Social Control in the Digital Transformation of Society: A Case Study of the Chinese Social Credit System

Abstract

The Chinese social credit system (SCS) is a digital sociotechnical credit system that rewards and sanctions the economic and social behaviors of individuals and companies. This article uses classic social-control theories—the shaming theory and the labeling theory—to analyze the SCS, thereby contributing to a better understanding of the Chinese social-control approach to the digital transformation of society. Our research relies not only on government documents and media reports, but also on first-hand data collected from in-depth interviews conducted in China. We found that the perceived effectiveness of the shaming and labeling mechanisms is enhanced by the design of the SCS framework and the assistance of digital technology but weakened by a lack of transparency and questionable justification criteria, as well as privacy and fairness concerns.

1. Introduction

Social control refers to “the capacity of a society to regulate itself according to desired principles and values” (Janowitz 1975, p. 82). It manifests in various forms, including both formal and informal measures that a society has developed to respond to nonconformity (Wilson 1977). To some degree, all governments use the power of social control to attain conformity and prevent deviance from certain values. However, Western countries and China offer different approaches to social control on the basis of their different cultures and traditions (Chen 2002). The Western approach is law-dominated and calls for a strong reliance on formal law (Li 1973). In contrast, China has lacked a formalized legal system for more than two thousand years, and the law that existed historically centered more on the protection of social and political order (Leng and Chiu 1985). As such, the Chinese approach is regarded as relying largely on informal social processes and as having “a natural aversion to formal law” (Rojek 1989, p. 143). The past decades have seen a movement towards the increased use of formal social controls in China. Nevertheless, China retains its distinct features in terms of the approaches employed in social control (Jiang and Lambert 2009; Jiang et al. 2010).

Social control continues to evolve with scientific progress. In the words of Gary Marx, “(t)he engineering of social control is one of the defining characteristics of modern society” (Marx 1995, p. 117). In particular, there has been a global trend of expanding the use of science and technology for purposes of social control since the events of 11 September 2001, and the war on terror. This trend is further facilitated by the rapid development of digital technologies, such as artificial intelligence, big data and machine learning, which are increasingly used to influence behavior in not only commercial but also public sectors, contributing to the digital transformation of society (e.g., the role of digital technology in the recent COVID-19 pandemic; see Horgan et al. 2020; Makarychev and Wishnick 2022). Despite concerns about surveillance and privacy (Kim 2004; Lyon 2003), all societies, regardless of their social-control features, are catching up with this trend. At the same time, the dark side of digital tools, when used in social control, is widely recognized. As such, the advances in employing digital technologies raise democratic challenges regarding mass surveillance, as well as privacy questions (Gandy 1989; Martínez-Béjar and Brändle 2018; Norris and Armstrong 2020) that need to be carefully evaluated.

Nowadays, China is being considered as a forerunner in the application of digital technology in social control (Głowacka et al. 2021). The Chinese social credit system (SCS or 社会信用体系), which was established in 2014, represents a good example in this regard. The system is designed and implemented, with the assistance of digital technology, as an innovative system to improve trustworthiness in society and to enhance the enforcement of laws and regulations (State Council 2014). Specifically, blacklists (黑名单) constitute a central building block of the SCS (C. Liu 2019; Wang 2017), and blacklisted persons are regarded as “discredited”. The SCS is thus regarded as a new form of governance that changes the essence of the political role of the state (Orgad and Reijers 2021). In this context, the system offers an interesting case for research about Chinese social control in the digital transformation of society.

In this study, we analyze the Chinese social-control approach in the digital era through the lens of the SCS. Based on theories of shaming punishments and labeling, we designed an interview protocol used for a study of Chinese residents. Our goal is to understand the impact and problems brought by the SCS from the perspective of public understanding, with a special focus on the public shaming and labeling mechanisms the system employs. Drawing on the interview data and the relevant theories, we investigate the power relationships in the SCS, which concern the relationship between the authority and the residents, and the role of authorities in the shaming and social structuring of the “Lao Lai” identity.1 Although our analysis is based on the SCS, as the system becomes increasingly influential, with a similar trend being observed in Western economies (Roth 2021), the findings of our research study will also be helpful to understand other/future data-driven systems used for social control, thus more generally contributing to the knowledge of social control in digitally transformed societies.

2. Current State of the SCS

Following the release of the Planning Outline for the Construction of a Social Credit System (2014-2020), the construction and implementation of the SCS have made substantial progress. Until now, however, there is not (yet) a unified SCS framework nationwide. The system consists of two main branches. The commercial branch refers to the corporate credit reporting system and the consumer credit reporting system run by private companies (see, e.g., Chen et al. 2021; Chen and Grossklags 2020). This paper centers on the second main branch—the government-run SCS—which is characterized by blacklists implemented at both national and local levels (Engelmann et al. 2021). Public disclosure of records for non-complying individuals and organizations on various types of blacklists is a key aspect of the system (Creemers 2018). The SCS blacklists share some similarities with reputational tools, such as company rankings or background checks on individuals in Western economies, but are fundamentally different in at least two perspectives.

First, with the assistance of digital technology, SCS blacklists cover a much wider range of the social and business activities of individuals (natural persons), companies and social organizations. They usually contain both personal information (e.g., name, gender, age and partially anonymized ID number) and descriptions of the non-complying behavior of individuals, companies and organizations. They are published both online and offline, and are made publicly accessible for the purpose of public shaming. There are many different types of blacklists targeting behaviors in various fields,2 among which the most well-known is the List of Dishonest Persons Subject to Enforcement (失信被执行人名单), which is issued by Chinese courts at different levels and constitutes a dominant share of all different types of misbehavior records (Engelmann et al. 2019). Between 2013 and 2020, 15.78 million individuals were blacklisted as “discredited” and were thus referred to as “Lao Lai”; in addition, in 2020 alone, the number increased by 2.498 million3. We focus on this type of list as a key example of the SCS blacklists in our analysis.

Second, the SCS not only provides ratings, e.g., with the blacklist records being a format of shaming, but also material punishments. Natural and legal persons on the SCS blacklists are subject to punishment in a wide range of fields, a practice referred to as “joint punishment”. Joint punishments rest on various Memorandum of Understanding (MoU) documents signed among different governmental bodies which agree to offer punishment to the blacklisted in their own areas. There are currently, altogether, 51 MoUs covering most perspectives of social and economic life. The most frequently reported example is that “discredited” individuals who have failed to repay debt are restrained from taking flights and high-speed trains (e.g., Kuo 2019; Ma and Canales 2021). Therefore, joint punishment results in both material and reputational loss to individuals, companies and organizations, serving the goal of the SCS—“making it difficult for the discredited to take a single step”4 (State Council 2014).

Recently, there has been evidence emerging that the Western economies might take a somewhat similar direction in the aftermath of the COVID-19 crisis (e.g., Roth 2021), further highlighting the importance and urgency to obtain a thorough understanding of the SCS.

