The Chinese Social Credit System: A look into the future?

By Otilia Rose-Marie Meden

While looking for ambitious ideas about the future of the tech-hub in Silicon Valley, China is, in all silence, taking over the world’s leading role in regards to technological advancement. This development is a premise for China’s national Social Credit System (SCS). In June 2014, the Chinese Communist Party (CCP) announced that the SCS would be rolled out by 2020. The guiding principle behind the system is to encourage trustworthiness and punish untrustworthiness within the Chinese society. The SCS aimed to be run by AI and big data surveillance, shall assess and regulate the financial, political, and social behaviors of every citizen and company in the country. The underlying mechanisms for such control are rewards and punishment. Thus, the SCS has often been portrayed as the fictional dystopian Black Mirror TV-episode ‘The Nosedive’ and former American Vice President, Mike Pence, referred to the SCS “an Orwellian system premised on controlling virtually every facet of human life”. However, the reality – especially in China – is always more complex and less dramatic.

According to Chinese researchers who are designing the SCS, the system is supposed to operate as an ‘ecosystem’ interconnected by an invisible web of information. Today, particularly the sharing of information systems remains underdeveloped and is challenged in various ways. Since 2014, 43 cities have launched SCS pilot projects where central guidance ensures that the framework remains similar at national and local levels. However, variations occur. China’s eastern province Rongcheng is one of the model cities and thus one place where the future of the SCS seems visible. The city’s 740,000 adult residents participate in the ‘Rongcheng Social Credit System’. They have initially been assigned 1,000 credit points and from here, the math begins. A traffic ticket costs you five points. A heroic act, such as helping your family in unusual tough circumstances or doing exemplary business, boosts your score by 30 points. Credit can also be earned through donating to charity, voluntary work, giving blood, or donating bone marrow. Depending on the credit score, the individual holds a grade ranging from A+++ to D. Triple-A citizens are rewarded with perks such as more advantageous terms on bank loans and heating discounts every winter. The kind of penalties that await the discredited residents are meanwhile not listed anywhere. Even though the system theoretically extends to every part of people’s lives, most don’t even know it exists. This fact is the case for many other Chinese cities’ pilot projects. The pilots display how many of the national-level challenges are present in the everyday implementation of the system. The technological platforms in which information is interconnected is simply not yet developed to an extent where it can operate at a national level.

Another challenge to further advancement of the SCS is the fragmentation of the local and national setup of the system. Each local ministry has, like Rongcheng, implemented their own political priorities and practices into their credit scheme and each of these local credit systems further constitutes fractions of the SCS as a whole. This leads the SCS to fragmentation where stark differences in reward and punishment applications dominate. What behavior may lead to a poor credit score in one city may not in another city. This fundamental challenge is going to be difficult to combat for the CCP since President Xi Jinping has stated that local autonomy is highly prioritized in the continuous development of the SCS. On the other hand, the CCP aims for centralized and consolidated power, and the SCS is an important mechanism that will ensure that those keeping trust receive benefit in all respect, and those breaking trust meet with difficulty at every step”. At least for now, this remains an ambitious idea. Whereas on a local level, the data collections are focused on encouraging trustworthy behavior of the citizens. The data being collected on a national level are mainly being used to enforce existing laws and to develop financial credit rating. Therefore, the fragmented and staggered implementation of the SCS seems to be here to stay.

In China, people commonly fail to pay workers, defy court orders, and default on their debts and thereby undermining the credibility of the Chinese legal system. To remedy this, the blacklists – one of the more controversial aspects of the SCS – were introduced in 2013. The blacklists consist of peoples’ names who have defied court orders and failed to pay debts or fines. The penalties from being on the blacklists can include prevention from buying plane and bull-train tickets or staying in luxury hotels as well as joining the civil service. The blacklists are not to be confused with one’s actual credit score. The blacklists are regulated by state authorities and the actual credit scores are promoted by local ministries in cities such as in Rongcheng. This lack of unified standards for data infrastructures between how behavior is assessed on a local and a national level slows the process of implementation of the SCS even further.

Though a truly big data and AI-driven SCS is far from implemented, the system is an essential component of the CCP’s data-driven governance and holds a valid perspective on the future to come. The State Council has laid out its vision of becoming a world leader in AI by 2030 for two main reasons, the SCS rather than being the end might just be one of the means to meet this goal. First, the SCS enables the government to gather an enormous amount of data of the almost 1,4 billion Chinese citizens. These big data archives both sustain and accelerate the advancement of AI technology. Second, Chinese tech giants are playing an increasingly important role in the SCS. Close cooperation between state authorities and tech firms has driven innovation and growth further resulting in significant progress in online monitoring and almost nationwide surveillance coverage. The underpinning vision, according to the CCP, is to ensure the people’s trust in the government and to bring China into a new era of ever-expanding development. Thus, this is the reality in China; instead of resembling a fictional dystopia, it may leave us with a look into the high-tech future. A future that is both truly inspiring and equally terrifying.

The views expressed in this article are the author’s own, and may not reflect the opinions of the St. Andrews Economist.

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