Explainer | What is China’s social credit system and why is it controversial?
- China’s social credit system is a set of databases and initiatives that monitor and assess the trustworthiness of individuals, companies and government entities
- A good rating could offer priority health care or deposit-free renting of public housing, while a negative rating could see individuals banned from flights and trains
China’s social credit system, by its wide definition, is a set of databases and initiatives that monitor and assess the trustworthiness of individuals, companies and government entities. Each entry is given a social credit score, with reward for those who have a high rating and punishments for those with low scores.
The databases are managed by China’s economic planner, the National Development and Reform Commission (NDRC), the People’s Bank of China (PBOC) and the country’s court system.
Most of the data is gathered from traditional sources such as financial, criminal and governmental records, as well as existing data from registry offices along with third-party sources such as online credit platforms. The Chinese government is also experimenting with collecting data via video surveillance and real-time data transfers, such as monitoring emission data from factories, although these are not considered primary sources.
Those who lose credibility will find it hard to make a tiny step in society
The State Council first outlined the plan in 2014 covering individuals, businesses, social interactions and judicial administration, with the system expected to be rolled out by the end of 2020.
And while it is similar to the credit ratings provided for individuals and corporations in other countries, the Chinese version is also capable of expanding from personal credit to other aspects of life to include bill payments and criminal convictions.
Business entities, including foreign businesses in China, are subject to a corporate credit system, tracking information such as tax payments, bank loan repayments and employment disputes.
“Those who lose credibility will find it hard to make a tiny step in society,” Premier Li Keqiang said in a speech in 2018.
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China’s ‘social credit system’ explained
