The Social Credit System 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. In addition, it is also meant to rate businesses operating on the Chinese market.
The Social Credit System is an example of China's "top-level design" (????) approach. It is coordinated by the Central Leading Small 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.
As of July 2017, no comprehensive, nation-wide social credit system exists, and very little firm information is available about how this system might work in practice. There are, however, multiple pilots testing the system on a local level as well as in specific sectors of industry. Some reports have stated that the ratings may use information gathered from Chinese citizens' online behavior, but existing scoring systems run by private companies using such data (such as Sesame Credit) are still in an experimental phase.
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The main plan
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 integrity 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.
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.
Credit Score Government Video
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.
Involvement of private companies
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 2015, eight companies were picked by the People's Bank of China to develop pilots to give citizens credit scores, including Alibaba's Ant Financial Services, which operates Sesame Credit. However, the Chinese government decided not to award new licenses in 2017, citing concerns over conflicts of interest and unwillingness to share data with rival platforms.
Private companies have also signed contracts with provincial governments to set up the basic infrastructure for the Social Credit System at the provincial level.
Social credit systems in popular culture
The episode Nosedive of the TV series Black Mirror explores some of the negative implications of a system like the Social Credit System, as did the episode "App Development and Condiments" of Community.
Source of the article : Wikipedia
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