The Chinese Social Credit System in the Context of Datafication and Privacy

This social credit system will provide all Chinese citizens with a score based on social interactions and other types of behaviors, and this raises various ethical and soceital questions.

©2014 Reuters

Why should you read this article?

While I recently conducted research into the ethical and soceital aspects of big data and datafication, I realized how little the Western mainstream media has brought attention to the Chinese social credit system that is being shaped as we speak. 
Most people I have spoken to have never heard about this system, and its vast ramifications for not just every Chinese citizen, but also for Western companies operating within their borders.

This article is an attempt to lay out the foundations of this social credit system, while also trying to discuss the ethical and societal implications when it comes to social profiling and privacy. 
Ultimately, such a system or at least a version of it, may end up being implemented in Western countries as well, hence what is happening in China at the moment is relevant to all of us.

Before I dive into the Chinese social credit system in more detail, I will first of all clarify what is meant by ‘Datafication’ while also relating it to a few recent cases already witnessed in the West to establish some context. 
‘Datafication’ in its basic notion is about moving from digitization towards datafication and the collection of data in increasingly higher volume, velocity and variety. Furthermore, datafication entails to an increasingly extend the search for patterns through the use of advanced algorithms. Due to the big collection and use of big data in today’s society, the notion of datafication has been developed to describe this phenomenon.

Recent cases underlining datafication in today’s society is the Snowden case, which exposed extensive governmental surveillance of citizens worldwide, and raised concerns over privacy and security risks. In addition, France’s government has not long ago announced that it will create a centralized database to collect information such as height, eye color, fingerprint, names and photograph of almost 60 million people living in the country for a period of 15 years, sparking fears over data security and privacy.

The Story Short

The Chinese Government proposed back in 2014 an extensive data collection system called the Social Credit System. The Social Credit System is according to the Chinese State Council being planned in an effort to establish a sincerity culture with the goal of enhancing trust. The ultimate objective of this Social Credit System is to raise the honest mentality and credit levels of the entire society, and is an important step in advancing a harmonious socialist society. If all goes well in the current planning and test phase the system will be fully implemented by 2020 and will enlist every citizen living and every company operating in China.

However, critics of the system argue that there are various negative aspects, as the Chinese government plan to monitor every action Chinese citizens perform by collecting vast amounts of data online, and then provide a score to measure how trustworthy each individual is, based on political, social, commercial and legal credit. Furthermore, according to a recent article published in Futurism, all individuals’ behavior will be monitored when it comes to spending habits, how often you pay your bills, and who you interact with socially. All of this will then result in a trustworthiness score that will be publicly available for everyone to see. Importantly, if citizens show bad behavior and breach trust, they will be blacklisted and restricted from all sorts of societal activities.

Such a system naturally raises questions and concerns over hacking, social profiling, privacy, ethics, data protection, data capitalism, the use of algorithms, surveillance and power relationships between the government and its citizens. Some of these will be explored in more detail below.

How is the data being collected?

The Chinese government has since 2015 operated a data sharing platform that is collecting data from local and central government authorities such as the State Food and Drug Association. Also, commercial credit rating institutions will soon form part of the platform as well, including Sesame Credit, which is an affiliate company of Alibaba. In addition, Chinese authorities with the Central bank leading the effort, have recently established a central processing clearinghouse for online payments, and has signed up 44 financial companies to submit data to this centralized system in order to help generate citizen credit scores.

Furthermore, the State Council has in an official statement stated that they seek to move forward with credit information exchange and sharing, meaning that all sectors must participate in exchange and sharing of such data. Also, the State Council has plans to introduce incentive mechanisms to ensure that the government’s credit system will be supplied with data from credit investigating systems, basically meaning all private companies and authorities that collect data in one way or another.

In relation to the government’s data collection methods, various algorithms are being used to analyze all the data. However, the thing is that there is a clear lack of systematic information on how the collected data will be used and evaluated. The algorithms and criteria used in creating the citizen credit score are still unknown, leading to dangers of pre-programmed algorithmic behaviors. Furthermore, biased behaviors could be pre-programmed into the algorithms without this being publicly disclosed, meaning that a bias towards people of certain ethnicity, religion and political orientation could mean an automatic lower credit rating for such people. Also, since the algorithms are in the power of the government and local authorities, they can choose to change the functionalities of the algorithm whenever they wish to do so.

What are the ethical and soceital implications of this credit system?

It has now been established in more detail how the government is collecting all this data and some of the consequences hereof. To elaborate further on those issues, the following section will dig deeper into the ethical aspects of the Social Credit System.

