China's social credit system: Orwellian nightmare or a modern take on credit scores?

Posters of citizens with good scores on display in Rongcheng, Shandong. (Photo Alliance)

The speed with which China grew to become the world's second largest economy has caused a problem for hundreds of millions of citizens: they have no credit history.

While this might not seem like a big deal, it becomes one when a person wants to buy a home or car. Unless they're paying cash, they need a loan. And without credit, they can't get one.

Chinese banks are notoriously hesitant to lend money to citizens and private businesses, leading many to turn to online payday loan-style lenders.

So, the question is: how can you know whether someone will repay their debts if they have no meaningful financial history?

The answer: look at their criminal record. Look at their online activity. Look at their personal life.

Do they play video games late at night? Do they pay their bills on time? Do they have trustworthy friends? Those questions and more play into a burgeoning system of pilot programs across China that may create the country's own version, or versions, of a credit score.

One could argue that, in addition to a history of someone's credit card statements, a modern take on the traditional credit score would include a person's criminal record and job history. However, China has taken it a step further by resurrecting social surveillance mechanisms dating from the Mao era.

Variations on social credit are currently being tested in small trials across the country, by both the government and large businesses. The consequences of these programs have not been isolated to lending and credit-- they've been used to prohibit those with low scores from traveling, enrolling their children in private schools, and the chance to apply for a government job. They've also given others access to cheap loans, free health checkups, easy access to bike sharing platforms, and expedited visa applications.

While partly built to fill the country's credit history void, the social credit system is also designed to measure, reward and punish people based on their behavior.

In some government pilot programs, jaywalkers have been publicly shamed. In Hebei, the Higher People's Court developed Deadbeat Map, a mini-application inside WeChat that allows people to see the locations of nearby debtors in real time. And in Pu'an, debtors are applied a ringback tone that plays whenever anyone calls them, saying: "Hello, Pu'an County People's Court reminds you that the person you have dialed has been included in the list of discredited individuals, please be careful if you associate with him!"

It's impossible to know what parts of the test programs will be adopted nationwide. Many are not overly concerned. In some government pilots, citizens say their quality of life has gone up since the credit score was introduced. In Rongcheng, some citizens told Foreign Policy that people drive more considerately, and property prices have gone up.

"At worst, China's social-credit system will simply reproduce the problems of the existing system, complete with all the chaos and corruption it was designed to stamp out," David Fickling wrote in Bloomberg earlier this year.

Citizens' relative indifference to social credit may reflect China's history with social engineering. Shazeda Ahmed, a PhD student at Berkeley and Fullbright scholar, argues that China has monitored and tracked citizens' behavior for decades, and the social credit system is an expansion of the blacklists of the past.

The system's expansion to the online world, however, makes avoiding punishment more difficult. Ahmed writes:

Previously, people who could not purchase airline tickets through official channels if they were blacklisted might have still managed to use websites like or the in-app travel booking feature of the mobile wallet service Alipay to circumvent these restrictions. That is no longer possible.

Furthermore, the wholesale endorsement of surveillance in China leads others to believe that the social credit system could eventually enable an environment that resembles Xinjiang today, where people are relentlessly tracked and monitored, with the state security aparatus weaponized against them.


China's social credit system

October 2nd

China's social credit system has been described as a nationwide, all-encompassing personal rating mechanism, used to punish and reward citizens based on their financial history, personal contacts and even the amount of time they play video games.

In reality, the social credit system does not produce a single, nationwide credit rating for Chinese citizens. At least not yet. In fact, many people may not have a social credit score, or even know if they do.

Announced in 2014, the social credit system has been tested across a patchwork of social and consumer apps and local government pilot programs (like those already running in Shandong and Xinjiang).

The nearest thing to a nationwide score for Chinese citizens is likely the Supreme People's Court's debtors list, which contains the names of 14.5 million people with longterm debt.

The official social credit system is slated to roll out in 2020. Shortly after announcing the system, the People's Bank of China granted approval to eight private firms ($) to run their own pilot programs. Since then, local government-led ratings systems have also sprouted up across the country as well.

Five years on, the future of the system is somewhat uncertain. When it is fully rolled out, it may ultimately gather data from disparate sources that already exist-- like the debtor's list, local government data, and individual browsing histories and social media activity to compile metrics wherever available.

β€œThe social credit system is just really adding technology and adding a formality to the way the party already operates,” Samantha Hoffman, a consultant at the International Institute for Strategic Studies, told Foreign Policy.


October 16th

SenseTime is interesting for many reasons:

SenseTime specializes in facial- and pattern-recognition in images, video and audio, and works closely with the Chinese government, as well as MIT, Qualcomm, Nvidia, and others.

Founded in 2014, Sensetime first received attention for their DeepID algorithm, which was the first facial recognition tool that recognized faces more accurately than the human eye.

SenseTime went on to be named one of China's five "national champions" of AI in 2018, alongside Alibaba, Tencent, Baidu, and iFlyTek, which earmarks it for special treatment, government contracts and potentially longterm investment.

Since its founding, SenseTime has raised over $2.6 billion from Alibaba, Qualcomm, Softbank and others.

More recently, the company has been accused of helping Chinese authorities monitor and track Uighur muslims. Critics, inlcuding the US government, say that SenseTime's software is used in China's mass surveillance program in areas like Xinjiang, where authorities deploy a vast surveillance network to monitor and track citizens.

In October, the US put SenseTime on its Entity List, which prevents it from buying or using any technology or product that contains US-made components.

While Sensetime denies that its technology is being used to discriminate against citizens, it does have verified clients among China's police departments, which use its technology in security cameras to find and track suspects. SenseTime previously owned a 51% stake in a join-venture in Xinjiang, but it sold its ownership in early 2019.