3. Shame and Labeling

3.1. The Literature on Shame

Shame has long been used as a mechanism of social control in all societies. For example, the Old Testament recorded many instances of shaming (Bechtel 1991). From the sociological perspective, shame is a social emotion that “reaffirm(s) the emotional interdependency of persons” (Scheff 2000, p. 92). It arises from external pressure and is reinforced by the internal pressure of seeing oneself negatively from the others’ point of view (Cooley 2017; Mead 1937). In this sense, public opinion influences people’s behavior, and rejection by others (e.g., a group) means being isolated from them. The bonded group is able to exert great external pressure on people, which, consequently, controls their behavior. In other words, shame is a result of a threat to the social bond (Scheff 2000) and is related to the sense of self and personal identity (Babcock and Sabini 1990; Tangney 1998). People feel shame occasionally, but they anticipate it constantly, making shame pervasive in all social interactions (Goffman 1967). The effectiveness of shaming is directly linked to the interdependent nature of human beings and the requirement of standards and rules of behavior (English 1994). Therefore, shame works most efficiently in group-oriented (vs. individual-oriented) societies, where an individual’s identity formation is more deeply based on belonging to the strongly bonded group (Douglas 2002). It is thus expected to be a more competent tool of social control in China, which is characterized by a group-oriented culture (Furukawa 2016).

Shame is also linked to the notion of face by Goffman (1967). According to him, face is about the avoidance of embarrassment, while losing face is about suffering embarrassment, which is a central thread to understanding shame. The connection between shame and face helps to better understand the role of shame in the Chinese approach to social control. The concept of face (or mianzi) in Chinese culture is complex5 and is “the most delicate standard by which Chinese social intercourse is regulated” (Yutang 1935, p. 200). Rooted in Confucianism, the Chinese have a high degree of sensitivity and consciousness regarding the concept of face, which is directly related to social standing (Li et al. 2015). The emotion of shame helps maintain a sense of personal identity; while respect increases social status, shame lowers status (Bechtel 1991). In China, people’s standing and identity in the social hierarchy are particularly important (Hwang 2001). Therefore, shame not only functions in promoting compliance but is also a powerful force in the formation of the structure of Chinese society.

As a form of informal social control, shame is identified and shown with empirical evidence to be a more severe punishment and to have a stronger impact on individuals than formal sanctioning by the police and law (Akers 2013; Allen et al. 2017; English 1994). Bechtel identifies three major functions of shame: “as a means of social control which attempts to repress aggressive or undesirable behavior”; “as a pressure that preserves social cohesion in the community through rejection and the creation of social distance between deviant members and the group”; and “as an important means of dominating others and manipulating social status” (Bechtel 1991, p. 53).

3.2. The Labeling Theory

The labeling theory seeks to “demonstrate how social norms and expectations surrounding a label help construct the identity of the labelled” (Appleby 2010, p. 424). It is an important theory of deviance in the study of criminology (Becker 2008; Scheff 1974; Wellford 1975). When brought into development policy in the mid-1980s, the concept of labeling was expanded beyond classification towards designation, and its relevance for relationships of power was recognized, which, as defined by Foucault (1977), enforce control, regulation and management. In the words of Wood, “the validity of labels becomes not a matter of substantive objectivity but of the ability to use labels effectively in action as designations which define parameters for thought and behaviour, which render environments stable, and which establish spheres of competence and areas of responsibility” (Wood 1985, p. 349).

The labeling model can be divided into two stages: the labeling process and the labeling consequence (Gove 1980). According to Wood, “the process of labelling is a relationship of power” (Wood 2007, p. 20), and asymmetries in power may then influence labeling processes (Carragee and Roefs 2004). The involvement of authoritative state actors such as courts and government officials as enforcers—also known as bureaucratic labeling—makes labeling more powerful (Akers 2013). In the context of bureaucratic labeling, there is usually a distance, which may exist in social, political and economic spheres, between the labeler and the labeled due to limited contact between them. In addition, labels, especially negative ones, could “disempower groups through the creation of potent negative stereotypes and can thus be a powerful means of exercising social control and a tool to manipulate identities” (Chan and Erikainen 2018, p. 610). As such, labeling processes may further foster new forms of inequality and sustain already-existing unequal power relations (Gupte and Mehta 2007; Wood 2007).

Labeling consequences are closely associated with power imbalances in labeling processes, in three main ways. First, due to the distance between the labeler and the labeled, labeling (especially bureaucratic labeling) may result in “a lack of accountability to the labelled not only for how they are categorized but also for the outcomes of this categorization” (Moncrieffe 2007, p. 11). Second, labeling processes that involve diverse motivations—both calculated and manipulative political intent—lead to mixed outcomes, including unanticipated and usually negative ones (Moncrieffe 2007). There is ample evidence showing that labels can bring about discrimination and stigmatization on individuals and influence even close social relations, such as among family members and within communities (De Haan 2013; Eyben 2006). Third, bureaucratic labeling processes may simply overlook differences among those with the same label (see Cornwall and Fujita 2007; Gupte and Mehta 2007). For instance, it has been found that African-Americans want to distinguish themselves from recent African immigrants due to the different historical development between the two (sub)groups (Safran 2008).

3.3. The Role of Digital Technology in Social Control

With the pervasive increase in the importance of computing and telecommunication devices, industrial societies have been interpreted as evolving towards surveillance societies (Flaherty 1988). Compared to panoptic surveillance, which is derived from Bentham’s architectural design of the Panopticon in the early 19th century, digital-technology-based surveillance has become increasingly automatic and partly triggered by the data subjects themselves (Gandy 1989). Therefore, data protection has become a major concern raised as a result of digital-technology-facilitated surveillance (Katz 1988).

Digital technology enables the public to be more involved in the processes of labeling and defining how things are, including the justification of the notion of crime (Greer and Reiner 2014). It facilitates the phenomenon of “trial by media”, which is defined as “a dynamic impact-driven, news media-led process by which individuals—who may or may not be publicly known—are trialed and sentenced in the ‘court of public opinion’” (Greer and McLaughlin 2011, p. 27). In this situation, the media (especially the new media sector) not only acts as a “proxy for public opinion,” but also assumes the roles of prosecution, judge and jury to label and shame the target who, on the other hand, is almost defenseless (Greer and Reiner 2014). As a result, digital technology promotes the public’s involvement in social control and may thus help to alter the traditional power relationships in the shaming and labeling processes. At the same time, “(w)hile the power to apply extralegal criminal labels is now in the hands of many, stigma in the form of a digital footprint is arguably more difficult than ever to escape”, and the labeled are thus discouraged from engaging with the processes of reintegration (Lageson and Maruna 2018, p. 113).

Digital technology is used by governments to communicate with the public to enhance public relations as well as to fulfill several organizational functions, including online shaming (Levmore and Nussbaum 2012; Linders 2012). Administrative online shaming “places the full rhetorical power of the state behind the shaming of particular individuals (often those with few resources to fight back)” (Oravec 2020, p. 8). Power asymmetries, which exist in the traditional forms of social control, could be further amplified by digital technology. An obvious result is a significant fairness concern—for example, while rosters of individuals who owe arrears to governmental organizations are easily accessible online, it is difficult to obtain well-organized information about reported occupational fraud (Sage et al. 2015).

