A Study On China's Trust Problem

Trust has great significance to social life, especially to the achievement and maintenance of democracy as well as economic growth. In Chinese traditional culture, honesty and creditability is a basic element of the moral system. However, there are still many problems that need to be explained. For example, why this moral obligation does not indiscriminately apply to all individuals in the real social life? Why the government officials often do not comply with prior commitments? Why China is still able to maintain a high level of social trust even if we are living in a Credit Crisis? In this dissertation, we try to provide answers for these fundamental issues about Chinese social trust.Firstly, the dissertation introduces the researching background, especially the fact that the lack of honesty and creditability exist in all areas in China. Then, based on the review of existing related literature, we present the motivation and the main content of this dissertation. In chapter two, based on the literature of social psychology, sociology and economics, we sort out the definitions of trust in different disciplines, and illustrate the nature and classification of trust. In chapter three, after discussing the "prisoner's dilemma" which is the result of "opportunism", we explore the necessary condition that the reputation mechanisms can play a role through a game model, and give a comprehensive overview of the thoery of reputation. In chapter four, we discuss the traditional Chinese society's culture, politics and economy as well as its impact on social trust. By employing an evolutionary game model, we explain the trust pattern that people in China may mainly trust the person who have private relationship with themselves. The results imply that such a trust pattern in China is not determined by the choice of the society or the politicians. It results from the conscious learning process of the people in the social life. Chapter five investigates the honesty and creditability of the current China's local governments. We argue that promotion tournaments, as an incentive system governing Chinese local officials, have a critical impact on the honesty and creditability of the governments. Because of the promotion tournament, some indicators which are not easy to be measured is excluded out of the evaluation system. This lead the government officials not to comply with prior commitments and neglect the general public interest demands in order to seek the short-term interests. On the contrary, they are more concerned about the short-term economic growth even the society needs to pay an expensive cost for this growth in the future. Chapter six discusses the current situation of social trust in China and the reasons for this situation arising. By employing the data of WVS, this chapter investigates the determinants of general trust in China and explains "China's Trust Puzzle". The results imply that:(1) the general trust level in China has the obvious generation difference; (2) the education not only has important influence on trust but also shows the largest marginal effect among all factors; (3) the factors of optimism, which I believe free to choose and control own lives, show an effect on general trust that can not be ignored; (4) individual subjective feelings is an important determinant of general trust. Meanwhile, the dissertation also proves that the last three factors are the key points for explaining trust puzzle in China except the factor of social homogeneity.After reading and explaining the issues of China's social trust through historical, cultural, economic, and political perspectives, in order to make China's social trust level to maintain a high level, we propose the following suggestion:(1) establishing a parallel development model of government and non-governmental organizations by deregulation and providing a corresponding financial support to non-governmental organizations; (2) promoting the establishment of a market system which is based on fairness and justice-oriented; (3) speeding up the political reform which the goal is democracy and the rule of law.