by David Balaban

Several years ago, the Government of China decided to create a Chinese Social Credit System that will give all of its 1.4 billion residents a “social credit score.”

The Chinese Social Credit System was introduced in 2014 and it is meant to be nationwide by 2020. Individuals and businesses should be tracked and rated by this program. Once this program is completed, every Chinese resident will have a searchable file of combined data that will be presenting his\her social credit score. This program is not fully operational as of now, as the Government of China is making an all-out effort to unite local databases.

As stated by the Chinese news agency Xinhuanet, which plays the role of the official press agency for the government, this effort covers four different areas, including business activities, administrative affairs, the judicial system, and social behavior. The Washington Post noted that Chinese government wants to gather all pieces of information available online on the country’s citizens and companies in one place.

How the national reputation system works

In simple terms, people will receive points for good deeds and have points taken off for bad deeds. Millions of surveillance cameras scattered around the country will follow people. For example, points will be deducted if you are caught littering. If your bad actions get recorded by cameras, the points will be automatically deducted. At the same time, if someone cleans it up (after you) a point will be added to his\her social credit score. The nastier the actions, the higher the point change is going to happen. All this was reflected in movies like Nosedive but now it is coming to real life.

As stated earlier, the Social Credit System will start functioning in full by the year 2020. However, there is not much technical information available on how this system will actually work. Several trial versions of this social credit system has been tested suggesting how the Chinese Government is planning to go ahead with this scheme.

Possible benefits and punishment
Citizens who will manage to earn a high rating will be appreciated and rewarded. This will include:
People will be able to rent a car or book hotels without upfront payments or deposits.
They will be able to go on vacation to foreign countries without any restrictions.
Faster security inspection at rail stations and airports will be also exclusively available.
People with higher score will be rewarded with lower interest rates.
Even dating sites and apps are going to provide you with more matches.

However, people with lower social credit score will be get penalties and sanctions:
No soft sleeper train tickets, only hard sleeper.
People might be barred from premium rooms in hotels.
Restrictions may be imposed on people from sending kids to better schools.
People might be forbidden to travel abroad.

The concept of social credit came into being as a direct outcome of the people’s distrust of the government and other officials. In addition, those in position of authority want to regulate the previously chaotic economic boom that starts to slow down.

Moreover, China is shaken by scandals arising around corrupt officials, bribery and human exploitation within the labor market. These are real problems and they need to be addressed. Ambitious as it appears the Social Credit System is an attempt to make real changes in every aspect of the Chinese social life. According to the Communist Party statements, the objective is to nourish a culture of sincerity, trust, and harmony.

However, a lot of Chinese people are already protesting in social media drawing similarities with Good Citizen Cards issued by the Japanese army that occupied China during the World War 2. There is also an opinion that new social credit system turns society upside down – citizens have to grade officials, not vice versa.

The Suining county experiment
A pilot project was carried out in 2010 by the Communist Party in Jiangsu province’s Suining county near Shanghai. Besides getting penalty points for relatively negligible activities like driving offenses, people lost points for:
Triggering a disturbance by illegally petition authorities for help – 50 points.
Not giving proper attention to elderly relatives – 50 points.
Becoming a member of a cult – 50 points.
Accusing someone falsely on the Web – 100 points.

On the other hand, a person with good standing, or being a hardworking employee, may earn 100 points and add it to his total score that could reach a maximum of 1000 points.

After calculating the total number of points obtained by each person, people were granted a rating: A, B, C, and D. D-class citizens were disallowed from getting government support, getting a loan, or even applying for jobs. People tried to oppose the system. They sabotaged web services by using VPN tools seeking to escape total control at least online. It was the public outcry that forced the government to discontinue the pilot program. Although citizens are no more given A – D rankings, local officials still assign credit scores to people.

Sesame Credit

Sesame Credit is another social credit system carried out by Ant Financial Services Group -Alibaba’s financial wing. Alibaba has over 400 million active users and is considered to be world’s largest marketplace. Information collected from different sources like users’ shopping activities and social media behavior is used by Sesame Credit. After analyzing this huge data set, numerical values are generated by utilizing the power of state-approved AI algorithms. This value is then used by different companies in China to figure out the social credit score of a person. Although different in many aspects (like discount shopping), Sesame Credit score is close to the American FICO system and may impact when applying for loans. Absolutely voluntary, this system currently receives positive response from users.

Foggy future
It looks like the Chinese government is determined to go ahead with its plan to build a national database and assign a social credit score to each individual. Chinese authorities are closely watching the successful attempts of the Sesame Credit and at the same time evaluate drawbacks of the Suining county experiment.

Still, there are plenty of logistical and technical issues to be sorted out first before this project of the Communist Party manages to gain traction.

One of the biggest problems that this social credit system is facing are concerns that Communist Party is sensitive to criticism. The public outcry like happened with to the Suining County experiment may have a far-reaching impact on the entire process and the program can be stopped at any time. So, the only thing we can do is monitoring how events develop in China.

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