4. Methods

To initially inform our research study, we reviewed and analyzed government documents and the SCS platforms at different levels to understand the structure of the system. Policy documents, regulations and laws related to the SCS provide valuable insights into the system and lay a solid foundation for the analysis. In addition, we conducted fieldwork in Beijing, China, to explore how information about SCS blacklists and the “Lao Lai” label spreads and is perceived among residents, and to explore its potential impact.

Reviewing the extant literature, we identified three studies that have made efforts to understand the Chinese citizens’ perceptions of the SCS using online surveys; all reported a generally high level of support regarding the SCS (Kostka 2019; Liu 2021; Rieger et al. 2020). However, there is an important limitation associated with these studies. Since they were all based on online surveys on Chinese platforms, the findings may be influenced by self-censorship due to perceived internet surveillance. We consider it, therefore, of high importance to complement these studies with a more nuanced and qualitative approach. In our work, we aimed for such detailed and explanatory responses to this difficult topic space, and employed in-depth interviews as our key methodology.

Our institution does not require approval for survey or interview studies that focus on non-medical issues. However, in our interviews, we followed recommended academic ethical practices; we gained informed consent from our participants, and informed them about the study goals and their rights to withdraw from the interview and not to answer any questions. We also informed them about our data practices, i.e., that we would anonymize the data, but that the insights gained from the interviews would be used for published research. In addition, we conducted interviews in public areas such as cafés to ensure the safety of both researcher and participants.

The SCS is implemented in all municipalities across China. Prior to the fieldwork, we scrutinized all SCS platforms at the provincial level to learn the status of local SCS development.6 As a result, we found that Beijing was among those with a large amount of behavioral data organized in a very well-structured way (see also Engelmann et al. 2019). According to the credit city ranking, which also offers a key perspective of the SCS construction efforts, Beijing has always been listed at the top.7 Given this background, Beijing could be considered to be at an advanced status in the construction and implementation of the SCS. Residents in Beijing were expected to be more involved and, thus, have more knowledge and interaction with the system. For this reason, we decided to conduct our fieldwork in Beijing.

One researcher conducted interviews with local residents in Beijing in September 2019. Due to the large mobile population (accounting for 38.45%) in Beijing,8 we limited our targeted group to individuals who lived in Beijing for at least six months each year, which is referred to as the resident population. We tried to include people with various sociodemographic characteristics to obtain diversified findings. We employed convenience sampling for selecting our interviewees, which is particularly effective when there are difficulties in finding potential interviewees. We conducted 29 interviews in total. The sociodemographic characteristics of the 29 participants are presented in

Table 1. Sociodemographic characteristics of interviewees. In terms of educational background, three interviewees preferred not to disclose the information and were thus noted as “Unknown” in the table. Regarding the professional background, one interviewee was already retired when the interview was conducted but was placed in the “University and research institute” category as she previously worked in a technical college. The three interviewees with foreign nationalities were originally from China and had worked and lived in Beijing for most of their lives.

Gender		Age		Education		Profession		Nationality
Female	15	20–30	4	Bachelor	20	Private companies	20	Chinese	26
Male	14	30–40	11	Master	5	Foreign companies	4	Foreign	3
		40–50	7	PhD	1	Universities and
		50–60	5	Unknown	3	research institutes	4
		60–70	2			State-owned enterprises	1

.

Due to the exploratory nature of the research study, the interviews were designed in a semi-structured way. There are three parts associated with each interview (see

Table 2. Sample interview questions. These questions were translated from Chinese to English for their inclusion in the article. We list part of the interview questions as we followed a semi-structured strategy.

Segments	Sample Questions
S1: Contextual questions	- What do you think of the overall creditworthiness and trustworthiness environment in today’s China? - Have you heard of the SCS? (If yes, how do you know the system? What is your understanding of the system?)
S2: Perceptions of SCS blacklists	- Have you ever heard of the blacklists of the SCS? - Have you ever seen an SCS blacklist? (If yes, where did you see it and what was the content?) - For what reasons do you think individuals are included in blacklists? - Did you find anyone you know on the blacklist? (If yes, why are they listed, what punishment they have received, do they change their behaviors accordingly? etc.)
S3: Perceptions of the label “Lao Lai”	- Have you ever heard of the term “Lao Lai”? (If yes, where did you learn the term and how do you understand the term?) - Do you know any forms of punishment for “Lao Lai”? - What do you think about the punishment? - In which situation have you used or will you use the search inquiry function in the system?

). The first segment contextualizes the interviews, consisting of some opening questions regarding the participants’ understanding of the creditworthiness environment in China and their general knowledge about the SCS. The second and third segments are the critical parts, centering on the participants’ perception of and experience with the SCS blacklists and the label of “Lao Lai”, respectively. All interviews were conducted in Chinese (the interviewees’ mother language) and lasted around one hour. Only one interview was conducted via telephone, while the other 28 were conducted in a face-to-face manner. Notes were taken with permission from 28 interviewees. One interviewee denied detailed note taking and the researcher assembled a record of the interview immediately after its completion based on her recollection. All information related to interviewees’ identities was anonymized. Instead, we assigned a distinct number to each protocol.

For three participants, the collected interview data only address the first segment of the research effort, which focused on the public’s familiarity with SCS-related concepts. Two of the interviewees had never heard of the SCS or any related concepts and were thus unable to provide further information. The other interviewee (employed at a state-owned enterprise) presented limited knowledge about the SCS and only allowed a very general discussion about the system to be conducted. As a result, the detailed analysis of the results is mostly based on interviews with 26 participants.

We employed the conventional approach (Hsieh and Shannon 2005) to code the transcripts. One researcher who is a Chinese native speaker re-read the interview notes line-by-line to extract meaning units, which are single sentences from the texts. These meaning units were then summarized and abbreviated to codes consisting of only a few words that indicated the essence of the original meaning units. Finally, these codes were grouped into categories. The coding was conducted in the original language (i.e., Chinese) used in the interviews. Only in the final step were the Chinese codes and categories translated into English. There were two rounds of coding at three-month intervals to ensure the reliability of the coding results. Finally, three categories were identified, including the understanding of the SCS, the impact of SCS blacklists and labeling, and perceptions of SCS blacklists and labeling.

Our results are discussed in detail in the following section. We follow a narrative approach in our presentation, including relevant insights from our background research.

5. Findings

5.1. The Public Understanding of the SCS

An important first insight from the analysis of interview data is that participants were much more familiar with the SCS-specific mechanisms of blacklists and the label “Lao Lai” than they were with the SCS itself. As presented in

Table 3. Different knowledge about the concepts of SCS, blacklists and “Lao Lai” among the participants.

