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China’s Social Credit System is Uniquely Chinese

Once finished, the Chinese Communist Party will use its social credit system to target, coerce, and control domestic and international entities. The fully functioning system will consist of three parts. The first is ultimately a state-controlled master database where companies’ and citizens’ scores are continually stored, monitored, and updated. Blacklists and “redlists” will catalogue and sort these stored scores to decide if someone should be rewarded for following Party-approved behavior (normally in the form of cheaper flights, discounts at grocery stores, featured in Chinese propaganda, etc.) or be severely punished for failing to comply.

These punishments mean regular visits by Chinese officials, having academic achievements like PhDs revoked, personal data like home address plastered across city billboards, and their children barred from entering certain schools. While essentially a new form of population control, the Chinese Communist Party has not been shy about its global and technological ambitions for the social credit system.

Xinhua article detailed how, in 2018, Chinese officials told representatives from France, Italy, Saudi Arabia, Mongolia, Thailand, and Myanmar it sought “to promote an international city credit exchange and cooperation platform, the construction of a credit system, and a credit culture along the ‘Belt and Road.’”

A year later, senior Chinese officials invited representatives from Kazakhstan, Laos, and the Netherlands to “briefly introduce the legal and policy basis for joint credit punishment, hoping that China’s construction of a punishment system for dishonesty can contribute to the world’s implementation of useful Chinese experiences and Chinese plans.”

Though delayed due to the pandemic, Yau Tsz Yan reported last year in The Diplomat that “China [intended to] conduct a feasibility run for [its] social credit system in Kazakhstan, Kyrgyzstan, and Mongolia.” In April, however, Politico reported that “social scoring systems that track the trustworthiness of people and businesses, are classified as ‘contravening [European] Union values’ and will be banned” across Europe.

The leverage the Chinese economy holds for international corporations led the CCP to create a corporate social credit system in 2015. In 2019, 25 American policymakers voiced their bipartisan concerns to the Office of the United States Trade Representative:

“Once the [corporate social credit system] is fully operational, firms with scores below a certain state-determined threshold will face an interlocking series of sanctions across multiple government agencies…equally, if not more concerning, penalties under the Chinese [corporate social credit system] could extend to the employees of American firms, including U.S. nationals.

As punishment for individuals representing companies deemed ‘untrustworthy’…the Chinese government envisions levying travel restrictions, tax discrimination, personal sanctions, and other retributions. What we [see] is not an aberration, but the latest in a litany of attempts by China to deploy its state and economic power to bend American entities to its will. The [social credit system] is designed, in part, to further and formalize this practice. ”

The Congressional Research Service (CRS), citing European studies, believed “that multinational firms in China will be subject to approximately 30 different ratings under the [corporate social credit system].” The political and economic weaponization of these scores has already begun. “The Civil Aviation Administration of China pressured multiple international airlines in early 2018 to change their websites’ descriptions of Taiwan, stating that failure to comply would be recorded in each airline’s social credit record,” the report continues.

Demonstrated by Western companies like Hugo Boss’ refusal to condemn China for its human rights abuses, Samantha Hoffman, an analyst with the Australian Strategic Policy Institute, predicts that other Western companies will be forced to comply with Chinese demands if they wish to operate in the country. “As businesses continue to comply, the acceptance of the CCP’s claims will eventually become an automatic decision and hence a norm that interferes with the sovereignty of other nations.” Hoffman continues, “The CCP’s narrative becomes the dominant ‘truth.’ This narrative control affects…international business, other states, and their citizens.”

China is morphing into an already terrifying police state. Chinese police have already begun using augmented facial recognition glasses to identify criminals in crowded areas. The Chinese surveillance state, combined with credit city-centric technologies, will continue to tempt law enforcement to engage in preemptive policing—one where a low social credit score, or one artificially assigned to ethnic or religious minorities (like the Uyghurs), leads to arresting people before they commit a crime. The social credit system’s “security logic is anticipatory…i.e. the analytical work of making visible unknown futures and uncertain developments, which (although they have not yet materialized) shape action and decision-making in the present.” Citing Dr. Hoffman once again, “Senior CCP leadership hopes that through automation, the state will be able to more effectively anticipate and react to emerging problems, preempting crises before they become serious threats to stability.”

While there still remain numerous issues with the Chinese social credit system (namely the misbelief there even exists one standardized system in China) and the notion Big Data can do what the CCP hopes it can, the social credit system will soon have massive international repercussions. Let us hope that Europe’s example will be replicated across the world. One has good reason to remain cautiously optimistic.