Tea Leaf Nation

What Will China's National Security Commission Actually Do?

The four functions of China's top national security body.

On May 6, China published its first national security blue book. The book outlined problems Beijing sees itself facing in internal security -- including Western nations cultural hegemony threatening China's socialist values, terrorism, and the "export" of Western democracy threatening Chinese ideology, among others. Perhaps more importantly, it outlines the role of China's National Security Commission. Announced in November, helmed by China's President Xi Jinping and influenced by the United States' National Security Council, little is known about what it will do or how it will operate.

Here are the Commission's four functions, according to a web article about the blue book in the Communist party mouthpiece newspaper The People's Daily, edited and condensed from clarity.

Planning and carrying out strategies for national security. In the past, since China didn't have an official national security strategy, the military strategy was part of the national security strategy. But as the foreign and domestic security situation becomes more complex, military strategies are becoming increasingly insufficient for China's overall security needs -- which demand macro-level planning and guidance. Thus, the Commission's first and foremost responsibility is to plan and carry out urgently needed national security strategies.

Pushing forward the construction of China's national security legal system. An important task of the NSC is to improve China's national security legal system by introducing laws in the realms of military, politics, foreign policy, economics, culture, technology, information, environment, intelligence, among others.

Planning general and specific national security policies. These include policies that crack down on the "three forces" of terrorism, extremism, and separatism; policies related to sovereignty, territorial disputes, and maritime interests; and policies related to information and cyber security, space security, maritime security, and the security of neighboring regions.

Studying and solving the major issues in national security. Previously, different organs had separate responsibilities when responding to major national security incidents. But in recent years, all major incidents, such as the terror attacks the "three forces" launched in the regions of Xinjiang and Tibet, have been multi-faceted. They all have profound connections to international actors, so relying on only a few powerful domestic organs is not enough. Intelligence and foreign affairs organs should cooperate closely. There will be more incidents like these in the future.

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Tea Leaf Nation

Why There Are No Credit Scores in China

The government has a plan, but the shadow of Mao-era abuses still looms.

HONG KONG — Few would dispute that Chinese society suffers from a serious trust problem. After surviving crafty scams and shoddy products for years, Chinese people have become guarded with strangers and cautious in business dealings. Given all that, it would be tempting to celebrate the fact that, according to a May 5 report in Chinese state media, the powerful National Development and Reform Commission (NDRC) has signaled that a nationwide electronic system will be established by 2017 to track each Chinese citizen's credit history. This would include performance on meeting obligations connected to taxation, government transactions, finance, judicial matters, and traffic violations. But for the system to succeed, Chinese people will eventually need to buy in -- and so far, that's not happening.

China's economy, of course, still manages to function without a credit-scoring system. Chinese banks, all of which are state-owned, limit most of their lending to large businesses (preferably state-owned enterprises) and high-net-worth clients who have made significant deposits. Debit cards are far more common than credit cards. Urban residents can usually obtain collateralized loans for real estate and automobile purchases, but those without assets are left in a lurch. When faced with emergencies like a large medical bill, most Chinese families cannot pull out credit cards; instead, they draw down on their savings accounts or borrow money from loved ones. Similarly, small and medium-sized private businesses in China have often had to rely on the so-called shadow banking system to raise money, which despite the nefarious moniker, simply involves raising capital outside the formal bank loan system through personal connections or off-balance-sheet loans.

In theory, the proposed nationwide credit-scoring system would further grease the wheels of China's growing market economy by rewarding the punctual and punishing the dishonest. In a May 5 article published on the Weibo (Chinese Twitter) account of CCTV, China's state-owned television station, economist Dai Xianfeng opined that such a system would "lower transaction costs," "improve economic vitality," and make individuals' lives better by enabling them to obtain credit cards, lower-rate mortgages, and other financial products.

But many of China's Internet users are worried less about the trustworthiness of other citizens and more about the trustworthiness of the government that would steward the new system. According to the timeline announced by the NDRC, by June 2014 the government will introduce a plan to assign unique credit-tracking numbers to Chinese citizens, likely based on the current identity card number that each adult already possesses. (It would do the same for companies and organizations.)

The proposal invokes unpleasant memories of a Kafkaesque system that began under Chairman Mao Zedong. Under the Communist Party, a mysterious dang'an, or file, on each urban resident recorded political, administrative, or personal transgressions and followed everyone for life from schools to work units. As then-New York Times Beijing correspondent Nicholas Kristof reported in 1992, dang'an was a "part of China's complex system of social control and surveillance," but it had started to lose relevance even then as Chinese become ever less reliant on the party for job placement and mobility. These days, while dang'an may still matter to ambitious party members, the system no longer holds the sway it once did over ordinary people. In 2013, CCTV published a special report called "Is Dang'an Becoming a Pile of Wastepaper?" in which a casual online survey revealed that 74 percent of respondents believed that dang'an had no relevance to their lives.

Some in China worry that the new credit system now threatens to revive the intense control that authorities once exercised unchecked. One Weibo user commented called the idea "dang'an by another name" and asked whether those with oversight of the new system would be trustworthy. "Will individuals know what is written about them?" Another hoped that "political factors would not be a part of the system" because it could be used against those who disagree with the party line. Many Internet commentators also worry that in cases of stolen identities or clerical errors, ordinary people would have little recourse to clear their names.

These are not idle anxieties. Abuse of the dang'an system was exposed in the widely publicized case of Tang Guoji, a man from central Hunan province who had graduated from a teacher's college in 1983. Tang discovered in 2002 that the reason no work unit or graduate school had been willing to take him for the past 20 years was a mysterious piece of paper in his dang'an that declared him mentally unstable. The document had been placed there by college advisors who held a grudge against Tang for blowing the whistle on management problems at the school. Tang had no idea this damning evaluation existed at all for almost two decades, even after years of petitioning the government for job placement and fair treatment, to no avail. Tang eventually began a career as a successful freelance writer, but the damage to his life was immeasurable.

Internet users also muse about the irony that Chinese officials, widely perceived to be corrupt and untrustworthy, are tasked with keeping credit files on citizens. Ye Tan, a columnist for Caijing, a top financial magazine in China, commented that the credit system should "start with the government" because "having a record of the trustworthiness of the powerful is more important in promoting a market economy than keeping records on ordinary people."

This anxiety also has a basis in fact. China's well-connected have sometimes shown themselves willing to fabricate files in their dang'an for personal gain. In June 2004, a midlevel cadre in northwestern Liaoning province named Cao Zhongwu was sentenced to death for corruption and falsifying official documents after it emerged that he had created fake documents and certificates to supplement his dang'an for about seven years in order to gain promotions. By the time he was caught in 2001, Cao had embezzled about $250,000 and taken $150,000 in bribes. (He was executed in September 2005.)

Of course, online vitriol alone may not be enough to derail a much-needed development from coming to pass. But authorities surely monitor web chatter to gauge public opinion; if the government is ambivalent or internally divided about the scope or timing of a new credit system, online outcry could tip the scales. During the November 2013 party plenum, President Xi Jinping called for the market to play a "decisive role" in China's economic life. Perhaps it would be best for the government to follow its own advice and hand the credit-scoring business to private enterprise instead.

Photo: AFP/Getty Images