China’s social credit system fuels authoritarian regime

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China implemented its social credit system on a nationwide scale starting May 1. Social Credit, a harmless sounding phrase is the unholy marriage of big data with the proverbial ‘Big Brother’ under which, the state grades citizens as ‘trustworthy’ or not.

Ostensibly the system is intended to address the trust deficit in the Chinese business environment and society. The state collates data on a wide range of criteria that include but are not limited to financial behavior, credit history, traffic or public transport violations, social media presence, participation in online consumer forums, political views expressed at online portals, school and college scores etc. Everything is grist to this mill including your rating as a consumer on a taxi app, library borrowings, medical history, shopping behavior, possibly even dating apps. The score generated locks the individual into a system of punitive and reward measures.

The first nationwide punitive impact of the social credit system targets the ability of citizens to travel within the country. In 2017 the Chinese government had denied air-tickets to over six million people traveling to their families during the Chinese Lunar Festival for having low social credit scores. This ranking system makes the most vulnerable sections of Chinese society even more prone to abuse by the state and the market. This includes rural migrants who might not be logged into urban household registration systems, minority populations that are currently more heavily surveilled than Han Chinese and people with less access to higher spending to push up their social credit scores. Specifically in Xinjiang and Tibet, the two minority regions of China, this is likely to further curtail the freedom of movement of people both within and outside these regions.

Big Brother is watching

The social credit system was first introduced in China in 2007 and has seen a successful run in many Chinese cities including a pilot in Shanghai. In June 2017, the National Development and Reform Commission had announced that China will roll out the nationwide implementation of the social credit system by 2020. Following, the recent National People’s Congress session that cemented Xi Jinping’s role as China’s paramount leader indefinitely, the Chinese government seems to have moved up the implementation of this reward and punishment system to a unified national practice. Currently, many cities maintain highly public lists of discredited individuals as a deterrent against ‘bad social behavior.’ The coercive element of this scheme is evident in ‘once untrustworthy, always restricted’ principle that underlies this rankings system. Once you are classified as untrustworthy, your entire social experience is impacted by a rating generated by an algorithm predetermined to reward compliance.

The social credit system rides on data available through cashless transactions on mobile payment platforms of Alipay and WeChat Pay that the Chinese use now to pay for practically everything. Alipay, owned by Alibaba lists over half a billion users on its website and with its slogan “Trust Makes it Simple.” WeChat Pay owned by Tencent also claims hundreds of millions of users both within and outside China with transactions in British pounds, HK dollars, US dollars, Japanese yen, Canadian dollars, Euro among others. Both Alipay and WeChat are not merely payment platforms but entire online ecosystems of social media, financial services, consumer goods and services, entertainment, travel services, banking, government services including medical services, news, education delivery and more.

The users on these online services can activate their credit score calculation as a means of improving their social rating. However, the social credit score is no longer based on a purely voluntary participation of the citizen or the consumer. The Chinese State put its imprimatur on the social credit system in 2014 and government services can now demand your social credit score and link it to decisions such as granting bank loans or medical services. People can potentially get higher or lower sentences in courts based on their social credit score.

Market-driven Dystopia

When it comes to the market, higher consumption standards produce a higher social credit score and this means that people in upper classes have an intrinsic advantage and enjoy a higher score. Socially, the system incentivizes having more high scorers in your social network thus creates a new underprivileged class of low social credit scorers. Individuals may improve their social credit score by meeting expectations of ‘good behavior’ set by the state and the market through a paradoxical array of actions such as shopping at higher-end malls, performing charitable acts, recycling or even donating blood.

The rewards for a high score include better college admissions, jobs, preferential loan approvals at banks, hotel, car and bicycle rentals without safety deposits, upgrades in the tourist industry, preferential medical appointments and more. A low social credit score means travel restrictions, longer waits or even rejections for loans from banks or rejections for renting apartments, in jobs and more.

While it is common practice to rate the credit-worthiness of companies, businesses and even national economies, the Chinese idea of social credit is designed for total social control by the Chinese state and market forces, both guided solely by the interests of the Chinese Communist Party. Frighteningly, this social control is delivered through the promise of greater efficiency of public services and a heightened consumer experience. Democracies such as India would do good to reject such insidious arguments that underlie the use of big data for authoritarian social and political control.

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