The complex truth about China’s social-credit system

The complex truth about China’s social-credit system

China’s social credit system will not be the first in the world, but it is a step towards making it a global standard. It’s not as easy as giving everyone a score.


China’s social credit system is often compared to Big Brother, Black Mirror and any other dystopian futurist sci-fi writer can dream up. Reality is much more complex and, in some cases, even worse.

Social credit was first introduced in 2007 by the government. It was initially announced as an opt-in program in 2014. There is a distinction between the official government system as well as the private, corporate version. However, the scoring system for the latter, which includes friendships and shopping habits, is often confused with the former.

British people are familiar with credit checks. Data brokers like Experian track the time we pay our debts and give us a score that can be used by lenders or mortgage providers. Social-style scores are also available. Anyone who has used eBay to shop online has a rating on shipping and communication. Uber drivers and passengers rate each other, so if your score is too low, it’s not good news.

China’s social credit system extends this idea to all aspects, judging citizens’ trustworthiness and behavior. If you are caught jaywalking, don’t pay a bill to the court, or play too loud music on the train, you may lose your rights such as the right to book a train ticket or flight. Mareike Ohlberg is a research associate at Mercator Institute for China Studies. “The idea itself, however, is not a Chinese phenomenon.” The abuse of aggregated data to analyze behaviour is also not permitted. She says, “But if [the Chinese] system does come together as envisioned it would still be something very special.” It’s unique, but it’s also part of a global trend.

What is China’s social-credit system?

The system was revealed in a 2014 plan. However, some pieces are already in place. The Chinese government seems to have set a 2020 goal to put the rest in place.


There is no single social credit system. Local governments operate their own social records systems, which work differently to the private version that is operated by companies like Ant Financial’s Zhima Credit (also known as Sesame Credit). Ant Financial is the payment company that was created out of Alibaba. These systems are based on shopping habits and other data, to calculate credit-style scores. Ohlberg states that there is no one, national coordinated system. The pilots that exist are not all coordinated in the same manner.



The government plans are often confused with private systems like Ant Financial’s Sesame Credit. However, they don’t belong to the official system. It is possible to confuse matters further by stating that the government will likely collect data from private companies in the future. Some data has already been used in government trials. Sesame Credit claims that this can only be done with consent from the user.

Ohlberg says that this leads to confusion about what the social credit system is. She says that some media took private pilots like Sesame Credit and presented them as the social credit system. It isn’t officially part of the system and doesn’t hold a license. However, the pilot has been approved and encouraged to fly, but it could be closed down by the government. It kind of rides on social credit fashion.”

She says that it is troubling when these private systems are linked up with the government rankings. This is already happening with pilots. Ohlberg says that there will be a memorandum or understanding between the city and Tencent and Alibaba about data exchanges and inclusion in citizen assessments. This is a lot data collected without any protection and with no transparency as to how it’s processed to give a score or ranking. However, Sesame shares some details about the types of data used.

What is the working principle of social credit?

The government system should eventually be national, with all citizens and businesses being given an “unified social code” and citizens having an identity number. All of this will be linked to a permanent record. Hoffman explains that if you are able to access a credit China website and have a credit code for an entity, you can use this code to pull up credit records. Individuals will have ID-linked code. She says it’s more like a record than a score.

Reports talk of a blacklist. This is part of the official government’s social credit system. It means that if you owe money to the government, for instance, you may lose certain rights. There is a big difference between having a low score on social credit and being blacklisted by government officials, for example, refusing to pay a penalty.

Ohlberg notes that the criteria for a social credit ranking are determined by where you live. She says, “It’s based on where you are in, because they’ve their own catalogs.” This could include not paying fines if you are deemed fully capable, misbehaving in a train or taxi, driving through red lights, and even failing to pay any fines.



One city, Rongcheng gives residents 1,000 points to get started. Bad behaviour, such as traffic violations, is deducted by the authorities. Good behaviour, such as giving to charity, gets you 1,000 points. Recently, Ohlberg read a regulation that specifically addressed theft of electricity. You’ll need to be caught first, or reported by someone else. Ohlberg points out that facial recognition is often used to identify jaywalkers. However, it can be done in certain cities, Ohlberg says.


Private projects like Sesame credit collect data about its 400 million customers. This includes information such as how often they play video games (that’s bad), and whether or not they are parents (that’s great). This data can be shared with others. Sesame Credit partnering with Baihe Dating Site is one famous example. This allows potential partners to judge each other based on their looks and social credit scores. It is opt-in.

Participation in both the government and private versions of the social credit system is voluntary at the moment. However, it will soon be compulsory. There is plenty of pressure to participate now, however. Hoffman points out that there are both incentives to participate and disincentives to not.

What happens if your name is blacklisted?

Liu Hu is a Chinese journalist who writes about government corruption and censorship. Liu was arrested, fined and blacklisted for his work. Liu discovered that he was listed on the Supreme People’s Court’s List of Dishonest People Subject to Enforcement as “not qualified” for buying a plane ticket. He was also banned from traveling some train lines, purchasing property or taking out loans.

“There was no filing, no warrant from the police, and no official notification. He said The Globe and Mail that they had just taken me out of the rights I once had. It’s scary because there is nothing you can do. No one can help you. You’re stuck in the middle.

