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  Social Credit System  

 Black Mirror - Nosedive 

The Social Credit System is a proposed Chinese government initiative for developing a national reputation system. [LINK]

  • It has been reported to be intended to assign a "social credit" rating to every citizen based on government data regarding their economic and social status.
  • Xinhuanet has reported that the plan for the system focuses on credit in four areas, including:
       • Administrative affairs       • Social behavior
       • Commercial activities       • The judicial system

As of September 2016, this system does not yet exist, and very little firm information is available about how this system might work in practice.

  • Some reports have stated that the ratings may use information gathered from Chinese citizens' online behavior.
  • The episode Nosedive of the TV series Black Mirror explores some of the negative implications of a system like the Social Credit System, as did the episode "App Developement and Condiments" of Community.
China’s Nightmarish Citizen Scores: a Warning For Americans  [LINK]

Propaganda Games: Sesame Credit
The True Danger of Gamification

China is launching a comprehensive “credit score” system, and the more I learn about it, the more nightmarish it seems. China appears to be leveraging all the tools of the information age — electronic purchasing data, social networks, algorithmic sorting — to construct the ultimate tool of social control. It is, as one commentator put it, “authoritarianism, gamified.” Read this piece for the full flavor—it will make your head spin. If that and the little other reporting I’ve seen is accurate, the basics are this:

  • Everybody is measured by a score between 350 and 950, which is linked to their national identity card. While currently supposedly voluntary, the government has announced that it will be mandatory by 2020.
  • The system is run by two companies, Alibaba and Tencent, which run all the social networks in China and therefore have access to a vast amount of data about people’s social ties and activities and what they say.
  • In addition to measuring your ability to pay, as in the United States, the scores serve as a measure of political compliance. Among the things that will hurt a citizen’s score are posting political opinions without prior permission, or posting information that the regime does not like, such as about the Tienanmen Square massacre that the government carried out to hold on to power, or the Shanghai stock market collapse.
  • It will hurt your score not only if you do these things, but if any of your friends do them. Imagine the social pressure against disobedience or dissent that this will create.
  • Anybody can check anyone else’s score online. Among other things, this lets people find out which of their friends may be hurting their scores.
  • Also used to calculate scores is information about hobbies, lifestyle, and shopping. Buying certain goods will improve your score, while others (such as video games) will lower it.
  • Those with higher scores are rewarded with concrete benefits. Those who reach 700, for example, get easy access to a Singapore travel permit, while those who hit 750 get an even more valued visa.
  • Sadly, many Chinese appear to be embracing the score as a measure of social worth, with almost 100,000 people bragging about their scores on the Chinese equivalent of Twitter.

A few years ago I wrote a piece about how the fall of the Soviet Union, for all its benefits, has made it harder to defend privacy in the United States. During the Cold War, I argued, we defined ourselves in opposition to an enemy that exemplified and embodied in very real form the nightmarish potential of widespread surveillance and control. This made it easy to point to surveillance and shout, “un-American!”

We have thankfully seen the end of the old totalitarian regimes, but often they have been replaced by authoritarian regimes, which operate with free markets and greater personal freedom, but continue to apply just enough power to stave off threats to their rule. Arrests, beatings, imprisonment, and shootings are such crude tools for the silencing of political opposition and dissent—so much subtler and more effective to pressure people, to turn the exercise of power from a hammer, striking the body politic from without, into a drug, which permeates social life from within and shapes it in the desired directions. In today’s world, all the tools are in place to allow a government to do just that in stunningly subtle yet powerful ways, and the Chinese government appears to be wasting no time in exploiting that potential to the fullest.

The United States is a much different place than China, and the chances that our government will explicitly launch this kind of a program any time in the near future is nil, but there are consistent gravitational pulls toward this kind of behavior on the part of many public and private U.S. bureaucracies, and a very real danger that many of the dynamics we see in the Chinese system will emerge here over time. On the government side, for example I have written about how the TSA’s airline passenger “whitelist” system could evolve in this direction. In the private sector, Frank Pasquale notes that elements of its judgment-and-reward system already exist in the U.S. private-sector credit scoring infrastructure.

I hope this new Chinese system becomes household knowledge in the United States, and can provide the kind of widely recognized paradigm for what to avoid and how not to be that the old totalitarian regimes used to give us. At the ACLU we are constantly warning of the dangers of abuses of power, and often the dangers we cite, while well-founded, consist of potential futures, leading critics to say we’re being “merely theoretical.” With this Chinese system, a whole range of things we’ve warned about are no longer theoretical.

Update (10/8/15): 
I’m starting to hear questions raised (here and here) about the accuracy of the source on which I based this blog post. I did include a passing caution about my lack of direct knowledge of the source’s accuracy, but I wish I had been more explicit in offering that caution given the language and cultural barriers between the United States and China, and the scarcity of reporting on this system by professional journalists with direct knowledge of Chinese society. I hope to see such reporting soon. That said, the Chinese scoring systems still sound plenty bad, and we all still need to consider the danger that our own institutions will drift toward such systems and their potential abuses.