	SCS	Blacklists	“Lao Lai”
Never heard of the concept	8	2	3
Heard of the concept, but not familiar with it	12	7	7
Have good knowledge about the concept	9	20	19

, 8 (out of 29) interviewees had never heard of the SCS. Another 12 had heard of the concept but were not familiar with it, as they could not provide further information about the system, such as how it functioned. The other nine participants had a good working knowledge about the SCS, as they were able to provide some explanations about the system, such as its structure and application areas. SCS blacklists and the label “Lao Lai” were both well-known to the participants. Taken together, the interviewees’ knowledge about the SCS application areas and functions was more substantial than their familiarity with the system itself (e.g., its goals, structure and departments).

There are different types of SCS blacklists across a wide range of areas. In our interviews,9 19 out of 26 participants were able to refer to at least one type of SCS blacklist—in most cases, the “List of Dishonest Persons Subject to Enforcement,” which is also the most widely deployed SCS blacklist across all local SCS platforms (Engelmann et al. 2021). In our sample, five participants were able to provide the official name of the blacklist, while others called it “Lao Lai List” or “blacklist about debtors”. The SCS blacklist recording misbehavior on high-speed trains was mentioned by two other participants. Another two participants claimed that they had heard of the SCS blacklists but could not specifically name any of them. In addition, participants also mentioned some non-SCS blacklists such as those issued by financial organizations and those related to international trade. Therefore, the distinction between SCS blacklists and other blacklists was not very clear to the participants.

The term “Lao Lai” is closely associated with the SCS, as it has appeared frequently in media reports about the system in recent years. Interestingly, the term does not occur in any SCS-related official documents issued by the government or courts, except when official government websites such as the SCS national platform share or cite news reports using the term (Chen et al. 2022). Our interviews suggest that mass media represent the dominant pathway for the public to hear about the label “Lao Lai” as well as SCS blacklists. In the interviews, 20 participants stated that they had learned the two concepts from different types of media. Another six interviewees learned the concepts from the SCS national platform (two participants), court websites (two participants) and street screens (two participants).

In our background research, we found that the term “Lao Lai” appears to be widely used in media reports as a substitute term for “dishonest persons subject to enforcement” to refer to typical protagonists who failed to repay debt. At the same time, a detailed explanation of the term “Lao Lai” is not provided, including an explanation of the exact similarities to and differences from “dishonest persons subject to enforcement”.

According to the most popular Chinese-language online encyclopedia—Baidu Baike—“dishonest persons subject to enforcement (失信被执行人)” are commonly known as “Lao Lai”, referring to those that “have the capability of performing obligations, but do not perform the obligations determined in the effective legal instrument”10. The “Blacklist of Lao Lai” (老赖黑名单) is introduced as a commonly known familiar form of the “List of Dishonest Persons subject to Enforcement”, and “Lao Lai” is linked to “debtors who evade debt obligation and lack trustworthiness”11.

By contrast, according to the revised version of Several Provisions of the Supreme People’s Court on Announcement of the List of Dishonest Persons subject to Enforcement, the definition of “dishonest persons subject to enforcement” is very comprehensive and highlights legal and regulatory compliance from six different perspectives, which do not necessarily have to be about repaying debt (see

Table A2. Definition of “dishonest persons subject to enforcement” from the court (The Supreme People’s Court of The People’s Republic of China 2017).

“When the person subject to enforcement fails to perform the obligations determined in an effective legal instrument and falls under any of the following circumstances, a people’s court shall include the person in the list of dishonest persons subject to enforcement and impose credit-related punishment thereon in accordance with the law”:

1. Having the capability of performing obligations but refusing to perform the obligations determined in the effective legal instrument;

2. Obstructing or resisting enforcement with forged evidence, violence, threat or other methods;

3. Evading enforcement by fraudulent litigation, false arbitration, concealment or transfer of property, or other methods;

4. Violating the property reporting system;

5. Violating the Order on Restriction of Consumption;

6. Refusing to perform the enforcement reconciliation agreement without any justified reasons.

). Therefore, the explanation of the term “Lao Lai” provided by Baidu Baike highlights only one out of the six circumstances listed. As such, “Lao Lai” is not an accurate substitute for the concept of “dishonest persons subject to enforcement”. However, the difference has been overlooked and has not been scrutinized sufficiently.

Participants’ understanding of SCS blacklists and the label “Lao Lai” is aligned with the portrayal of the terms by the media. Among the 26 interviewees who had some knowledge about the label, half of them (13 out of 26) defined “Lao Lai” as persons who do not repay debts (see

Table 4. Different understandings of the label “Lao Lai” among the interviewees.

Understanding of “Lao Lai”	No. of Interviewees
Not repaying debt	13
Having the capacity but not repaying debt	7
Not repaying debt and failing to perform after the court’s decision	4
Having the capacity, no insolvency (of a legal person) and not repaying debt	2

). Seven interviewees explained the label as persons having the capacity, yet not repaying their debt. Four interviewees identified two elements—not repaying debt and failing to perform the obligation after a court’s decision. Another two interviewees mentioned three key elements of “Lao Lai”—having the capacity, no insolvency and not repaying debt. Taken together, all participants relate the label “Lao Lai” to debt repayment, which is in line with what common sources highlight (e.g., Baidu Baike on the webpage of “Blacklist of Lao Lai”). Specifically, when talking about the label “Lao Lai”, three participants immediately referred to a famous Chinese businessman who was on the List of Dishonest Persons Subject to Enforcement and widely reported by the media as a “Lao Lai”. In addition, 6 out of the 26 interviewees associated the label “Lao Lai” with poor ethical performance and regarded the SCS blacklists as a tool to regulate moral behavior, rather than legal compliance.12

5.2. Impact of SCS Blacklists and the Label “Lao Lai”

Under the SCS framework, individuals included in the SCS blacklists suffer both reputational and material loss. Take the most popular “List of Dishonest Persons subject to Enforcement”, for example. Different courts adopt various designs of the lists (Engelmann et al. 2021). Usually, an entry includes the full name of the individual, the partially anonymized ID number and the legal obligation they failed to perform. Some local courts disclose more personal information, such as a real photo of the person and the detailed home address. The blacklist is published both online and offline. Online platforms, such as China’s Enforcement Information Disclosure Website (http://zxgk.court.gov.cn/, last accessed on 5 May 2022), usually provide a list containing links to each of the entries for details as well as the inquiry function for users to search for specific persons. Some of them (e.g., SCS platforms from Inner Mongolia and Shandong) may also include a sharing function, enabling users to share the records through popular Chinese social media platforms (e.g., Wechat, Sina Weibo and Baidu Tieba). One interviewee mentioned that it is common to see the list displayed in public areas such as on large screens in train stations or on posters at bus stops and community buildings in some Chinese cities such as Hefei and Jinshi.

