How the social credit system works — China’s digital dystopia

To become an outcast with whom no one wants to deal is the harshest punishment in ancient times. Thousands of years ago this was a torture before death. It was the fear of being banished from the pack that sustained iron discipline in primitive societies.

Perhaps we are about to return to a similar model of social order, in which public approval takes precedence and rights and freedoms can be withdrawn swiftly by collective decision. This is already happening in China — in certain regions of the country a social rating system is operating.

A system of order for the Middle Kingdom

In any country there are norms, rules and constraints — legal, moral, sociocultural — that cohere into a single system of public behaviour. Depending on whether one follows them or rejects them, an individual’s reputation is formed.

But there is a gulf between a tainted reputation for bad character and restrictions on rights. It is rare for a disreputable but law‑abiding person to lose social privileges.

In China since 2014 a system has been introduced that effectively re‑creates a social formation that existed in prehistoric communities. Under it, people with a good reputation — this is called the “social rating” — will receive far more moral and material benefits than those who do not meet the accepted norms.

And those who do not follow the established standards will effectively be relegated to the position of the Indian caste of the “untouchables.” They will be barred from using various social institutions, people will not interact with them, for interaction with “low‑ranked” individuals could harm decent members of society.

In China this idea takes root on fertile ground. Maintaining a positive balance of good deeds is a step toward the ideal of the “noble husband,” about which the Chinese sage Confucius wrote. The judge of each person becomes many — people can send thanks or complaints about a given person. And the authorities merely act as arbitrators, setting the criteria by which everyone will evaluate everyone else.

This, then, is the realisation of one of Dao’s principles — the state does not meddle in people’s affairs, but creates conditions for harmonious development of society.

How it works

Since January 2021 China has adopted a new civil code that officially legalised the social rating system. In some provinces it already operates, but there does not seem to be a unified network with standardised parameters of behaviour, rewards and punishments.

We checked this ourselves by asking ordinary Chinese citizens to describe how the system works. Yet in Guangzhou (Guangdong province) two locals had not even heard of it. So what applies in the various provinces of the Middle Kingdom? We can judge from documents issued by the State Council and the Communist Party apparatus.

In essence, social credit is a system that, in automated, real‑time fashion, incentives certain citizen behaviour and performs self‑censorship, says sinologist Leonid Kovachich. It consists of several blocks: surveillance and monitoring of behaviour, assessment of each individual’s actions, and a mechanism of rewards and punishments.

Here is how it works in practice. A resident of one of the cities where, according to official sources, the system operates (for example, Suzhou) receives an initial balance on their social score — 1000 points. Thus, everyone starts on equal footing.

Going forward, this balance can rise or fall depending on the person’s behaviour. Incidentally, similar rules apply to legal entities — companies are assessed for compliance with environmental, legal and social norms.

The Unified Information Centre analyses behaviour online across 160,000 parameters drawn from more than 142 institutions, as well as from banks, street surveillance systems, etc.

When the score reaches 1050 or more — a model citizen is awarded the top rating — AAA. A rating of 1000 points is the prestigious category A+, more than 900 points is the middle level B, and less than 849 is the marginal category C. Citizens with fewer than 599 points fall into the blacklist category D, and cannot work even as taxi drivers. They effectively become outcasts of society.

Points can be earned through conscientious behaviour and good deeds. Positive karma is earned by taking part in charitable activities, caring for elderly family members, fostering good relations with neighbours, through donations, through having a good credit history and by avoiding traffic violations. And together with this, government support adds some points as well.

«In the recently issued State Council document there are provisions that the system should promote and stimulate the adoption and diffusion of socialist values within Chinese society. This includes resisting Western values, a certain level of self‑censorship, recognition of the guiding and leadership role of the Party, and commitment to state capitalism. The document calls for further integration of the social credit system into the broadest possible range of internal and external economic relations», says Leonid Kovachich.

Thus, expressions of approval of the authorities and the Communist Party can be treated as spreading the right values and yield karma bonuses.

Conversely, for criticising the leadership or engaging in opposition activity (participation in protests, spreading anti-government messages or rumours discrediting the Party and the government) — points can be deducted.