By Jay Stanley, Senior Policy Analyst, ACLU Speech, Privacy, and Technology Project
OCTOBER 5, 2015 | 1:00 PM

China’s ‘citizen scores’ credit system  (not as Orwellian as the ACLU thinks…yet)   [LINK]

china credit score 240

Recently, you may have come across this ACLU piece – or any of the dozens of sites reblogging it – about China’s new citizen score system. Mandatory credit scores for everyone that take into account everything from your video game purchases (that’ll drop your score) to your friends’ political activities? Rewards like travel visas for those with good scores? It sounds like a nightmare.

Thankfully, it’s not quite as bad as all that. The ACLU seems to have been confused about a few things, but here’s the key one: Alibaba’s Sesame Credit scoring system, Tencent’s credit scoring system, and the mandatory government one (which isn’t mandatory until 2020) are not the same things. They are three different things that many articles in the Western press are treating as if they were the same.

Alibaba and Tencent’s credit systems: two different non-government products

Sesame Credit does offer some of the features outlined in the ACLU article. It doesn’t hand out Singapore visas, obviously – I’m not sure how that would even be possible – but it was offering promotions for people with high credit scores, including access to a high-speed VIP check-in at Beijing’s Capital International Airport. China’s government has not endorsed this, though. In fact, according to Caixin, China’s central bank is annoyed by the promotional tactics and has reportedly ordered Sesame Credit to stop offering the airport promotional benefit.

The online score-sharing and bragging alluded to by the ACLU also seems to be coming primarily from Sesame Credit. Some critics have accused the scoring system of essentially being a marketing gimmick designed to promote use of Alibaba’s payment service Alipay (since an increased number of transactions will raise your score).

Many of the other details from the ACLU’s article seem to be based on Tencent’s credit score system, which doesmine data from users’ social networks in order to determine their credit. I haven’t been able to find any direct statement that Tencent factors in users’ political post history – or that of their friends – in determining a credit score.

The difference between the two systems makes sense when you think about the companies’ backgrounds. Ecommerce-focused Alibaba’s credit system is based heavily in users’ purchase and payment history. Social giant Tencent’s credit system is based on users’ social networks. Each company is leveraging the data to which it has access. China doesn’t have a national, comprehensive, and widely-used credit system like those in the West, so private lenders like Alibaba and Tencent have created these systems to better inform their lending decisions.

Tech in Asia contacted both Tencent and Alibaba for this story but has not yet received a response from either firm.

The government’s 2020 credit scoring system

China’s government-mandated credit system is wholly separate from the Alibaba and Tencent systems already on the market. It’s not entirely clear yet how the system will work, but the best source of information about it currently is the State Council planning document that was published and circulated last year.

That lengthy document, which is full of political rhetoric, doesn’t give a clear idea of how exactly the system will work, or on what grounds scores will be based. It’s clear from the text that Chinese authorities don’t want a credit system that’s completely focused on finances; rather they paint the new system as a way of rewarding “sincerity” (and punishing insincerity) throughout society.

Given that, it seems likely that some of the ACLU’s fears might eventually come true: if the government wants its credit system to enforce social morality, then collecting data on everything from political activities to purchase histories might well be on the table. And there’s little in the Chinese government’s history to suggest it would be unwilling to construct such a credit system and make it mandatory.

For the moment, though, take whatever you read with a grain of salt. China has no mandatory “citizen score” system yet, and the details popping up all over the web about that system appear to be taken from Alibaba and Tencent’s wholly separate, definitely-not-mandatory credit scoring systems. A lot of these details also appear to be exaggerated.

What Could China’s Social Credit System Mean for its Citizens?  [LINK]

chinese internet bar 240
AFP/Getty Images

Beijing wants to monitor almost all activity within Chinese borders. That's still a ways off.

China’s authoritarian government is using big data to develop credit scoring systems and a so-called social credit system, while urging data-sharing between companies and governments. How should Chinese netizens and global citizens concerned about privacy react?
The Editors

Rogier Creemers, Editor of China Copyright and Media:

In many ways, the social credit system isn’t very new. The Chinese Communist Party government has always sought to keep tabs on its citizens, for instance through the “personal file” (dang’an) system of a few decades ago. Academics and policymakers were discussing the possibility of a social credit scheme far before the advent of widespread Internet and mobile technology. What has changed is that the leadership now seems convinced that technologies such as big data, cloud computing, and the mobile Internet will provide the boost needed to turn the system into reality.

For the moment, I remain somewhat skeptical about the feasibility of the project, at least, as the all-encompassing structure to monitor behavior presented in policy documents. First and foremost, governments everywhere in the world have a history of bungling ambitious information and communications technology (ICT) projects, and the simple scale and complexity of the envisaged Chinese system provides a particularly daunting technical challenge. One element of this is information gathering. The Shanghai municipal government, for instance, published a catalogue of information points to be entered into the credit system, which listed over 1,200 items. About 1,000 of these concern businesses, while the rest are information concerning individual citizens. Entering, maintaining, and updating these entries is a mammoth task, and every error reduces the efficacy of the system. Moreover, this list is to be supplemented by the vast amounts of data generated in private online business platforms, through different systems, with different modes of information collection, processing and storage, and so on. It will be a considerable feat merely to ensure interoperability. Even if all of this was to work, the next challenge would be to derive meaningful knowledge and insight from the resulting ocean of data. Again, this would be hugely costly in terms of resources, with possible gains uncertain and the potential for error considerable.

