The Social Credit System in China

What do you know about China’s social credit system? Scarily similar to an episode from Netflix series “Black Mirror,” this system owns personal data on all of China’s native inhabitants.

Nowadays, it’s not news that certain technology companies control the big data containing our daily habits, hobbies and preferences, but try to imagine that the government uses this data to analyze and assess individuals’ and businesses’ social reputation—or credit.

For example, doing volunteer work and donating blood will increase credits; while falling behind on payments or a mortgage, violating traffic rules, or playing excessive online games will reduce credits. People with high scores can enjoy better social privileges and economic benefits. Low scores on the other hand, could even get you blacklisted from accessing certain services, such as flights or train travel.

This is a system that China is trying to build and secure by 2020. It was as early as 2014 when China’s State Council issued an outline for the national social credit system (SCS), aiming to place the basic structures in preparation. With 2020 approaching, what has the government done so far?

Until now, it is clear that China’s SCS will be an “ecosystem” of various scores and blacklists run by government agencies and private companies. The recent implementation of the “unified social credit code” for all companies and organizations registered in Mainland China, is considered the foundation of the national SCS. From having different numbers issued by different government agencies, to presenting only one ID, the unified social credit code not only makes the process of company registration more efficient, but also makes a company’s information more transparent. Anyone can check any company’s credit online by using the company name, legal person’s name or the code.

5.4 million high-speed rail trips and 17 million flights had been denied to prospective travelers who were blacklisted.

In the private company level, “Sesame Credit” —a private credit system operated by Alibaba’s affiliated company—is widely believed to be the current leader in China’s SCS. If you have an Alipay account, you have the Sesame Score whether you want to use it or not. With a high score, you have certain privileges such as deposit-free rentals for umbrellas, bicycles or even apartments. You can increase your scores by obtaining “Sesame Seeds” and finishing “Sesame Tasks,” which means your social credit system is entwined with the products, services and programs (especially charity related programs) and even small interactive online activities provided by Alibaba. As it turns out, Sesame Credit is more of a loyalty program than a reliable measure of credit.

Led by the central bank, China’s financial system also created an official credit system. Here in Dongguan, if you need to borrow money from a bank, you are required to print your personal credit record in the local credit reference center, showing any debts you may have. Due to the low credit card penetration in China, the central bank only obtains such data from 25 percent of the total population.

According to creditchina.gov.cn, by the end of 2018, 5.4 million high-speed rail trips and 17 million flights had been denied to prospective travelers who were blacklisted, though the exact reasons for being placed on the list are unknown. A dozen cities including Chengdu, Nanjing, Xiamen, and Huizhou are listed as the model cities of the SCS. In Rongcheng, a northern city in Shandong Province, 800,000 residents, 16,000 enterprises and 1,420 organizations are allegedly included within the system with their unique credit ID. They are given 1,000 initial points and rated into six levels: AAA, AA, A, B, C and D according to the very detailed 150 items of “plus” behaviors and 570 items of “minus” behaviors.

Some people may consider this a mass surveillance, but typically the Chinese are no strangers to this idea. Since the beginning of P.R.C., each citizen has been tied to their invisible personal “dang’an,” a paper archive recording your background, education and employment experience, which is not allowed to be viewed by the recorded person. It provides important information in job seeking, promotion and even marriage—back in the 90s you needed your working unit’s approval before you could get married.

Personally, I think China needs a system like this because in my experience, the Chinese don’t exactly follow the rules. I can recall several examples of Chinese leaving promises unkept, or cheating, for their own benefit or convenience. If social credit systems can better regulate behavior, thus presenting a better society, I don’t mind the government watching.