Social media are used not only to expand the scope of broadcasting details about the SCS blacklists, but also to make message delivery more target-oriented. Telecommunication companies13 also play a role to foster the mechanism of shame through cooperation with local courts. When people make a phone call to a blacklisted person, they are first informed that the person they are calling is a “Lao Lai” before the line is connected. In addition, the Higher People’s Court of Hebei Province is currently developing a mini-program called “Lao Lai Map (老赖地图)”; it is available on WeChat, which is a popular multi-purpose social media in China. The current version of the map can pinpoint the user’s location and scan its database for entries within a radius of 500 m for “Lao Lai”. It is assumed that the information about “Lao Lai” in the vicinity is of higher relevance to the user, in particular in a small community. Users can share any results directly on WeChat or report new “Lao Lai” through the mini program. The color of the map changes from blue to yellow to red as the number of “Lao Lai” increases to further raise attention.

Material penalties (that follow inclusion in a blacklist) are derived from the joint punishment mechanism, which is based on various MoUs. Thus far, there are 48 national-level MoUs about joint punishment focusing on misbehavior in different areas. In total, 4 out of the 48 MoUs are related to “dishonest persons subject to enforcement”.14 The most influential MoU—Cooperation Memorandum of Understanding on Taking Joint Disciplinary Actions against Dishonest Persons Subject to Enforcement—was signed by 44 government authorities, proposing 55 punishment measures in eight categories and targeting both companies and individuals. According to this MoU, the economic as well as social life of a “Lao Lai” might be negatively influenced, such as becoming ineligible for employment as civil servants, being banned from playing golf and their children being restricted from enrolling in high-tuition private schools (see

Table A1. Punishment measures from Cooperation Memorandum of Understanding on Taking Joint Disciplinary Actions against Dishonest Persons Subject to Enforcement.

Categories	Examples	Implementation Authorities
1. Restrictions on establishing financial institutions	Restrictions on issuing corporate bonds; restrictions on acquisition of listed companies	National Development and Reform Commission
2. Restrictions on carrying out civil and business activities	Restrictions on participation in government procurement	Ministry of Finance
3. Restrictions on access to certain professions	Restrictions on employment as civil servants and in public institutions	Organization Department of the Communist Party of China, Ministry of Human Resources and Social Security, State Administration of Civil Service
4. Restrictions on holding important positions	Restrictions on holding positions as a legal person, director or supervisor in state-owned enterprises	State-owned Assets Supervision and Administration Commission of the State Council, Ministry of Finance
5. Restrictions on the availment of incentives and honorary titles	Banned from application for the honorary title of role model in ethical and cultural progress	Publicity Department of the Communist Party of China, Central Commission for Guiding Cultural and Ethical Progress
6. Restrictions on luxury consumption	Restrictions on consumption, such as golf course access, taking flights, etc.; limiting children’s ability to attend high-tuition private schools	Ministry of Commerce, The Ministry of Public Security, China National Tourism Administration, Ministry of Culture26
7. Restrictions on leaving the country, convictions and punishments	Restrictions on leaving the country; assistance in the prosecution of the crime of refusal to satisfy a judgment or ruling	The Ministry of Public Security, The Supreme People’s Procuratorate
8. Assisting in inquiries of and publishing the information of dishonest persons subject to enforcement	Assisting in inquiries of information about certified enterprises of Customs Administration; information disclosure on “Credit China” website and national enterprise credit information publicity system	General Administration of Customs, National Development and Reform Commission, State Administration for Industry and Commerce

for details). During the interviews, 22 out of the 26 participants were able to name certain types of joint punishment, especially about restrictions on luxury consumption, including taking flights and high-speed trains, indicating that the public is familiar with the joint punishment mechanism. However, interviewees lacked knowledge about punishment scales and details.

In addition, we inquired whether the participants could share with us what they knew about the impact of the SCS (as well as being blacklisted and labeled) in real life. Four interviewees reported experiences regarding six different “Lao Lai”. These six individuals were regarded as “Lao Lai” by the interviewees because they were included in “List of Dishonest Persons Subject to Enforcement”. One of these “Lao Lai” was the previous employer of an interviewee, one was a debtor of an interviewee’s company, two were customers of an interviewee’s company and two were friends of an interviewee. All six blacklisted individuals were businessmen. In one case, the “Lao Lai”, as legal representative of a company, was not able to buy flight tickets, since the company failed to perform a court order about debt repayment. Before taking any further actions, he first turned to a lawyer and was advised to respond to the obligation. Two other “Lao Lai” were known to be restricted in certain areas. However, the interviewees failed to provide further details about the punishment and substantial impacts. In these three cases, it also remained unclear if any of the “Lao Lai” had repaid their debt.

In the other three cases, enforcement measures were implemented, such as the freezing of assets. However, the interviewees reported that none of them had repaid their debts so far. Rather, according to the interviewees, these three “Lao Lai” managed to live a “normal life”. For example, they registered companies under their relatives’ names and did not care about being included on the blacklist or carrying the label “Lao Lai”. What is more, the interviewees observed that they continued “their fraudulent ways” (using the original term used by the interviewees when referring to the dishonest economic behavior).

5.3. The Public’s Perceptions of SCS Punishment

In total, 12 out of 26 interviewees self-reported an overall positive attitude towards SCS blacklists (see

Table 5. The public’s perception of the punishment on “Lao Lai”. The table lists the most frequently mentioned points of view.

Attitudes	SCS Blacklisting Mechanism		Joint Punishment Mechanism
Positive	12	Effective and innovative tool for social governance	14	Effective and reasonable punishment
Mixed	2	Dependent on different perspectives of the mechanism	6	Dependent on different perspectives of the mechanism
Negative	12	Not effective and privacy concerns	6	Not effective and unfair punishment

). The same number of participants, on the other hand, held an overall negative attitude. Moreover, the other two participants offered a mixed view. Participants who supported the implementation of SCS blacklists considered it as an effective and innovative tool for social control; in particular, for facilitating law enforcement (10 participants) and regulating moral behavior (2 participants). Seven participants stated that SCS blacklists are a suitable approach given China’s national conditions, which were—according to the participants—characterized by a large population, low national suzhi (translated as quality15) and a lack of insolvency laws.16 For instance, one participant remarked that “it is very difficult to govern such a big population without using some imposed measures like the blacklists.” (Participant B1909). Another participant stated, “since the ethical conduct cannot be regulated by laws, it is difficult to enhance the moral standard of the society… the issue of moral decline will become increasingly worse if it is not governed with a high-level design.” (Participant B1923).

Among those with a negative attitude towards SCS blacklists, five participants doubted its effectiveness, especially when people do not care about their reputation. Two others challenged the transparency of the system, such as how the blacklists are shared and among which departments. In terms of the mixed view, one participant distinguished between the effects of SCS blacklists on the whole society (with a positive view) and on individuals (with a negative view). The other participant was in favor of the design of the SCS blacklists but raised concerns about difficulties during the implementation process. More specifically, he emphasized the need for balance between punishment and misbehavior—punishment should be given in a manner proportionate to its severity.