But perhaps the biggest challenge is political. At the most basic level, the purported idea of scoring individuals is to reward desirable behavior and punish undesirable behavior. That, in turn, may require some debate about how certain behaviors are to be classified and what weight should be given to each. This question is rather similar to the question how cadres should be evaluated—an infamously thorny problem that equally remains to be resolved.

Nevertheless, I think that the social credit system will generate a considerable number of partial successes. Even if it will not be possible to rate everyone all the time, it is likely that certain categories of professionals, such as doctors or teachers, will come under increasing scrutiny. Even if it is impossible to correlate all kinds of behavior, it is already the case that convicted debtors are barred from making luxury purchases. To me, the interesting question is which analytical framework is most apposite in understanding what happens: is this a classically authoritarian attempt at mind control, or a somewhat more banal Weberian expansion of the bureaucracy?

Peter Mattis, Fellow with The Jamestown Foundation and Samantha Hoffman, independent China analyst:

Judging the merits of China’s efforts to employ big data to use credit-scoring systems as a form of internal surveillance can only be done within the broader context of Beijing’s effort to modernize the internal security apparatus. We are much more accustomed to hearing about “informatization” in the context of military modernization, but, ever since 10,000 Falungong practitioners surprised the leadership by demonstrating in front of Zhongnanhai in April 1999, the internal security services have been researching how to better employ intelligence and surveillance technology to police, shape, and control Chinese society. At the heart of this kind of surveillance is the desire to preempt problems before they begin.

As Rogier Creemers has pointed out, China’s social credit system, is not new — even within the context of technology-enabled surveillance and policing. The social credit system has clear antecedents in the broader official Chinese discussion of “public security informatization” in the late 2000s and early 2010s, and the disgraced former security chief Zhou Yongkang arguably is the father. The ideas behind the social credit system were part of a series of articles (since scrubbed from the Internet) in which Zhou is credited as the author describing a “social management system” to monitor happiness, encourage compliance, and shape decisions that could affect social stability. In a social management sense, the concept of monitoring, compliance and shaping stretches back decades, but the technological advances to see these aspirations realized is more recent.

The “grid management system” that caught Western attention in the last two years is one of the best examples of the marriage between traditional C.C.P. governing strategies and modern surveillance technology. The current version of the “grid(-ized)” (网格化) policing concept first emerged, publicly, between 2001 and 2002, particularly in Shanghai, and was based on earlier concepts that designated administrators to monitor a “grid” based on a specified number of people. Pilot “grid” policing programs were implemented in multiple cities throughout the early 2000s. These focused on harnessing modern technology to engage in the prevention and control of social order problems — applying the concept of preempting threats to modern technology. This developed by 2005 into “grid management” (网格化管理), a slightly broader social-management oriented concept, which was first openly implemented in Dongcheng (Beijing), and several other cities from 2005 onward.

Preempting is about more than simply identifying and eliminating threats; it is also about a process of shaping social demands so that the Party-state’s security apparatus has better control and faces smaller challenges. Social management is the process by which the party leadership attempts to manage its relationship with both the party cadres and society, to ensure that it remains the ultimate authority in power. Part of the social management innovation process is about not only using technology to censor thought but also to actively shape it. The political security the Party is trying to preserve is best served when people choose not to challenge Beijing’s authority.

The question is not whether the social credit system will increase Beijing’s capacity for control, but how it will affect the behavior of Chinese citizenry on top of the broader, more action-oriented surveillance policy and capabilities. The evolution of state surveillance since the turn of the millennium has followed a clear path:

  1. deployment of more sophisticated surveillance systems and rebuilding of informant networks;
  2. database integration between local, provincial, and national authorities;
  3. automation of data sharing and task assignment; and now
  4. deploying a system-wide surveillance system that allows individual tracking with more scrutiny than currently allowed by true-name registration for telecommunications services, travel and logistics, as well as a variety of other services in daily life.

The effectiveness of the social credit system ultimately will be whether it succeeds in shaping people’s behavior in ways predictable to the authorities, because the system will undoubtedly strengthen surveillance and investigative capabilities of the Chinese state.

Pamela Kyle Crossley, Collis Professor of History, Dartmouth College:

Could be missing something about this question — is there some place in the world where big data is not increasing state control?

