Evolvement of a highly competitive economic system?
The Social Credit System embodies China’s vision to create a highly effective and, at the same time, adaptive economy under political leadership. If implemented as planned, the system has the potential to become the most globally sophisticated and fine-tuned model for IT-backed and big data-enabled market regulation. It would deeply transform the Chinese economy and provide China’s policymakers with a tool to effectively and rapidly react to upcoming social and environmental challenges as well as to new technologies and industrial developments. China’s government will attempt to use the Social Credit System to channel investment into cutting-edge technologies and to steer companies into patterns of behavior useful in solving social and environmental problems. This could, in turn, accelerate leapfrogging processes, innovative business activities, and the Chinese society’s ability to quickly adapt to unforeseen changes. In this case, Western market economies, in comparison, would appear slow-moving and highly fragmented, with a weak capacity for implementation and lacking in long-term strategy. In the vision of China’s leadership, liberal market economies would ultimately not be able to compete with the Chinese unidirectional approach.
Yet China’s vision of comprehensively steering economic activities is very ambitious. The project will not necessarily be crowned with success. Given its limitations and weaknesses, the Social Credit System might just as easily result in a massive decline in investments, the failure of whole industries, low innovative power, and little entrepreneurial initiative. Whether or not the Chinese approach will prove to be better suited to the technological, social, and environmental challenges of the 21st century remains an open question. It is certain, however, that the Chinese leadership is fully committed to investing everything necessary in order for its mammoth Social Credit System project to succeed.