The Social Credit System (?????? shèhuì xìnyòng t?xì) is a proposed Chinese government initiative for developing a national reputation system. It has been reported to be intended to assign a "social credit" rating to every citizen based on government data regarding their economic and social status. It works as a mass surveillance tool and uses big data analysis technology. In addition, it is also meant to rate businesses operating on the Chinese market.
Video Social Credit System
Planning Outline for the Construction of a Social Credit System (2014-2020)
The Social Credit System is an example of China's "top-level design" (????) approach. It is coordinated by the Central Leading Group for Comprehensively Deepening Reforms. According to the overall "Planning Outline for the Construction of a Social Credit System (2014-2020)" issued by the State Council, the Social Credit System will focus on four areas: "honesty in government affairs" (????), "commercial integrity" (????), "societal integrity" (????), and "judicial credibility" (????). Media coverage has thus far focused mostly on the rating of individual citizens (which falls under "societal integrity"). However, the Chinese government's plans go beyond that and also include plans for credit scores for all businesses operating in China.
The Chinese government wants the basic structures of the Social Credit System to be in place by 2020. It is unclear whether the system will work as envisioned by then, but the Chinese government has fast-tracked the implementation of the Social Credit System, resulting in the publication of numerous policy documents and plans since the main plan was issued in 2014. If the Social Credit System is implemented as envisioned, it will constitute a new way of controlling both the behavior of individuals and of businesses.
The main outline often mentioned in Western news outlet stories, the "State Council Notice concerning Issuance of the Planning Outline for the Construction of a Social Credit System (2014-2020)", was issued by China's State Council on June 14, 2014. Rogier Creemers, a post-doctoral scholar at the Programme for Comparative Media Law and Policy at the University of Oxford, has posted a translation of the document.
The goal of the initiative according to the Planning Outline is "raising the awareness for integrities and the level of credibility within society." The Social Credit System is presented as an important means to perfect the "socialist market economy" (????????????) as well as strengthening and innovating governance of society (?????????). This indicates that the Chinese government views it both as an important means to regulate the economy and as a tool of governance to steer the behavior of citizens.
Among other things, the Social Credit System is meant to provide an answer to the problem of lack of trust on the Chinese market. Proponents argue that it will help eliminate problems such as food safety issues, cheating, and counterfeit goods. Building on that, China's officially defined aim is to enhance trust and social stability by creating a "culture of sincerity".
The Social Credit System will be limited to Mainland China and thus does not apply to Hong Kong and Macau. However, at present, plans do not distinguish between Chinese companies and foreign companies operating on the Chinese market, raising the possibility that foreign businesses operating in China will be subjected to the system as well.
The system has already been implicated in a number of controversies. Of particular note is how it is applied to individuals as well as companies. People have already faced various punishments for violating social protocols. The system has been used to already block nine million people with "low scores" from purchasing domestic flights. While still in the preliminary stages the system has been used to ban people and their children from certain schools, prevent low scorers from renting hotels, using credit cards, and black list individuals from being able to procure employment. The system has also been used to rate individuals for their internet habits (too much online gaming reduces ones score for example), personal shopping habits, and a variety of other personal and wholly innocuous acts that have no impact on the wider community. Criticism of this program has been widespread with the proposed system being described by Human Rights Watch as "chilling" and filled with arbitrary abuses.
Maps Social Credit System
Progress of Implementation
In 2015, the People's Bank of China licensed eight companies to begin trial credit systems. Among these eight firms are Sesame Credit, which belongs to the Alibaba Group, Tencent, as well as China's biggest ride sharing and dating firms, Didi Chuxing and Baihe.com respectively. In general, multiple firms are collaborating with the government to develop the system of software and algorithms.