“Data” can mean very specific things to people in the tech world, but in society generally people assume that governments always will be able to collect information massively and instantly. People are as intimidated by inaccurate information collection as they are by accurate information collection. It is “data” as an absolute that makes them cautious and suspicious. While in the United States we associate government data collection with passive surveillance and regard the voluntary surrender of huge amounts of personal information to commercial entities as some other kind of thing, in China there generally is no illusion that such a distinction exists. As for social credit, it is already established in the United States. Your FICO score influences how quickly you will get on an airplane (or whether you will at all), and your social media ratings from Facebook or commercial “reputation” sites influence whether you get a job or a promotion. The snares will only increase from here on. The difference is, the Chinese public is already more prepared for the integration of commercial, military, and security information collection. As a consequence, Chinese are better controlled through intimidation and self-censorship than their counterparts in the U.S. will be for a couple of decades.

Though social control through big data has strong parallels in both China and the U.S., there are differences. One is the unwillingness of the Chinese government to outsource completely its surveillance and censoring technologies to the commercial sector — not least because American companies are still critical in China’s big data effort. It is a structural difference with the U.S., where big data companies are full partners with government and occasionally can advance their own priorities at the expense of state control. In addition, China uses its commercial law (and particularly investment thresholds) to exclude tiny tech start-ups from competing with the larger, fully tamed corporations; in this way “disruptive,” rogue enterprises that are the normal breeding ground for Virtual Private Network (VPN) and proxy schemes that might circumvent the censoring structures are unviable by definition. The institutional strangling of a wide variety of innovation is obvious. More important, big data depends upon scope and speed — you need more and more of both. The Chinese strategy at present is to increase the speed (of intervention and accumulation, not of data exchange) by narrowing the scope, making China a digital island. It can’t work, because the focus on controlling routers and logarithms and even physical signals ultimately will divert attention from understanding data content to controlling the perimeters of data transfer, inhibiting both speed and scope. We already see some of the effects of this in the exit from China of major international data corporations.

Inside China’s plan to give every citizen a character score   [LINK]

china credit 240
(Image credit: Ian Berry/Magnum)

In the first instalment in a two-part special into how our data is used or misused, New Scientist looks at China's ambitious Social Credit System

By Hal Hodson

Where you go, what you buy, who you know, how many points are on your driving licence, how your pupils rate you. These are just a few of the measures which the Chinese government plans to use to give scores to all its citizens.

China’s Social Credit System (SCS) will come up with these ratings by linking up personal data held by banks, e-commerce sites and social media. The scores will serve not just to indicate an individual’s credit risk, but could be used by potential landlords, employers and even romantic partners to gauge an individual’s character.

“It isn’t just about financial creditworthiness,” says Rogier Creemers, who studies Chinese media policy and political change at the University of Oxford. “All that behaviour will be integrated into one comprehensive assessment of you as a person, which will then be used to make you eligible or ineligible for certain jobs, or social services.”

One of the earliest components of the system is called Sesame Credit – a scoring system built and run by Ant Financial, a subsidiary of the Chinese e-commerce giant Alibaba. It assigns citizens a score of between 350 and 950 points based on factors such as their financial history. Spending more through Alibaba’s payment app, Alipay, or doing financial transactions involving friends through Sesame Credit, can also raise your score.

The higher your score, the more opportunities it opens up. People with a score of 600 or more can rent cars from the Chinese companies and Car Inc, without putting down a deposit. A score higher than 650 lets people check out of hotels faster, while more than 700 earns a reduction in paperwork for visas to Singapore. A search on Chinese social networks shows individuals boasting about achieving high scores.

Sesame Credit is just one step towards the bigger, all-encompassing national system. By 2020 the SCS will take into accounts points on your driver’s license and how you are evaluated in your career as a doctor, lawyer or teacher, says Creemers. “Sesame Credit is one piece in the bigger picture,” says Clement Chen, a privacy law specialist at the University of Hong Kong.

The Chinese government already has a website that will allow any citizen to check out another’s credit rating. The site uses data from 37 central government departments and is run with help from Baidu, China’s main search engine. Any court judgements and other interactions with the state are listed. Its functionality will be ramped up over the coming years and will presumably be linked with a version of Sesame Credit as the 2020 deadline approaches.

Mega platform

The real threat will arise when the government collates myriad other sources, painting a complete picture of its citizens in data, says Chen. “It aims to collect nearly every aspect about citizens and integrate it into a mega platform, so this information can be shared between public bodies.”

Unsurprisingly, Sesame Credit has received some negative press in the Western media. Articles repeatedly claim that Sesame Credit would take the behaviour of people’s friends into account when determining their score, and that it would monitor social media activity.

In a statement sent to New Scientist, Ant Financial refutes some of these claims. “Materials published on social media platforms do not affect our users’ personal Sesame Credit score,” the company said. Chen says he is not aware of any part of the system that judges individuals based on the behaviour of their friends.

Creemers, who translated publicly released Chinese government documents detailing SCS into English, says the panic around his work is typical of Western media’s coverage of China. “Pretty much anything China does makes people panicked,” says Creemers. “And many times we don’t recognise that we are doing similar things.”

For starters, people in the West are often tracked just as relentlessly, but by corporations seeking profits. Of course, that doesn’t mean China’s intent to monitor and score its populace isn’t worrying.

