Most of you will be familiar with a financial credit score that rates your financial trustworthiness. It’s intended to give creditors an indication of risk and how likely you will repay your loan commitments. With a massive helping hand from high-tech and big data, China is rolling out a social credit scoring system that rates your trustworthiness far beyond that of your financial credit score. Let’s take a look at the Chinese Social Credit score system.

How is the Social Credit Score Determined?

In China, government agencies and private companies are collecting enormous amounts of data about e.g. an individual’s finances, social media activities, credit history, health records, online purchases, tax payments, legal matters, and people you associate with in, addition to images gathered from China’s 200 million surveillance cameras and facial recognition software. Data that indicates non-compliance with legally prescribed social and economic obligations and contractual commitments are flagged up and aggregated on a government-wide level to determine the trustworthiness of companies and individuals. Such a trustworthiness score can fluctuate based on actions—going up for good deeds such as donating to charity and can go down for negative actions such as getting a speeding ticket.

China began to create this system in 2010 as a pilot program but officially began implementing the construction of a nationwide social credit system in 2014. According to the government’s document, Planning Outline for the Construction of a Social Credit System (2014-2020), all of the social credit scores for its 1.4 billion citizens will be publicly available by 2020. At that time, there will be a searchable file of every Chinese citizen that represents all the data collected from public and private companies to track their social credit.

How is a Social Credit Score Used?

The idea is to create more transparency about companies and individuals that are breaking the law or are non-compliant with official obligations and incentivize the right behaviors with the overall goal of improving governance and market order. The Chinese Communist Party intends the social credit score system to “allow the trustworthy to roam freely under heaven while making it hard for the discredited to take a single step.”

Even though the system is still under development it currently plays out in real life in myriad ways for private citizens, businesses and government officials.

Generally, higher credit scores give people a variety of advantages. Individuals are often given perks such as discounted energy bills and access or better visibility on dating websites. Often, those with higher social credit scores are able to forgo deposits on rental properties, bicycles, and umbrellas. They can even get better travel deals. In addition, Chinese hospitals are currently experimenting with social credit scores. A social credit score above 650 at one hospital allows an individual to see a doctor without lining up to pay.

If an individual has a lower social credit score, they might find their ability to purchase what they want such as high-quality goods or a new home to be restricted. They might also be prohibited from buying airline and train tickets or renting an apartment. Some people with low social credit scores can expect to be blocked from dating sites and not be able to enroll their children in a school of their choice.

Actions that Adjust Social Scores

Social credit ratings can go up and down based on an individual’s actions. Purchasing diapers for a child might bump your score (the system assumes you’re a responsible caregiver) while it might take a hit when you purchase alcohol. Are you a gamer? It’s better for your social credit score if you never cheat when playing video games, but if you play video games more than 10 hours a day, your social credit rating will likely be lower than the diaper-buying caregiver. If you are found guilty of disrupting or blocking check-in counters or passageways in an airport, as obsessed fans did at the Beijing airport as they fought to gain access to their pop idols, your social credit score can be lowered.

Reception of the Social Credit System in China

Currently, most Chinese citizens have a favorable view of the commercial social credit score systems in place; a survey of Chinese citizens shows 80 percent of respondents either somewhat or strongly approve of social credit systems. They perceive the changes as a more effective and efficient way to promote good behavior and protect them from fraud and bad business. As you might expect, citizens who benefited positively from higher social scores were more favorable of the system. It is predicted that for these positive results to continue, citizens will need to believe that the system is fair and transparent. Chinese citizens have always known the government knows a lot about them, so digitizing this isn’t as jarring as it would be for Americans and Europeans. For many that live outside of China, it feels more like one of the creepy ‘Nosedive’ episode of the British science fiction TV series Black Mirror.

Influence Beyond China’s Borders

New research looked at the implications of the Chinese social credit system beyond China’s borders. All companies with a Chinese business license, a requirement for any company operating in China, were brought into the social credit system at the beginning of 2018. As a result, U.S./China scholar Samantha Hoffman believes it is already influencing the behavior of foreign businesses. In one case, Chinese authorities demanded U.S. and Australian airlines to use Beijing’s preferred terminology to refer to Taiwan and Hong Kong.

While most people in the US and Europe would be completely freaked out by such an approach, there are others who see it as the utopian use of technology to promote good citizenship. Where do you stand?