China harnesses big data to buttress the power of the state

James Kynge in the Financial Times: “…Over the period of “reform and opening” since the late 1970s, China has generally sought to “bide its time and hide its strength”. But no longer. At the congress, Xi Jinping, the president, presented “socialism with Chinese characteristics” as a “a new choice” for developing nations to follow. But what lends heft to this globalist intent are technological advances that are already invigorating the Chinese economy and may also help to address some of the historic failings of the country’s polity.

The data revolution is fusing with China’s party-state to create a potential “techno-tatorship”; a hybrid strain in which rigid political control can coexist with ample free-market flexibility….

First of all, he said, the big ecommerce companies, such as Alibaba, Tencent and, are obliged to share their data with central authorities such as the People’s Bank of China (PBoC), the central bank. Then the PBoC shares the data with about 50 state-owned banks, creating a database that covers about 400m people, detailing their payment history, creditworthiness and even networks of social contacts, the official said.

“We have already seen that the number of bad debts being built up by households has come down sharply since we launched this system,” said the official. “People really care about their credit scores because those with bad scores have reduced access to financial services.”…
To be sure, data-centric approaches to governance can have shortcomings. The data can be ignored or manipulated by humans, or privileged institutions can lobby for special treatment using old fashioned political leverage. But some Chinese see a big opportunity. Economists Wang Binbin and Li Xiaoyan argue in a paper that the marriage of big data and central planning creates a potent new hybrid….(More)”.