Alibaba’s Sesame Credit and similar systems built by Chinese tech companies certainly match the requirements outlined by the government for SCS, but the link between what the government wants and what these companies are doing is never explicit, Creemers says.

And Sesame Credit is open about its links with the Chinese government. “Sesame Credit works closely with the Ministry of Public Security, the Supreme People’s Court, the Ministry of Education and the State Administration for Industry and Commerce to collect data,” an Ant Financial spokesperson said.

Unique IDs for monitoring

Construction of the SCS is already well under way. In June this year, the government announced that every organisation in China – companies, NGOs and government bodies – would be given a unique identification number to facilitate the monitoring of their activities.

Chen says that the “megasystem” is designed to limit a wide range of risks, not just financial ones: “non-compliance with contracts, insincerity in selling goods, or failing to comply with safety standards during the production of drugs or the construction of a bridge” are examples. “It covers business actors, as well as individuals.

“I am curious about how serious the government is about scoring food and drug safety,” he adds. “That could be a part that most of the Chinese public would say yes to.”

He says the scoring and monitoring of businesses is welcome, but that applying the same level of surveillance to individuals is worrying. “One might think of it as a mega surveillance system, as almost every aspect of citizens’ lives can be interpreted,” he says.

Christo Wilson, a computer scientist at Northeastern University in Boston, suggests that SCS may spawn a kind of black market in which people can pay for fake online profile details which will boost their scores, much like existing grey areas in which social network followers can be “bought” and Likes on posts can be paid for.

“The more important you make that number, the more people are going to try to manipulate it, and the more data you include, the easier it becomes to manipulate it,” he says. “Affixing that kind of value to social information, the black market is going to go crazy.”

‘Orwellian dystopia’ or trustworthy nation?
The facts on China’s social credit system

App Development and Condiments

By Oiwan Lam

China is on the verge of launching a nationwide rating system intended to measure citizens’ trustworthiness in the eyes of the Chinese government.

Combining citizens’ financial records, online shopping data, social media behaviors and employment history, the system will produce a combined “social credit” score for each and every Chinese citizen. Unlike a credit score in the western finance system, which typically uses a person’s financial records to determine their creditworthiness and set conditions of a loan, the Chinese model goes well beyond an individual’s financial profile.

According to the Chinese government’s Planning Outline for the Construction of a Social Credit System, the system aims to measure and enhance “trust” (誠信) between and among government, commercial sectors and citizens and to “strengthen sincerity in government affairs, commercial sincerity, social sincerity and the construction of judicial credibility.”

The Chinese government has started testing the system by authorizing a number of credit service agencies to collect, evaluate and manage peoples’s credit information. Among these agencies is a company affiliated with Alibaba which has piloted the system through a game-like app called Sesame Credit.

Sesame Credit measures a person’s overall “goodness” as a citizen and encourages users to share their scores with friends. The score is updated each month based on a person’s online activities, provided that they’re conducted through Alibaba platforms and services.

The video above, which went viral in late December, describes the game as an “Orwellian dystopia”.

Since Chinese authorities first released draft plans for the project in 2014, there have been multiple waves of news stories about the system, some of them more trustworthy than others. Recent media coverage and controversy inspired Global Voices’ China team to develop a set of frequently asked questions and answers about the social credit system.

How do credit service agencies calculate an individual’s credit score?

Different credit service agencies have developed unique algorithms for calculating social credit. According to Sesame Credit’s official explanation, the score is built upon personal data including:

  • social status, such as education and professional background
  • credit history, generated from Alipay and other Alibaba-affiliated and partnered finance records
  • ability to fulfill a contract, meaning cash, stock and investment records
  • social connections, or the credit score of one’s social connections or friend network
  • behavior patterns based on online consumption and other activities

Exactly what sort of activities will result in the reduction of credit has not been publicized. But major online content service providers such as Weibo have a user blacklist based on community reports of scams and “rumors”, a term often used to describe political criticism. This has generated widespread concern that distributing politically sensitive content could result in a lower credit score.

How can an individual gain credit?

Based on the above mentioned algorithm, Sesame Credit offers some tips to help individuals improve their scores:

  • use online payments to buy expensive services such as in finance and investment
  • use real-name registration and show off your education and professional background
  • befriend people with high credit scores and unfriend those with low credit scores, especially those who don’t use their real name online
  • give donations and promote “positive energy” online

The second and third suggestions here can easily bleed into political territory, as they encourage citizens to use only their real identities online. For any person involved in critical speech or news reporting on government activities, using an alias is often imperative to maintaining one’s safety. The final suggestion, concerning the spread of “positive energy” gives a nod to Chinese authorities’ increasing promotion of spreading positive messages about the government and the Communist party online.

Why are people so keen on playing the credit game?

Some netizens enjoy showing off high credit scores to their peers on social media. Aside from that, an individual with a high credit score will be promoted to VIP class for tickets, hotels and car rental services without paying a cash deposit. Other privileges include getting expedited visas through credit service’s visa processing system. For example, if your Sesame credit score is above 700, you can apply for a Singapore travel visa without supporting documents, such as an employment letter. A score of 750 can earn you an expedited visa to Luxembourg.