In addition, points can be deducted for traffic violations, involvement in sects or pyramid schemes, frequent purchases of alcohol and cigarettes or insufficient care for aging parents.

«Good» citizens receive priority in hospitals and state institutions; they can expect favourable loan terms, discounts on goods and services. Such people may send their children to private schools and universities, fly on airplanes, travel by trains and stay in good hotels. The rating even influences where a person sits in dating apps.

Consequently, those at the bottom of the social pyramid are deprived of all this to varying degrees. They will not be able to get almost any job, send their children to kindergarten or school, be denied credit, not be issued tickets for transport, or be housed in a good hotel.

This is already happening — as of April 2018 insufficient trust rating led to cancellations of 4.25 million high‑speed train trips and 11.1 million flights, reported by Global Times.

People with “low ranks” are even afraid to speak with them — lest someone notices and reports to the authorities about contact with a category D person. Plus, there may be public shaming — friends and acquaintances will be told about some disreputable act.

Naturally, questions arise about the objectivity of the assessment and the proportionality of punishment. Now each province and region competes in ingenuity and sets its own rewards and punishments, says Leonid Kovachich.

Therefore the authorities in China are trying to harmonise the system and establish unified standards. Because sometimes a late payment on a loan or a fine prevents a person from using high‑speed transport or enrolling their children in school.

But there are big doubts this will be done. First, the authorities have plenty of current issues to deal with — the COVID‑19 factor in China has not yet moved off the foreground. Secondly, the authorities have not managed to solve the problem of timely and complete interdepartmental information exchange. And this is not a technical difficulty but a political issue — as often, one ministry simply does not want to share information with another, and as a result the entire system does not work.

On information sharing it is a matter of interagency competition and struggle. These are political and administrative governance issues, which are unclear how to solve, says the expert.

«When the first documents on the system were published, everything was ominous and beautiful. It conjured an image of a digital panopticon, in which people, like robots, would carry out the orders of Big Brother. But now there is a sense that the social rating system is a major political overreach, not necessarily destined to succeed», says Leonid Kovachich.

But perhaps the system is already in operation in some form — just not officially announced, argues the sinologist.

«Perhaps the authorities deliberately do not publicise the system’s operation, so that society is governed by an invisible hand. And there is no doubt that governance of Chinese society is well organised. Take the zero‑tolerance COVID‑19 strategy, which, with only minor interruptions, still operates and yields results», says Kovachich.

For now the social rating system is not linked to the digital yuan. Yet nothing prevents linking finance to the social rating to add levers of influence over people. In that case, citizens in group D could lose not only rights but money, to be transferred to the more reliable citizens in group A.

Experience exchange

Russia has repeatedly stated at the official level that the state does not plan to implement analogous systems. In 2018 and 2019 Deputy Prime Minister Maxim Akimov spoke to that effect, saying such technologies pose a clear threat to the country. And they are unnecessary because Russia has “a society with a classical humanist tradition.”

The social credit system will not take root in Russia, Kovachich says, for several reasons.

«Russia is not as far along in the collectivist approach and is more individualist. And secondly, surveillance and informants do not enjoy public approval», says he.

Nevertheless, the system arouses lively interest among certain decision‑makers. They watch China’s experience closely.

Other experts believe that a system of citizen control and self‑regulation could appear in democratic countries over time. Dartmouth College history professor Pamela Kyle Crossley thinks so, for example.

«The difference is that Chinese society is more prepared to integrate commercial, military and law‑enforcement data. As a result, Chinese are more tightly controlled through intimidation and self‑censorship than Americans will be for another couple of decades», says Crossley.

Possible outcomes of such total self‑regulation under externally imposed standards have been analysed by philosophers and writers. One of the most popular reflections on this topic is George Orwell’s dystopian novel “1984.”

«Orthodoxy means not thinking; not thinking means not thinking. Orthodoxy is a state of unconsciousness», Orwell wrote in 1949.

Who would have thought we would come so close to realising that thesis…

Read ForkLog Bitcoin news on our Telegram — cryptocurrency news, rates and analysis.