Chinese Social Credit System: The People

Updated: Nov 28, 2020

When was the last time you ran a “hard inquiry” on your credit score? Why did you check it? Normally, a citizen of the United States won’t check his or her credit score until a credit check is required, such as during a loan-application process or to qualify for a credit card. In the US, a credit score acts as a general measure of financial responsibility. A high score indicates that an individual has consistently payed back debts on time, while a low score hints at the opposite.

For Americans, the score exclusively reflects financial integrity. The score itself does not reveal anything more about a person’s character—nothing about someone’s manners, observance of social responsibilities, or positive environmental impact. But, what if each of those personal aspects were quantified and scored? Would the points system, like a credit score, incentivize individuals to comply with society’s pre-determined good practices? That is exactly what the Chinese government wants to find out.

Since 2015, the Chinese government has piloted a program that rewards citizens with points for doing what it has deemed as “right” and docks points for anything contrary. Each person starts with 1,000 points, and any incremental increase or decrease implies the types of choices that the individual makes. Summarily, if someone has more than 1,000 points, he/she is a good citizen, and the opposite is true for low scores. Arbitrarily, the system works like this:

Help an elderly person cross the street, plus-one point.

Narrowly miss hitting a pedestrian crossing a street with your car, minus-one point.

Perform community service, plus-three points.

Leave your dog’s waste on the sidewalk, minus-one point.

Since this score is designed to encompass more than just the financial component of individuals’ lives, the consequences are just as comprehensive. For example, a positive social score can improve chances of getting a promotion, being accepted into prestigious schools, and even getting a first date--China’s largest mobile dating app has built in a score-displaying feature. Further, “trustworthy” citizens wind up in lower tax brackets, receive lower interest rates on loans, and are awarded complementary television channels.

On the flip side, the all-encompassing consequences can seriously complicate one’s life. The consequences seem to be grouped into tiers. At first, the government disallows “luxurious” purchases; for example, travel on high-speed trains, airline tickets, hotel stays, to name a few. In a sense, the government starts sending the message, “You are beginning to worry us financially and socially. So, stay where you are, save your money, and work to restore your good standing.” If an individual does not get the message, the consequences ramp up exponentially—meet the “black list.” Below a score of 600, citizens are blacklisted—that is. their names and identification numbers are placed on a national registry that is publicly available. Here is an example of one such list for the Guizhou province.

The black list is serious business. For starters, the government marks the person’s phone number as black-listed, and anyone who calls will hear police sirens and a warning message effectively saying, “The person you are calling is untrustworthy. Proceed with caution.” Further, state-sponsored billboards display the images and names of untrustworthy individuals known to be in the area.

Most Americans would likely consider this program to be an extreme invasion of privacy, but interviews with Chinese citizens have revealed a different sentiment. Many Chinese citizens live in crowded, difficult-to-navigate cities where manners and courtesy are often not priorities. So, these citizens believe that the social scoring system is beneficial to them and their communities. Some benefits that are frequently mentioned are ubiquitous honesty, cautious driving, and a sanitary environment. Many people are cognizant of the incredible amount of personal data that large companies store and analyze, so they do not feel that the government is doing anything radically new or unheard of. Besides, “those who have nothing to hide, hide nothing,” right?

The tacit consent of the Chinese citizens can potentially be explained by cultural aspects, too. One of the key issues that the Chinese government aims to solve is the trust barrier among its citizens. Compared to Americans, the Chinese generally develop trust more slowly. They are keener to develop “relationship-based” trust rather than “task-based” trust. For example, many Americans and Europeans would admit to trusting a supplier if it consistently delivered product on time and extended reasonable, unchanging collection policies. In other words, if a supplier consistently completed its tasks well, Westerners are likely to develop trust.

The Chinese, on the other hand, find it difficult to develop trust through business transactions. Instead, they usually consider someone trustworthy after relationship-building activities such as meals, informal gatherings, and personal conversations. So, contextualized, this policy makes more sense to the Western mind: the general Chinese population develops trust through interpersonal relations, not business transactions. Therefore, a strictly financial score of integrity does not suit their needs, but a system that also values interpersonal relations does.

The Chinese government plans to make the social credit score fully operational throughout the country in 2020. As is common knowledge, no piece of legislation can be expected to be supported unanimously in a country with over one billion citizens. And, Westerners are likely to be surprised at how many Chinese citizens support this new nation-wide system. So, those travelling to China, be advised: the citizens may behave in a (seemingly) abnormally pleasant manner. Do not be alarmed; they are either genuinely polite people or just trying to nab some easy points.

But--according to the government--those two alternatives are one in the same.


How does the Chinese government describe this program?

What should I do if my personal credit information is wrong?

How can defaults on loans affect my personal credit?

4 views0 comments