What are the penalties for individuals with low social credit scores?

A central idea behind social credit management is to penalize supposedly untrustworthy people. In a media interview, Sesame Credit’s chief manager Hu Tao explained the credit system is intended to make it so that “untrustworthy people can’t rent a car, can’t borrow money or even can’t find a job.” She disclosed that the Sesame team has approached China’s Education Bureau about sharing its list of students who cheated on national examinations so that they will pay for their dishonesty in their future when they are looking for jobs.

How do credit management agencies generate profit?

Credit management agencies will generate profit by using individual data to provide services to both governments and business sectors.

Internet giant Tencent’s credit service partners are from the finance sector. The company will make use of the personal data from Tecent’s 800 million users of messaging software QQ and their 400 billion photos to develop a facial recognition database that will help the finance sector to verify their clients’ identity. In the future, it will seek to provide facial recognition and identity verification services to online dating platforms, conference, and examination (such as domestic and overseas university entrance examinations) check-in.

What are the political motivations behind the social credit system?

While the social credit system is not targeted specifically at activists or dissidents — public security authorities already have developed a database monitoring friends and relatives of political dissidents — it transforms the stability control model from target-specific to all-citizen surveillance, by rewarding (or penalizing) individuals based on political orientation, financial records, consumption patterns and social connections, in order to cultivate the self-discipline of “good citizen”.

It is also a response to the moral crisis of the society where people no longer trust each others. It is commonly said that people in China have become afraid of helpingthose in need, for fear of falling into street scams. In addition, business scams, food security, and corruption have constituted a moral crisis in Chinese society. Instead of reflecting on the political-economic system that has led to the growth of crony capitalism (which has been directly enabled by government policies and practices), leaders have come to argue that the problem is rooted in the “low trust” character of Chinese culture. Thus they say the credit system in China should reflect a person’s “guan-xi” (social relation) rather than just financial record.

When facing the “big brother”-type criticism, leaders argue that China “has a history of valuing harmony above much of anything else”. Harmony here means “the overall stability of the nation” thus, in their framing, the social credit system is an innovation driven by eastern wisdom rather than western ideologies. In any case, these emerging details of the project demonstrate that China’s social credit system may go well beyond the specter of big-brother surveillance.

China wants to give all of its citizens a score
– and their rating could affect every area of their lives

The Communist Party wants to encourage good behaviour by marking all its people using online data. Those who fall short will be denied basic freedoms.

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Simon Denyer | Beijing | Saturday, 22 October 2016

Imagine a world where an authoritarian government monitors everything you do, amasses huge amounts of data on almost every interaction you make, and awards you a single score that measures how “trustworthy” you are.

In this world, anything from defaulting on a loan to criticising the ruling party, from running a red light to failing to care for your parents properly, could cause you to lose points. And in this world, your score becomes the ultimate truth of who you are – determining whether you can borrow money, get your children into the best schools or travel abroad; whether you get a room in a fancy hotel, a seat in a top restaurant – or even just get a date.

This is not the dystopian superstate of Steven Spielberg's Minority Report, in which all-knowing police stop crime before it happens. But it could be China by 2020. It is the scenario contained in China's ambitious plans to develop a far-reaching social credit system, a plan that the Communist Party hopes will build a culture of “sincerity” and a “harmonious socialist society” where “keeping trust is glorious.”

A high-level policy document released in September listed the sanctions that could be imposed on any person or company deemed to have fallen short. The overriding principle: “If trust is broken in one place, restrictions are imposed everywhere.” A whole range of privileges would be denied, while people and companies breaking social trust would also be subject to expanded daily supervision and random inspections.

The ambition is to collect every scrap of information available online about China's companies and citizens in a single place – and then assign each of them a score based on their political, commercial, social and legal “credit.”

The government hasn't announced exactly how the plan will work – for example, how scores will be compiled and different qualities weighted against one another. But the idea is that good behaviour will be rewarded and bad behaviour punished, with the Communist Party acting as the ultimate judge. This is what China calls “Internet Plus,” but critics call a 21st-century police state.

Harnessing the power of big data and the ubiquity of smartphones, ecommerce and social media in a society where 700 million people live large parts of their lives online, the plan will also vacuum up court, police, banking, tax and employment records. Doctors, teachers, local governments and businesses could additionally be scored by citizens for their professionalism and probity.

“China is moving towards a totalitarian society, where the government controls and affects individuals' private lives,” said Beijing-based novelist and social commentator Murong Xuecun. “This is like Big Brother, who has all your information and can harm you in any way he wants.”

At the heart of the social credit system is an attempt to control China's vast, anarchic and poorly regulated market economy, to punish companies selling poisoned food or phony medicine, to expose doctors taking bribes and uncover con men preying on the vulnerable. “Fraud has become ever more common in society,” Lian Weiliang, vice chairman of the National Development and Reform Commission, the country's main economic planning agency, said in April. “Swindlers have to pay a price.”