In this system, every behavioural action performed by Chinese citizens will be rated as either positive or negative by an algorithm, and a score will then be calculated based on this to decide your level of trustworthiness. As of now, participating in this credit system is voluntary, but by 2020 it becomes obligatory for all people living in China to participate and being ranked. 
Also, what is especially interesting about this scoring system is that all your behaviors and preferences will be included in this final score. For instance, if you have a tendency to play video games many hours a day, you could be considered a lazy person.

Furthermore, the messages you post online will also be tracked and included in your score, meaning that posting positive messages about the country, the social system or the economy will give you a better score. Especially interesting is the fact that individuals are not in full control over their own score, as one’s score is also based on what friends and families say and do online. The consequence of this is that being friends with someone who posts negative comments online, will then affect your own score negatively, even though you had no part in it. Having the system set up this way, could ultimately let the government control who you interact with and what actions you wish to take.

According to the Chinese State Council, all individuals will be rated based on big data collected from the following criteria in order to reach what they call social harmony and harmonious interpersonal relationships: Healthcare, hygiene and birth control. Social security, care for elderly and charity. Labour and employment. Education and Scientific Research. Culture, sports and tourism. Environmental protection and energy saving. Internet applications and services. Peoples economic and social life. Adding to this, a local Chinese media narrow all the credit scoring categories down to five sub-categories, which are social connections, consumption behavior, security, wealth and compliance.

Also, the State Council has publicly stated that it directly allows newspapers, television and online media to make information public about certain individuals accused of trust breaking, while also being allowed to make these individuals’ punishment publicly available. The direct goal for this is to create public opinion pressure on those affected individuals and any other individuals that are in danger of receiving a lower score. Hence, in this society, nothing is secret when it comes to your personal data.

Restrictions will be imposed on you

Chinese citizens can end up being met with various sanctions and restrictions if they have a low credit score and thereby deemed untrustworthy. According to the State Council General Office, then finding yourself on the black list will result in restrictions on: applying for social security fund support, on taking higher management positions, restrictions on becoming a civil servant, restrictions on bank loans, restrictions on working within the food and medicine industry and restrictions on trading various assets. But even more restrictions could be imposed on your allowance to: riding trains and aircrafts, on visiting restaurants and hotels, having sons and daughters attending certain high-schools, on purchasing insurances, on renovating your own house and finally restrictions can be imposed on your internet speed.

Even more restrictions can be imposed other than what is listed here, but the key point is that peoples’ freedom can be undermined to a great extend directly by the Chinese government based on data and an algorithm on which you have no control, and which lacks clear transparency into how works.

What is also worrying is that people cannot opt out of the system and can never be forgotten, meaning that if you are not allowed to use either aircrafts or trains you are trapped inside a system, which it is impossible to escape from. This will have large impacts on your own children and their children as well, as they are themselves entitled to a worse score for only being in the same family as you. Therefore, entire generations will find it difficult to escape from a system that deems you not-trustworthy, based on data which is taken out of its context, and which the news media have the right to make public to everyone.

In addition, by rating citizens’ social behavior, preferences and interpersonal relationships, the government indirectly has the power to steer and shape peoples’ actions and behaviors into the exact direction that the government wishes. Also, since the algorithms are not made public, there is a risk of unfair preferences being made towards certain types of ethnicities, religions and genders without this ever being made known to the general public. Furthermore, the government will be in a position to change the algorithm and the type of data collected at any given time.

Ultimately, socially accepted behavior is defined by the government, and citizens cannot criticize the system as that would negatively affect their scores.

Is the system all that bad after all?

China has historically had, and still has a more poorly regulated market economy compared to many Western countries, and in such an economy the sale of counterfeit products and substandard products where companies sell poisoned food and medicine is a big problem. Furthermore, many of the Chinese citizens do not have a credit score and never had one, which means they are not able to receive credit and make loans for cars and houses. This social credit system is supposed to make up for that by creating more control and transparency mechanisms. Also, due to such poor market regulations and bribe practices, there is a danger for foreign companies to do business in China, hence giving the government a reason to create more transparency and control. Therefore, by trying to prevent illegal behavior, to ensure contracts are being honored, and to strengthen the environmental focus, may all help in attracting more companies to do business in China.
In addition, one could argue that such as system helps in creating better democratic societies by enhancing transparency, and by ensuring that everybody knows the score of everybody. You even know what data has been collected about yourself, and what your own score is. Also, it is already natural in many countries to rate services such as companies, doctors and musicians online, which could let you to argue that the social credit system is just a natural progression from this.

Lastly, seen from the perspective of the individual, many citizens with high social credit scores can avoid leaving deposits when renting cars, bicycles and hotels, can avoid long queues at hospitals, can avoid scammers on social media and dating sites, and in general receive many societal benefits. Therefore, being a good citizen is something to strive for and helps you achieve various things in a better and easier way for yourself and your family.