Inner Workings of Social Credit in China: Boon or Bane?


BEIJING — In George Orwell’s 1984, fictitious Oceania’s Big Brother watched citizens’ every move; now, Uncle Xi (or Xi Dada, the “affectionate” nickname of Chinese president Xi Jinping) is doing the same in the Middle Kingdom. The State Council, China’s premier legislative body, announced in 2014 the creation of a national social credit system.

Most audiences are probably familiar with the idea of financial credit; China adopted that notion in the form of a five-year plan and adapted it to everyday life. Its ambitious implementation of a methodology that bases its currency on private choices has elicited disapproval from many in the international community, who see it as a tool that enables human rights violations. Yet it has also sparked hope in those who wish to reform China’s most corrupt and morally bankrupt institutions.

How Does Credit Access in China Work?

But simply likening social credit in China to financial credit in the West does not provide much insight into either its inner workings or its potential to influence. Hence the following question: how, exactly, does it work? The Chinese Communist Party’s (CCP) official document on the matter, translated into English by Rogier Creemers (a China scholar at the University of Oxford), highlights three interlocked terms central to the policy: trust, sincerity and contradiction.

“Trust” is the basis for both Chinese political philosophy and the CCP’s dominance. A regime that wishes to last must secure the trust of the people by creating a harmonic society through the guarantee of their security and economic well-being. This line of thinking underwrote the dynastic Mandate of Heaven, and it is what keeps the current administration in power.

The CCP crystallized this trust into a credit score accounting for unwanted social interactions, such as smoking on trains or protesting public policy. Official party organs are no longer the only enforcers; citizens are expected to trust one another to follow its guidelines and to disclose their violations with sincerity in regards to behaving honestly. Under the new system, contradicting domestic law breaks trust and shows insincerity, which then can be reported to the administration, resulting in a lowered social credit score.

Social Credit Goes a Long Way

Observers would be correct to point out that the manner in which most societies operate can similarly be called social credit. The court of public opinion has the power to both exonerate and condemn individuals based on social decisions. A racist comment on Twitter can derail a career. Yet social credit in China is drastically different, due primarily to the pervasiveness of government surveillance and its power to act in everyday life.

A standardized social credit system can bar individuals from accessing trains and hotels. Public protesters (aside from the risk of disappearance) can be blacklisted in job searches. Making a mistake in paying court-issued fines cost investigative reporter Liu Hu his ability to board flights, take loans and buy property — without notice from the government or ability to appeal. Even foreign companies are affected; by diverging from China’s claim of sovereignty over Taiwan on their websites, airline companies were forced to kowtow and apologize, lest they lose their privilege of doing business in Chinese markets.

Social credit in China, though still in a nascent phase, provides a glimpse of a possibly grim future. It gives the government an unprecedented level of control over its citizenry’s behavior. A conformist society has been on the CCP’s menu for decades since the Cultural Revolution and the Tiananmen Square Massacre, and with modern data and technology, it can finally begin realizing its dream of complete control.

Backlash and Progress

Yet, despite its seemingly draconian nature, the social credit system is not guaranteed to take away all civil liberties; nor is it without its benefits. When the government attempted to kickstart a social credit system in Suining, a county near Shanghai, it faced widespread backlash by the public and even local state-run media. According to the Economist in late 2016, the CCP convened a “social credit summit” in Shanghai to gather together officials and members of academia in an attempt of promoting open conversation of the topic — a rare event, given the usually authoritarian nature of policymaking in China.

And so far, social credit has largely achieved what it sought to without impugning on the goodwill of the public. The communities it has been implemented in have experienced (anecdotal) drops in crime and a general increase in the quality of life, according to interviews local residents gave to “Foreign Policy” reporters.

Given the prevalence of illicit activities across the nation (bribery and deceptive dressing rat meat as lamb to name two), social credit in China holds the potential to curb corruption and malfeasance in government agencies along with unethical business practices that cut quality in favor of profit. With over 40 million members of its population living in poverty-stricken conditions unaided (and often worsened) by local government and businesses, much is on the line.

Increasing Domestic and International Power

As China looks to supersede the United States as the world’s largest economy in the coming decades, its leadership also seeks to promote civil order and tighten its grip on domestic power. Social credit in China may turn out to be a futile exercise in political control that structurally undermines itself, or it may turn out to be a poverty-alleviating success and a powerful proponent of China’s soft power appeal to authoritarian regimes the world over. Or perhaps it will be both.

Yet to wish for social credit’s complete success would also be to wish for the complete dismantlement of privacy — a basic human dignity. At the dawn of its conception, any faith local observers have in a system that can both preserve privacy and spark reform must be born on Uncle Xi’s shoulders. That is quite the burden for both nation and president, and time will tell if he can shoulder such responsiblity.

– Alex Qi

Photo: Flickr


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