Yet in Communist China, the plans inevitably take on an authoritarian aspect: this is not just about regulating the economy, but also about creating a new socialist utopia under the Communist Party's benevolent guidance.

“A huge part of Chinese political theatre is to claim that there is an idealised future, a utopia to head towards,” said Rogier Creemers, a professor of law and governance at Leiden University in the Netherlands. “Now after half a century of Leninism, and with technological developments that allow for the vast collection and processing of information, there is much less distance between the loftiness of the party's ambition and its hypothetical capability of actually doing something,” he said.

But the narrowing of that distance raises expectations, says Creemers, who adds that the party could be biting off more than it can chew. Assigning all of China's people a social credit rating that weighs up and scores every aspect of their behaviour would not only be a gigantic technological challenge but also thoroughly subjective – and could be extremely unpopular.

“From a technological feasibility question to a political feasibility question, to actually get to a score, to roll this out across a population of 1.3 billion, that would be a huge challenge,” Creemers said.

The Communist Party may be obsessed with control but it is also sensitive to public opinion, and authorities were forced to backtrack after a pilot project in southern China in 2010 provoked a backlash. That project, launched in Jiangu province's Suining County in 2010, gave citizens points for good behaviour, up to a maximum of 1,000. But a minor violation of traffic rules would cost someone 20 points, and running a red light, driving while drunk or paying a bribe would cost 50.

Some of the penalties showed the party's desire to regulate its citizens' private lives – participating in anything deemed to be a cult or failing to care for elderly relatives incurred a 50-point penalty. Other penalties reflected the party's obsession with maintaining public order and crushing any challenge to its authority – causing a “disturbance” that blocks party or government offices meant 50 points off; using the internet to falsely accuse others resulted in a 100-point deduction. Winning a “national honour” – such as being classified as a model citizen or worker – added 100 points to someone's score.

On this basis, citizens were classified into four levels: those given an “A” grade qualified for government support when starting a business and preferential treatment when applying to join the party, government or army; or applying for a promotion. People with “D” grades were excluded from official support or employment.

The project provoked comparisons with the “good citizen cards” introduced by Japan's occupying army in China in the 1930s. On social media, residents protested that this was “society turned upside down,” and it was citizens who should be grading government officials “and not the other way around”.

The Suining government later told state media that it had revised the project, still recording social credit scores but abandoning the A-to-D classifications. Officials declined to be interviewed for this article.

Despite the outcry in Suining, the central government seems determined to press ahead with its plans. Part of the reason is economic. With few people in China owning credit cards or borrowing money from banks, credit information is scarce. There is no national equivalent of the FICO score widely used in the United States, say, to evaluate consumer credit risks.

At the same time the central government aims to police the sort of corporate malfeasance that saw tens of thousands of babies hospitalised after drinking tainted milk and infant formula in 2008, and millions of children given compromised vaccines this year. Yet it is also an attempt to use the data to enforce a moral authority as designed by the Communist Party.

The Cyberspace Administration of China wants anyone demonstrating “dishonest” online behaviour blacklisted, while a leading academic has argued that a media blacklist of “irresponsible reporting” would encourage greater self-discipline and morality in journalism.

Lester Ross, partner-in-charge of the Beijing office of law firm WilmerHale, says the rules are designed to stop anyone “stepping out of line” and could intimidate lawyers seeking to put forward an aggressive defence of their clients. He sees echoes of the Cultural Revolution, in which Mao Zedong identified “five black categories” of people considered enemies of the revolution, including landlords, rich farmers and rightists, who were singled out for struggle sessions, persecution and re-education.

Under the social credit plan, the punishments are less severe – prohibitions on riding in “soft sleeper” class on trains or going first class in planes, for example, or on staying at the finer hotels, travelling abroad, or sending children to the best schools – but nonetheless far-reaching.

Xuecun's criticism of the government won him millions of followers on weibo, China's equivalent of Twitter, until the censors swung into action. He fears the new social credit plan could bring more problems for those who dare to speak out. “My social-media account has been cancelled many times, so the government can say I am a dishonest person,” he said. “Then I can't go abroad, and can't take the train.”

Under government-approved pilot projects, eight private companies have set up credit databases that compile a wide range of online, financial and legal information. One of the most popular is Sesame Credit, part of the giant Alibaba ecommerce company that runs the world's largest online shopping platform. Tens of millions of users with high scores have been able to rent cars and bicycles without leaving deposits, company officials say, and can avoid long lines at hospitals by paying fees after leaving with a few taps on a smartphone.

The Baihe online dating site encourages users to display their Sesame Credit scores to attract potential partners; 15 per cent of its users do so. One woman, who works in advertising but declined to be named to protect her privacy, said she had used Baihe for more than two years. Looking for people who display good Sesame Credit scores helps her weed out scammers, she said.

“First I will look at his photo, then I will look at his profile,” she said. “He has to use real-name authentication. But I will trust him and talk to him if he has Sesame Credit.”