What are your options? Jing Zeng, a researcher at University of Zurich, said that if you wish to be removed from the blacklist you have two options. You can either pay the bill or appeal to court. She says, “Bring your money and you will be removed from the system.” “It’s not an independent judicial system, but it’s still the court that you [appeal] to.”


Hoffman says that the Chinese justice system is not perfect. She says that there are not enough protections in place for people and entities who are subject to the system.

“The rule of law is not a concept in China.” When the Communist Party of China uses regulations for political purposes, they can appear largely apolitical. April 2018,. The Civil Aviation Administration of China sent letters to international airlines requesting that they recognize Taiwan as part of China. They warned them that the government would “make an official record of your company’s serious dishonesty” and will take disciplinary action against any who don’t comply. All of them did. One pilot from the Civil Aviation Industry Credit Measures was responsible for the pressure on the airlines.


Ohlberg points out that there is the possibility of abuse of power and the knock-on consequences of statewide surveillance. There are also the chances of inaccurate data. Ohlberg also notes that a few poor marks on a credit report could lead to a downward spiral.


Although it can vary from program to programme, a positive rating in some pilots means that they get discounts or other benefits such as a simplified bureaucratic process. You may be required to complete additional paperwork or pay fees if you have a low rating. She says, “Once your rating is low, it can make it difficult.” “I see a tremendous potential for a negative spiral.” This system could further divide society by creating classes of people based on their social credit — this is where Black Mirror and other similarity emerge.

This is why China is building it.

The Chinese government says it’s all about trust building. In the 2014 document, the government outlines its plans. It notes that trust-keeping is not sufficiently rewarded and therefore the costs of breaking it tend to be low.

Ohlberg says trust issues are common in Chinese society, whether it’s food quality scandal, pollution or workers not being paid their wages. She adds that the system can be used to enforce vague laws such as endangering national security and unity. Zeng said that this could include product quality and food safety, which are major problems in China. She says, “It’s an enormous problem in Chinese society.” “They punish companies for this type of bad behavior.”

Ohlberg says that it could also help to build other means of financing credit. Many Chinese people do not have credit ratings and live in financial systems. She says that some of the early pilots of the new social credit system, which preceded the 2014 major policy plan, were actually creating a rural social credit system. “The vast majority of those there wouldn’t have any financial banking data.” A social credit system could be used by businesses for micro-enterprises, which cannot be evaluated using traditional criteria.

Hoffman doesn’t buy that argument. She says such a system is all about government power. She says that if solving problems was the ultimate goal of the CCP, social credit would not be necessary. “China’s social-credit system is a state-driven program that’s designed to accomplish one thing: to expand and uphold the power of the Chinese Communist Party.”

She says that social credit, a tech-enabled method to link political power with social and economic development has been discussed in the country ever since the 1980s. It’s an automation of Chairman Mao’s Mass Line — a term that describes how the party’s leadership managed and shaped society. Hoffman says that the Mass Line in Mao’s China relied on ideological mass mobilization using Mao Zedong’s charisma to force participation. “After the Mao era, the CCP couldn’t rely on ideological mobilization as the main tool to operationalize social management,” Hoffman says.

Are there other than social credit?

China’s social credit program is in development, but it’s only one aspect of its surveillance state. There are strict controls on web content that is accessible through China’s national firewall. However, social media is subject to monitoring and censorship.

Researchers at the University of Hong Kong discovered that Weibo’s and Wechat’s critical posts were deleted ahead of the 30th anniversary of the Tiananmen square protests. All major video platforms turned off comments stating that system upgrades were required. Crackdowns were also made on the use VPNs which can help to protect privacy online.


Advanced facial recognition systems have been developed by the country that can track people across entire cities. Chinese officials, working with BBC News, demonstrated how they could locate and find one of their reporters in just seven minutes. As the nation’s 170 million CCTV cameras were leveraged to track John Sudworth, his movements were also monitored.

Even more concerning is the fact that the region of Xinjiang in the north west has been used as a testing ground for China’s massive digital control operations. Particularly, the Uighur minority is being monitored and discriminated against. More than 500,000 faces of Uighurs were scanned.

What does this all mean for China?

It is difficult to assess the full impact of social credit on Chinese citizens. This is simply because the system has not yet fully developed. Zeng believes that reality lies somewhere in between government claims and Western media’s descriptions of dystopias filled with horror. She described the progress made so far as “very much like a babystep.”

Ohlberg acknowledges that the early reporting was flawed and led to misunderstandings of the system. However, that doesn’t make social credit any less dangerous. She says, “It’s somewhere in between the people that say the media coverage was inaccurate and that it’s not so terrible and the people seeing this huge dystopia.” “You need to find the space in between where you can explain it is scary even though it’s not as it’s being portrayed.”

Hoffman says that this idea should not be considered by any other country. Hoffman states that the west should not replicate any aspect of social credits. Many people draw parallels between Uber’s rating system for drivers and customers, and private applications such as Uber. These private company systems, while I find them extremely problematic, are fundamentally distinct. The People’s Republic of China, a dictatorial country, is home to the Chinese Communist Party. They have been responsible for human rights violations that have been going on for decades. Just look at Xinjiang. The social credit system is not something that any liberal democracy should attempt to copy.

Last update 24.01.19 at 11:20 GMT: Ant Financial does not own the Sesame Credit system.


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