Techno-Regulation in China: How are Bavarian Firms Faring Under the Social Credit System?

The authors of the study investigate the influence of the Chinese social credit system (SKS) on Bavarian companies. The SKS is part of a comprehensive initiative by the Chinese government under Xi Jinping to enforce rules and regulations. The research team analyses how large, medium-sized, small and smaller Bavarian companies active in China are classified and evaluated in the SKS.

The system's most important categorization mechanism consists of entries in registers and lists that rewards the behavior of companies and individuals (redlisting) or is liable (blacklisting and so-called administrative penalties). The analysis of 170 Bavarian companies in China shows that these investors are largely recorded on red (positive) lists. However, almost nine percent of companies have a negative system entry in the form of administrative penalty, which may lead to an entry on a blacklist.

In addition, there are significant differences in the implementation of the SKS by the individual local authorities. In Shanghai and Jiangsu, two provinces where numerous Bavarian companies are based, particularly high activity can be observed among the authorities in the areas of environmental protection, work and occupational health and safety. This cannot be observed in Beijing and Guangdong, where many Bavarian companies are also located.