Privacy concerns turned out to be an issue widely discussed by the interviewees. Only 2 (out of 26) participants claimed that SCS blacklists did not infringe on someone’s privacy, given that personal information was disclosed after a court’s sentence/order. The other 24 participants, despite their diverse attitudes towards the SCS blacklist mechanism, considered these practices as problematic from a privacy point of view but to varying degrees.

Twelve of them considered the infringement of privacy raised by blacklists as a significant problem and expressed worry about it. Specifically, three participants understood this phenomenon in the general context of Chinese society and culture in which, according to them, there is low public awareness about privacy and a weak legal environment for privacy protection. In the words of one interviewee, for example, “people have got used to the current situation in which we just do not have any privacy” (Participant B1921). In contrast, the other half of participants (12), even though they recognized the privacy concerns, supported the way in which the personal information of a “Lao Lai” is disclosed and regarded it as an effective regulatory mechanism. Specifically, eight of them considered blacklists as a proper and reasonable punishment for a “Lao Lai”. According to nine participants, the disclosure of personal information is necessary to ensure the effectiveness of public shaming. One interviewee stated that “[personal information] should be disclosed. Otherwise, how can [SCS blacklists] warn others effectively? It is a reasonable punishment for them. Lao Lai do not care about privacy.” (Participant B1907). Another interviewee expressed that “you should be careful about your own behavior if you really care about privacy. I think [SCS blacklists] are good.” (Participant B1922).

As for the joint punishment mechanism, 14 interviewees presented an overall positive view (see Table 5) regarding the mechanism as a reasonable punishment for a “Lao Lai” and as effective in enhancing law enforcement. Six participants held a mixed view towards the joint punishment mechanism. On the one hand, they thought joint punishment was effective; on the other hand, they raised concerns such as the involvement of other (related) individuals (e.g., their children) in the punishment, the very wide scope of punishment in almost all dimensions of an individual’s life and the application of facial recognition in the context of the SCS. The other six participants were not in favor of the joint punishment mechanism. Four of them considered it as ineffective. According to these participants, the mechanism was not able to solve the fundamental problem of enhancing law enforcement, as a “Lao Lai” could avoid punishment in some other ways. In the words of one participant, “[the joint punishment mechanism] only treats the symptoms but not the root cause” (Participant B1902). Two interviewees held the opinion that joint punishment was still “too slight”.

Overall, about half of the interviewees offered support for SCS-related punishments—the blacklist mechanism and the joint punishment mechanism—which is generally consistent with the findings obtained by Rieger et al. (41–57% approval rate of the SCS) (Rieger et al. 2020). At the same time, we also observed a difference in the perceptions of the two mechanisms: the SCS blacklisting mechanism received more negative comments than the joint punishment mechanism.

6. Analysis

6.1. The Dilemma of Institutionalized Debt Shaming

Public debt shaming has existed in different societies for a long time and has developed in various forms—from the debt pillory (Schuldenpranger) in Europe in the Middle Ages, to “lunch shaming” in the U.S.17 and to the recent online shaming through the disclosure of debtors’ personal information.18 At a high level, SCS blacklists in China function in a similar way but with three distinctive characteristics: the large scale of shaming, and the attached and the dominant role of the government. In particular, the employment of digital technology moves SCS blacklists towards an institutionalized shaming mechanism. With the assistance of digital technology, SCS-blacklist-related data are encouraged to flow between different departments; digitized blacklists reach a much broader audience; the message delivery of SCS blacklists is more target-oriented; and the corresponding data can be implemented in a more automated fashion. For one single SCS blacklist—the “List of Dishonest Persons Subject to Enforcement”—nearly 16 million individuals were included. The SCS blacklists are open to the public free of charge and even without registration. In addition, based on the wide range of data collection and the cooperation among the courts, telecommunication companies and IT companies (see, for example, functions related to WeChat), the “Lao Lai” message can be delivered accurately to his/her bonded group (e.g., friends, family members, neighbors, etc.).

In the academic literature, cultural differences in shame have been much discussed (Crystal et al. 2001; Heider 2006; Markus and Kitayama 1991). Comparatively, Chinese people are more sensitive to being personally shamed, as shame is connected to morality in Confucianism (Bedford and Hwang 2003). Thus, the target-oriented message delivery of the label “Lao Lai” can greatly magnify the impact of shame (Scheff 2000). Shame functions on both the “Lao Lai” and his/her bonded group—in most cases, the family—thus facilitating compliance. Therefore, in some cases, family members may take over the legal obligation (i.e., debt repayment) for the “Lao Lai”.19

The “List of Dishonest Persons Subject to Enforcement” is issued by courts at different levels based on the relevant judicial documents. In general, this is in line with the global trend of courts’ transformation “from paper-based systems of processing and record keeping to digital records, and from primarily locally accessible records to records accessible online via the Internet” (Conley et al. 2011, p. 773). A key issue in the transformation is that courts have to balance between the public’s interest in access and an individual’s interest in privacy. There are different regulations affecting the scope of the disclosed content and the access to the online court records. According to the Provisions of the Supreme People’s Court on the Publication of Judgments on the Internet by the People’s Courts, personal information, including home address, contact information, ID number, bank account number, health status, vehicle license plate number and certificate numbers of movable and immovable properties, should be deleted from the documents (The Supreme People’s Court of The People’s Republic of China 2016). However, there are still many blacklists issued by local courts disclosing the aforementioned personal information, raising substantial privacy concerns. This also reflects the gap between SCS design and regulation, and implementation practices, which was also mentioned by one of our interviewees.

On the other hand, the anonymization of personal information and restrictions on the spread of SCS blacklists would reduce the power of shame. The mechanism of shame would not work effectively if the public were not able to identify the individuals on the blacklists. In China, it is common for people to have the same name. Therefore, in many cases, it is unclear to whom the name on the blacklist refers if no further context is provided. In fact, several news reports have highlighted that individuals with the same name were negatively affected by cases of mistaken identity.20 How to avoid such scenarios is a difficult challenge for shaming mechanisms. As such, the SCS blacklists are confronted with a dilemma between privacy protection and the effectiveness of shaming.

6.2. Power Relationships in the Shaming and the Labeling Process of “Lao Lai”

Shaming and labeling are inherently political exercises (Eyben 2013). Vulnerability to shame could lead to the “exploitation and abuse of individuals or groups by others who thereby establish power over them”. Historical examples are the British Empire, which used shaming to keep colonials in their place, and the upper classes in Europe, which applied shame to control the lower classes (English 1994, p. 111). The SCS has created an institutional context that exerts independent social pressure on individuals to comply with laws and social norms through the mechanisms of shame and labeling. The SCS blacklists and the label “Lao Lai” are particularly powerful due to the special design of the SCS. First, in the process of labeling “Lao Lai”, the courts take a dominant role as the labeler, and many other government departments are also involved under the framework of the SCS by offering joint punishment to the labeled. The involvement of the large number of authoritative state actors makes the SCS blacklists and the label “Lao Lai” more powerful (Akers 2013). Second, the punishment attached to SCS blacklists and the label “Lao Lai” cover a wide range of economic, political and social fields to serve the goal of “making it hard for the discredited to take a single step” (State Council 2014). The labeled individuals are given the right to challenge the court for the listing. However, they have to go through relatively complicated administrative and/or legal processes. This further enhances the considerable distance between the labeler and the labeled (Moncrieffe 2013). The power asymmetry between the labeler and the labeled could result in generalization and misuse of the label, which was well-reflected in our interviews. In addition, the label is associated with a strong negative connotation and is designed, on purpose, to deliver a negative impact on individuals’ social network through the mechanism of shame (Moncrieffe 2007).

