliable foreign-entities blacklist, suggesting that the two efforts are intertwined.
A company’s social credit could affect the individual credit score of the company’s key personnel and vice versa, according to the EU Chamber report—a point of particular concern for executives. A company’s social credit could also be influenced by the conduct of its suppliers, the report said, and getting removed from a blacklist could take years.
A separate report released Tuesday on the corporate social-credit system by Beijing-based consulting firm Trivium China, whose clients include foreign companies, doesn’t link it to the U.S.-China trade war but said the system “will provide the government with vast amounts of systematized data,” and warned about the possibility of Beijing “co-opting technology to enforce political orthodoxy.”
Beijing’s social-credit system is set to add to the complexities of doing business in China, a tantalizing but frustrating market.
The amount of data collected by authorities administering the corporate social-credit system would give them “a massive X-ray of the Chinese economic landscape,” said Jörg Wuttke, president of the EU Chamber in China. The chamber’s report said that a foreign company blacklisted by tax authorities in, say, Hubei province could find that information used by other government agencies in other provinces to punish the company.
While some analysts are hopeful that the system could also allow for more objective standards to be applied to foreign and domestic companies, the new regulations will likely mean higher compliance costs and more uncertainty for foreign businesses.
Some of China’s biggest and best-known corporate giants are deeply involved in the rollout of the new corporate social-credit system: Huawei, e-commerce and cloud services operator Alibaba Group Holding Ltd. and mobile services giant Tencent Holdings Ltd. are all named as members of a consortium developing one of the system’s key databases, according to a Chinese government procurement notice.
These companies, as well as the government agencies leading the implementation of the corporate social-credit system—the State Council, State Administration for Market Regulation, the National Development and Reform Commission and the Ministry of Commerce—didn’t immediately respond to requests for comments. China’s social-credit system has been under development since 2014, well before the U.S.-China trade war. The State Council published a blueprint for the program, which it said would “build sincerity” in economic, social and political activity.
Besides credit ratings, the system incorporates various blacklists of companies caught doing something illegal or undesirable, such as spreading information deemed inappropriate online or violating safety standards, according to the separate reports by Trivium and the EU Chamber. The system also includes lists of companies with great credit scores. Some of the credit information would be publicly accessible online. (source, source)
There is scarcely in modern times a better example of Chinese nationalistic stupidity masquerating as patriotism. I don’t say this to insult the Chinese, but to note that China has a very long history of making in the name of national pride decisions to “prove the Chineseness” of their people and those in China just at the time the nation actually begins to get real power. This is without exception each time her undoing, since it marks the phase where China begins to “cannibalize” herself and thus eviscerates her nation, leading to creating the conditions for a foreign invasion, which the Japanese and Mongolians historically and most graciously avail themselves of.
China relies of foreign people- mostly Americans and Europeans -buying their poorly-made products in order to keep her economy strong. She may hate the Americans, but she cannot at this point have an empire without taking her money. Japan feel exactly the same way, but the Japanese are instead moving closer to the US, a more strategic move that will allow her to take American resources and build up her supplies before removing herself, and thus making her a much more difficult enemy to fight.
Google has already moved to leave China and shift all her phone production to Vietnam. Other tech companies will do the same with other nations as well as heavy industry.
So who benefits? Vietnam, Korea, Japan, and even poorer nations such as the Philippines, Thailand, Cambodia, and Indonesia as well as India will take up the difference. This is not to “praise” the companies, or say that “they are making jobs” for those people, but to say that all of the major technology and heavy industry companies are ultimately in close relations with the US and the other governments in which they have their basis of power. Norsk Hydro is tied to the Norwegian government. Siemens, ThyssenKrupp and BASF are tied to the German government. Caterpillar, Dow, and DuPont are tied to the Americans. The list goes on, but all of these companies have some investment in China, and they can leave as they please.
Will the Chinese government “force” them to stay? If they do, then one may ask if the Chinese government wants a war, because it will quickly further the conditions for causing a major conflict. Indeed China does not want a war at the moment, but she is preparing for one, just as is the US and Japan. However, cutting off one’s sources of income at a time when one’s government needs income to continue war preparations is not a wise move, but one done out of stupidity or a deeply held sense of pride leading to the perversion of one’s own ability to make decisions.
This is likely why the US is not saying much at the moment about these new Chinese regulations. They are not a threat, but a blessing for the war hawks, since they just further the “justification” for inciting a hatred of China and a reason to go to war against them as well as closer ties with Japan, the rabid dog in a cage that America is preparing to let loose off her leash against China once again.