While the government originally considered the Social Credit System's operation to be run by a private firm, it has since acknowledged the need for third party administration . In 2017, no licenses to private companies were granted. The reasons are conflicts of interest, the remaining control of the government, as well as the lacking cooperation in voluntary data sharing among the firms that participate in the development. However, the Social Credit System's operation by a seemingly external association, such as a formal collaborative between private firms, has not been ruled out yet. Private companies have also signed contracts with provincial governments to set up the basic infrastructure for the Social Credit System at the provincial level.
As of February 2018, no comprehensive, nation-wide social credit system exists, but there are multiple pilots testing the system on a local level as well as in specific sectors of industry. One such program has been implemented in Shanghai through its Honest Shanghai app, which uses facial recognition software to browse government records, and rates users accordingly. Some reports have stated that the ratings may use information gathered from Chinese citizens' online behavior.
As of March 2017, 137 commercial credit reporting companies are active on the Chinese market. As part of the development of the Social Credit System, the Chinese government has been monitoring the progress of third-party Chinese credit rating systems.
In March 2018, Reuters reported that restrictions on citizens and businesses with low trustworthiness Social Credit ratings would come into effect on May 1st.
Sesame Credit
Currently most developed technology is provided by the Alibaba Group's Ant Financial which operates Sesame Credit. Alibaba is China's largest conglomerate of online services, including the largest online shopping and payment providers. Sesame Credit's scoring system is roughly modeled after FICO scoring in the United States and Schufa in Germany.
In 2015, Sesame Credit published information on the methodology behind its currently running beta version.
Data Collection
The Chinese government aims at assessing the trustworthiness and compliance of each person. To achieve this, it collects data from all sources by utilizing the regulatory freedom it built: From objects and social networks, public and private institutions and offline and online. Here, data stems both from peoples' own accounts, as well as their network's activities. Website operators can mine the traces of data that we leave and derive a full social profile, including e.g. peoples' location, friends, health records, insurance, private messages, financial situation, gaming duration, smart home statistics, preferred newspapers, shopping history, and dating behaviour.
The corporate network of Sesame Credit, led by the Alibaba Group, spans over insurance, loan, historical payment, dating, shopping and mobility data. Therefore, this system is powered by "data from more than 300 million real-name registered users and 37 million small businesses that buy and sell on Alibaba Group marketplaces". Due to Sesame Credit's close collaboration with the government, it also has access to all public documents, such as official identity and financial records.
Further, this also includes all information that the Chinese government is collecting under its data protection regulation, which requires businesses to turn over their data . For example, the government already has access to the messages of WeChat's 850 million active users, China's most popular communication application. Thus, China can already access monitor most social and object data of its citizens on a continuous basis.
Data Structuring
A combination of big data, statistics and behavioral analytics sets the basis of China's Social Credit System. Automated algorithms are used to structure the collected data, based on government rules that define good and bad. What remains unclear is whether data is also structured according to its trustworthiness, to eliminate errors through fake news or unreliable sources. At Sesame Credit, data fragments are further classified into five categories:
- Credit History: Reflects users' past payment history and level of debt
- Fulfillment Capacity: Shows users' ability to fulfill contract obligations
- Personal Characteristics: Examine the extent and accuracy of personal information
- Behavior and Preferences: Reveal users' online behavior
- Interpersonal Relationships: Reflect the online characteristics of a users' friends
To date, the specifications of the algorithm that determine the classification, as well as the analytical parameters and indicators remain confidential.
Data Distribution
Sesame Credit emphasizes its strict privacy and data protection, ensured through encryption and segregation. The firm also states that data is only gathered upon knowledge and consent of the user. According to Ant Financial, users' scores can currently only be shared with their authorization or by themselves.
Data Visualization
The above-mentioned five categories that Sesame Credit classifies its data into, have different weightings attached to them. Based on those, an algorithm determines a citizen's final citizen score, ranked among others. The scores in the ranking range from 350 (lowest trustworthiness) to 950 (highest trustworthiness). From 600 up, one can gain privileges, while lower scorers will revoke them. According to current plans, the final score and ranking will be publicly available.