In total, 13 (out of 26) participants challenged the justification criteria for “Lao Lai”. In order to label correctly and accurately, it is necessary to evaluate each case comprehensively. There are various reasons why a person is in debt. One participant gave a real case about her previous boss who was included in the “List of Dishonest Persons Subject to Enforcement” and labeled as “Lao Lai” as he failed to pay salaries to the employees. However, according to the participant, her boss “was really a very nice person, being kind to his employees and having a sense of responsibility for social actions” (Participant B1906). The company was a private enterprise. It invested a large sum of money for a municipal project but then did not receive the construction funds from the local government, which was also in financial difficulty. In this situation, she challenged if her boss should be labeled as “Lao Lai” and raised the question about the root cause of the quagmire. Such occurrences might lead to a lower level of trust in the labeling mechanism as a means of social control.

Participants also worried about the lack of fairness resulting from the “one-for-all” labeling model, which takes little account of the severity of the misbehavior. Seven participants proposed the necessity of a rating system for the SCS. More specifically, they suggested that ratings should be based on the degrees of the obligation, for example, the amount of debt, which could range from CNY one thousand to CNY hundreds of millions, or the nature of the misbehavior (e.g., failure in debt repayment or fraud). One participant referred to bond credit ratings and sovereign ratings as models for the rating of “Lao Lai”. Another participant suggested that “those who use the data make the assessment based on their own needs—an automobile seller and a real estate agent may set different evaluation criteria for their customers” (Participant B1902).

6.3. Manipulative Motivations and Unprecedented Outcomes of SCS Blacklists and the “Lao Lai” Labeling

There are many different types of blacklists across the manifold dimensions of interactions in society, such as those used by financial organizations and those set by users in cell phones (to block certain contacts). In comparison with other blacklists, the creation and the use of SCS blacklists are government-led with strong political and economic motivations. Politically, they are expected to solve the problem of “difficult enforcement,” with which courts have long been confronted (Zheng 2019). Economically, Chinese companies suffered a loss of about RMB 600 billion (about USD 95 billion) annually due to the lack of trustworthiness in the Chinese market.21 The recent debt crisis related to Evergrande, as well as Kaisa Group’s default, further manifests financial worries in China. In this situation, preventing debt defaults is an important task for the Chinese government22 and the SCS is expected to be part of its strategy (State Council 2014). As such, SCS blacklists23 and the joint punishment mechanism also serve the goal of debt-default prevention. However, there are (potential) unprecedented outcomes derived from the SCS mechanisms that contradict the purposefully designed goals of the system.

Both shaming and labeling lead to stigmatization (Braithwaite 1989; Rokeach 1960). The SCS also brings about outcasting and the confirmation of the master status of a deviant to the blacklisted individuals, in which the “Lao Lai” status supersedes other identities. The “List of Dishonest Persons Subject to Enforcement” divides people into two groups, “Lao Lai” and non-“Lao Lai”, based on questionable criteria (as discussed in the section above) to facilitate social control. In this process, previous research has argued that perceived differences can lead to devaluation and discrimination against the outgroup (Bar-Tal 2012). Taken together, through the various processes described, a firm stereotype and discrimination against “Lao Lai” has developed in Chinese society. For those that are labeled as “Lao Lai”, subordinate status is emphasized through joint punishment—for instance, through restrictions on the access to certain public services (e.g., flights and high-speed trains), taking certain positions (e.g., as civil servants) and their children’s access to high-tuition private schools—consequently resulting in social hierarchies (Eyben 2013).

Not being able to differentiate between sub-groups with the same label (Cornwall and Fujita 2007; Safran 2008) can enlarge the scale of stigmatization and reinforce social hierarchies. In the interviews, from the conceptual perspective, participants distinguished two types of “Lao Lai” in their mind. On the one hand, there are individuals that have the capacity but deliberately refuse to perform the obligation; on the other hand, some individuals may lack the capacity to perform the obligation. Participants referred to the former type as the “real Lao Lai”. Still, in practice, they were not able to make the distinction between others and the “real Lao Lai” as further background information would be needed; the same applies to the justification of the label. Ge Liu, a commentator of China Central Television (CCTV) Business Review, which is a highly influential TV program in China, named the two types of “Lao Lai” in a short news article as “passive-type Lao Lai (被动型老赖)” and “deliberate-type Lao Lai (主观故意型老赖)” (corresponding to what participants termed as “real Lao Lai”). He highlighted the difference in the formation mechanism between the two types of “Lao Lai” and concluded several common steps via which entrepreneurs become “passive-type Lao Lai”: The entrepreneur is successful at the beginning, then easily becomes over-confident and invests irrationally in extremely big projects with help from local governments and banks; however, the entrepreneur is later confronted with financial difficulties, usually due to poor management skills and the lack of experience. At this point, banks may also demand early repayment to avoid bad debt, so that the entrepreneur has to turn to high-interest loans;24 once the funding chain breaks, the entrepreneur may not be able to repay debts and ends up being blacklisted and labeled as “Lao Lai” (G. Liu 2019).

In the situation described above, the “passive-type Lao Lai” does not act in a fraudulent manner but is confronted with a lack of liquidity due to unwise decisions or the changing economic environment. However, once they are blacklisted and labeled, they are also trapped in the joint punishment. In addition, according to our interviews, the label “Lao Lai” is now not only related to individuals’ failure regarding compliance with certain legal obligations, but also to individuals’ moral bankruptcy. From the blacklisted individual’s perspective, the label “Lao Lai” functions as an external identity factor constituting a negative influence on his/her identity beyond his/her control (Critcher 2017; Goffman 1959). Once the deviant identity is assumed by the blacklisted, the personal confirmation of negative stereotypes further threatens the stigmatized individual. In addition, as labels impose boundaries and define categories (Moncrieffe 2007), they ultimately create deviance in the society. Individuals are “likely to take on a deviant self-identity and become more, rather than less, deviant than if they had not been so labelled” (Akers 2013, p. 101). In other words, individuals are more likely to behave like a “real Lao Lai” or “deliberate-type Lao Lai”, refusing to perform the obligation even though they have the capacity. From this perspective, the mechanisms may actually hinder economic development as entrepreneurs are restricted from access to the resources they need to recover.