But it is far from clear that the system will be safe from scams. William Glass, a threat intelligence analyst at cybersecurity expert FireEye, says a centralised system would be both vulnerable and immensely attractive to hackers.

“There is a big market for this stuff, and as soon as this system sets up, there is great incentive for cybercriminals and even state-backed actors to go in, whether to steal information or even to alter it,” he said. “This system will be the ground truth of who you are. But considering that all this information is stored digitally, it is certainly not immutable, and people can potentially go in and change it.”

© Washington Post

China To Launch "Social Credit System"
To Monitor Everything From Jaywalking To Internet Shopping Activity  [LINK]

social media credits 01 240

In the United States "big data" is a major trend that has been adopted by almost every major retailer in an effort to figure out the precise best way to convince American's to buy more stuff they don't need.  In China, "big data" is all about population control.

As noted by the Wall Street Journal, various cities throughout China are currently piloting a "social-credit system" that will assign a "personal citizen score" to every single person based on behavior such as spending habits, turnstile violations and filial piety, which can blacklist citizens from loans, jobs, air travel. 

  • Hangzhou’s local government is piloting a “social credit” system the Communist Party has said it wants to roll out nationwide by 2020, a digital reboot of the methods of social control the regime uses to avert threats to its legitimacy.>
  •      More than three dozen local governments across China are beginning to compile digital records of social and financial behavior to rate creditworthiness. A person can incur black marks for infractions such as fare cheating, jaywalking and violating family-planning rules. The effort echoes the dang’an, a system of dossiers the Communist party keeps on urban workers’ behavior.
  •      In time, Beijing expects to draw on bigger, combined data pools, including a person’s internet activity, according to interviews with some architects of the system and a review of government documents. Algorithms would use a range of data to calculate a citizen’s rating, which would then be used to determine all manner of activities, such as who gets loans, or faster treatment at government offices or access to luxury hotels.

Input data for the social credit system would come from a variety of government sources but would also incorporate social behavior based on things like volunteer activities, academic records, social media usage and online shopping trends.

  • For initial social-credit efforts, local officials are relying on information collected by government departments, such as court records and loan and tax data. More-extensive logging of everyday habits, such as social-media use and online shopping, lies with China’s internet companies, including e-commerce giant Alibaba Group Holding Ltd.>
  •      A credit-scoring service by Alibaba affiliate Ant Financial Services—one of eight companies approved to pilot commercial experiments with social-credit scoring—assigns ratings based on information such as when customers shop online, what they buy and what phone they use. If users opt in, the score can also consider education levels and legal records. Perks in the past for getting high marks have included express security screening at the Beijing airport, part of an Ant agreement with the airport.
  •      “Especially for young people, your online behavior goes towards building up your online credit profile,” said Joe Tsai, Alibaba’s executive vice chairman, “and we want people to be aware of that so they know to behave themselves better.”

Of course, if it wasn't clear, the objective of the "social credit system", at least according to slogans printed in planning docs is to "“allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.”  Seems fairly reasonable...though we suspect there may be some issues surrounding who defines "discredited"...but we're sure it will be fine.

  • The endeavor reinforces President Xi Jinping’s campaign to tighten his grip on the country and dictate morality at a time of economic uncertainty that threatens to undermine the party. Mr. Xi in October called for innovation in “social governance” that would “heighten the capacity to forecast and prevent all manner of risks.”>
  •      The national social-credit system’s aim, according to a slogan repeated in planning documents, is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.”
  •      Zan Aizong, a Hangzhou human-rights activist, sees the system, once it’s fully operational, as an Orwellian exercise to keep closer tabs on a populace already lacking basic liberties such as freedom of speech. “Tracking everyone that way,” Mr. Zan said, “it’s just like ‘1984.’ ”

Luckily, a "blacklisting system" has already been created that can seamlessly be tied right into the social credit system.  The system is designed to automatically provide "green lanes" for faster access to government services for "well-behaved" citizens while levying travel bans and other punishments on those who get out of line. 

  • China’s judiciary has already created a blacklisting system that would tie into the national social-credit operation.Zhuang Daohe, a Hangzhou legal scholar, cites the example of a client, part-owner of a travel company, who now can’t buy tickets for planes or high-speed trains because a Hangzhou court put him on a blacklist after he lost a dispute with a landlord.>
  •      “This has had a huge impact on the business,” said the client’s wife. “He can’t travel with clients anymore.” Added Mr. Zhuang: “What happens when it punishes the wrong person?”
  •      Blacklists will expose offenders and restrict them from certain activities, while well-behaved citizens will earn access to “green lanes” that provide faster government services, the blueprint said. Citizens in jobs deemed sensitive—lawyers, accountants, teachers, journalists—will be subject to enhanced scrutiny, it said.
  •      Penalties for low scorers will include higher barriers to obtaining loans and bans on indulgences such as luxury hotels,according to state-media reports.

But we're thankful to be living right here in the U.S. where those with dissenting opinions are simply labelled as "useful idiots of Putin" and subjected to an all-out smear campaign by a corrupt mainstream media.

Cyber Care Café

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