Control Factors to Monitor and Evaluate the Behavior of Citizens
As shortly mentioned above, the Social Credit System, as developed by Sesame Credit, is based on certain variables, among these are: payment of invoices, ability to honor stipulated contracts, personal preferences and behavior and interpersonal relationships.
Payment of Invoices
As well as traditional social credit systems (formerly Schufa in Germany, or FICO in the US) the Chinese system will include and evaluate information in function to the ability of each Citizen to punctually meet their financial obligations. In this regard, a person who pays his bills on time can be considered as reliable and solvent. For this reason he/she will receive a higher score.
Ability to Honor the Stipulated Contract
A second factor taken into consideration in this model concerns the ability of each individual to fulfill his/her duties as defined in the stipulated contracts. For example, an individual with a conspicuous level of savings will receive a higher score than a person who is struggling to get to the end of the month.
Personal Preferences and Behavior
Behavior on online purchasing portals such as Alibaba, offline shopping trends paid through Alipay, social interactions on WeChat, Baidu's online history, mobile phone position as well as many other factors can give an all-encompassing idea of the personality of each citizen. For example, a user who buys diapers is very likely a parent, and it can be inferred that as such he is also a more responsible citizen. On the contrary, a citizen who spends huge sums for online games could be considered more lazy and less productive for society.
Interpersonal Relationships
Finally, the Chinese system will not just analyze the behavior of an individual. Inspired by the saying "God makes them and then mates them", the score of each individual will also be influenced by the behavior of the people closest to the individual in question. For example, a person who infringes one or more laws of the Chinese Communist Party will also negatively affect the people connected to it.
Implications for Chinese Citizens
Punishment
From the program, the Chinese SCS will be fully implemented starting in 2020 and will be made mandatory for every citizen. Once implemented, every citizen will be rewarded, or punished, on the basis of their behavior. Some types of punishments can be: flight ban, exclusion from private schools, slow internet connection, exclusion from high prestige work, exclusion from hotel, registration on a public blacklist.
Flight Ban
Currently, the flight ban for people is already common practice in China. In the future, if a person's score falls below a certain threshold, this person may be limited in his movements. By May 2018, the government had blocked people from 11 million flights.
Exclusion from Private Schools
If the parents of a child score below a certain threshold, their children would be excluded from the best schools in the region.
Social status
Also important, your personal score could be used as a social symbol on social and couples platforms. For example, China's biggest matchmaking service, Baihe, already allows its users to publish their own score.
Social credit for businesses
For businesses, the Social Credit System is meant to serve as a market regulation mechanism. The goal is to establish a self-enforcing regulatory regime fueled by big data in which businesses exercise "self-restraint" (??????). The basic idea is that with a functional credit system in place, companies will comply with government policies and regulations to avoid having their scores lowered. As currently envisioned, companies with good credit scores will enjoy benefits such as good credit conditions, lower tax rates, and more investment opportunities. Companies with bad credit scores will potentially face unfavorable conditions for new loans, higher tax rates, investment restrictions, and lower chances to participate in publicly funded projects. Government plans also envision real-time monitoring of a business's activities. In that case, infractions on the part of a business could result in a lowered score almost instantly. However, whether this will actually happen depends on the future implementation of the system as well as on the availability of technology needed for this kind of monitoring.
See also
- Credit score
- Mass surveillance in China
- Meritocracy
- Nosedive
- Public records in China
- Reputation system
- Surveillance capitalism
- Untouchability
References
Further reading
- The gamification of trust: the case of China's "social credit" - http://www.emeraldinsight.com/doi/full/10.1108/MIP-06-2017-0100
- Propaganda Games: Sesame Credit
- Archive of articles and Primary Sources on Social Credit
- A Collection of Legal Documents on China's Social Credit System
- China's Social Credit System: A big-data enabled approach to market regulation with broad implications for doing business in China
- Cashless Society, Cached Data: Security Considerations for a Chinese Social Credit System
Source of article : Wikipedia
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