6.4. The Role of Digital Technology and Media in Blacklisting and Labeling

Digital technology plays an important role in both creating and spreading SCS blacklists and the label “Lao Lai”. As discussed in the above sections, data collection, processing and publication could be completed automatically, greatly increasing the efficiency of the SCS and institutionalizing its mechanisms. This process is facilitated by technology companies that provide technical support during the SCS construction. For example, high-tech giant Alibaba signed the Memorandum of Cooperation on Promoting the Credit System Construction in Business Fields with the National Development and Reform Commission to promote credit data sharing and the implementation of the joint punishment and rewards.25 As a result, the “corporate–state nexus” (Zuboff 2015) further enhances the government’s capability of social control through the digital transformation of society. However, the reliance on digital technology also raises public concerns about privacy, fairness, transparency, etc. For instance, while the automatically generated SCS blacklists are able to work effectively to promote law enforcement, they can also “impose sanctions with less than proper investigation, examination and trial” (Hansen and Weiskopf 2021, p. 122).

Our interviews also showed the importance of media (both traditional and new media) in delivering information about “Lao Lai” through media reports, which aligns with high-level findings from a 2002 survey of Londoners (FitzGerald et al. 2002). According to the survey, which focused on Londoners’ expectations regarding the police, reports from news media rather than personal experiences were the main source of information about the police. Likewise, in this section, we focus on the role of digital media in blacklisting and labeling “Lao Lai”.

It has long been a strategy for the Chinese government to use the media for setting the agenda for political discourse, the promotion of public policies and the monitoring of the public opinion (Tang and Iyengar 2011; Winfield and Peng 2005). The infrastructure of Chinese media has experienced commercialization and digitization over the past decades, thus becoming more capitalistic and profit-driven. At the same time, the Chinese government accordingly adapted its media strategy to act in a more indirect way, e.g., by fostering self-censorship, offering public-opinion guidance and blocking access; however, overall, it retains strong control over the media (Pan 2017). On the other hand, to a certain degree, the emergence of new media triggered a change in Chinese political communication by empowering the public and diminishing the state’s ability to set the public agenda and shape political preferences (Esarey and Xiao 2011). Still, the government’s control and intervention activities extend to the various forms of digital media (Sparks et al. 2016). Specifically, in the context of the SCS, the Chinese government seems to be particularly interested in using the pervasive social media to increase the range of the potential impact of shaming and labeling in the administrative context. In this sense, the political dominance of the government over the media in China reinforces the role of media in the process of labeling “Lao Lai”, making the label even more powerful.

Efforts to instill moral panic were also described in our interviews as the media emphasize the reporting of the blacklist and the label “Lao Lai”, linking them to individuals’ morality. As a result, the blacklisted and “Lao Lai” become defined as a threat to the societal value of trustworthiness (Cohen 2011, p. 1). Moreover, the utilization of digital media facilitates the real-time spreading and the pushing of specific messages to targeted people, such as distributing the personal information of “Lao Lai” to the bonded group to destroy his/her social network. In this way, the process of moral panic is further reinforced.

Individuals that are blacklisted and labeled as “Lao Lai” are tried and sentenced not only in the traditional courts but also in the “court of public opinion” for public scrutiny and judgment (Greer and McLaughlin 2011). In contrast to the government information portals, digital media provide platforms that are familiar and easily accessible to the public. At the same time, judgment or discussion is likely influenced by the media’s implicit and explicit guidance (e.g., selective information disclosure and positive or negative tones in the narratives). In this way, the media fulfills a role that lies beyond the capabilities of formal institutional authority (Machado and Santos 2009) and constitutes a strong complement to the latter in the case of blacklisting and labeling “Lao Lai”.

7. Concluding Remarks and Discussion

In contrast to research that primarily interprets the SCS as a surveillance system, we follow the other trend, led by Meissner and Wübbeke (2016) and Backer (2019), to understand the system as one that seeks to instill trust and to educate, regulate, and change the behavior of individuals and organizations. Overall, the SCS employs both formal and informal means to deal with nonconformity (especially when related to a lack of trustworthiness). Our analysis focuses specifically on two informal mechanisms—shaming and labeling—that are both deeply rooted in tradition and widely used across different cultures. In general, both mechanisms enhance the perceived effectiveness of the SCS, in particular with the assistance of digital technology. However, according to our interviews, the SCS may not be able to fully influence individuals’ behavior, especially when the “real Lao Lai” do not care about their reputation and could find a way to avoid the penalties imposed. Therefore, it is too early to conclude that the system can be deemed a complete “success” from the perspective of system designers as a tool of social control in the digital transformation of society.

Digital technology assists the SCS in institutionalizing (debt) shaming. The far-reaching distribution and the target-oriented delivery of SCS blacklists with detailed personal information strengthen the power of shaming. Therefore, the SCS blacklists are much more effective than, for instance, European debt pillory in the Middle Ages. The effectiveness is based, at least partly, on the large-scale disclosure of personal information. However, with the increasing public awareness of privacy protection and the recent issuance of China’s Personal Information Protection Law, the institutionalized debt shaming will be confronted with conflicting objectives.

Power asymmetries embedded in the SCS result in two main concerns: a challenge to provide an adequate “Lao Lai” justification and a lack of fairness, undermining the blacklists’ and the labels’ authority and weakening their effectiveness. This conclusion is supported by our interviews. When participants were asked about the (potential) utilization of the SCS, such as the search function, nine participants said they would not use the system as they did not think the label could reflect an individual’s integrity comprehensively.

The SCS is confronted with problems of stigmatization, outcasting and discrimination that are commonly caused by shaming and labeling (Braithwaite 1989; De Haan 2013; Waldman 2013). These negative effects could be exacerbated in Chinese society due to the group-oriented culture and the culture around the concept of face. This is particularly problematic for the “passive-type Lao Lai”, who may struggle to make positive changes due to the restrictions on accessing a wide range of resources and their bad reputation. In this sense, the mechanisms of shaming and labeling aggravate rather than alleviate the difficulties faced by private enterprises in accessing financing. In turn, this may lead to unwanted results that are contrary to the intention of the SCS to promote economic development. The SCS also adopts a credit-repair mechanism aiming to remove stigma. According to this mechanism, once the legal obligation is fulfilled, the person is removed from the blacklist and his/her personal information will no longer be publicly displayed (National Development and Reform Commission 2021). However, even with this mechanism, the SCS blacklists can hardly be counted as reintegrative shaming, which would focus on maintaining bonds of respect or sense of belonging (Braithwaite 1989; Wang 2021).

Our analysis also demonstrated the important role of (digital) media in shaming and labeling. As Gerbner argued, the media does not prevent or lead to crime itself, but can be the cause of exaggerated public alarm about law and order (e.g., through moral panic) and may provide support for repressive solutions (Gerbner 1970, 1995). Digital technology offers the possibility of a power shift in labeling processes (Greer and Reiner 2014). At the same time, however, it can also be used by the authoritative state actors to further their policy advantage, reinforcing the extant power relationship.