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The Creepy Social Credit System that Just May Become Reality in China

Most consumers the world over probably have some sort of “love–hate relationship” with their credit rating. Totally understandable. But how would you feel if your credit score were common knowledge for all to see? And if this score began to take into account such wholly unrelated considerations as who you’re friends with on social media and how outspoken you are on, say, politically sensitive issues?

Those reading this are probably beginning to wonder what I’m smoking. And if I have any of the good shit leftover. I’d think the same. Sounds more than just a little paranoid. Some sort of Cultural Revolution 2.0, only this time with a capitalist twist.

And yet, the wheels are already in motion in China.

As it is now, a huge proportion of consumers in China don’t know what their credit score is, nor do they have a measurable credit history. Less than 25% of the population have credit scores produced from a traditional rating system—through China’s only official issuer of credit, The People’s Bank of China. However, this is changing fast with the increase in middle-class spending habits and the increasingly streamlined marriage of e-commerce, online payment systems and social media apps.

Enter Sesame Credit, brought to you by the good people at Alibaba (in a partnership with Tencent Holdings Ltd), as the leading force behind this change. This recently launched credit scoring system is “opt in,” but it is speculated to become the framework of a mandatory “social credit” scoring system by 2020. Alibaba and Tencent dominate all social media and e-commerce platforms in China, so the pool of big data that they have nearly exclusive access to is staggering. And it is something that the Chinese government is eager to leverage on a whole new level, seemingly in-line with dear leader Xi Jinping’s relentless campaign to push out foreign media, clean up corruption, and continue working to strengthen the nation’s faltering economy.

Police security at nightclub

China is already seeing a flood of obedient consumers flaunting their Sesame Credit scores online to total strangers. Foolish? Perhaps. But is it really all that surprising given the way people interact and judge others on Facebook, Instagram, or Snapchat. And in China’s case, on Weibo (China’s answer to Twitter) or the massively popular WeChat. Consumer culture and social media go hand in hand when it comes to encouraging people to constantly “one up” others, especially in regard to economic status—new car, watch, iPhone, or that girl they met out partying in Shanghai. Most of us who are active on social media do it to a certain extent, but I digress.

Getting back to credit scores in particular, the practice of showing off one’s status is still relatively new, but it seems unlikely to lose popularity anytime soon. Unlike many social media trends in China, it didn’t begin from some random jackass Tuhao or the masses obsession with anything iPhone related. It came about from a strategized campaign developed by Alibaba and approved and monitored by the government, reports the BBC.

Officially, it may sound tolerable enough—the Sesame Credit score is based on the consumer’s financial transaction history from a variety of e-commerce sites plus partners, such as ride-sharing app Didi Kuaidi. The company admittedly tracks the types of items purchased as well, taking these into account with how they determine scores, which range anywhere from 350 to 950. The BBC also mentions that Sesame Credit would not grant an interview due to concerns that the government would revoke the company’s right to offer credit scores if they spoke with any foreign news outlets. However, the company did issue a statement stressing that they do not track users’ social media activity as part of calculating scores. Fair enough, I’m placated.

Where this new culture of credit scoring takes a really nasty turn though is through the gamification of it all, aggressively promoted by Sesame Credit themselves and other online businesses that are jumping on the bandwagon. Apparently, there is a new mobile game designed precisely for the sharing and judging of others based on their Sesame Credit score. Players are eligible for cash prizes through a combination of outranking or guessing the scores of their peers. Inviting friends to join Sesame Credit also boosts one’s score. In a culture where social pressure is the norm, fitting in with the group is a must, simple games like this are irresistible. Don’t be the outcast “nail that sticks up.”

Baihe, China’s largest matchmaking service, is also in on the game. They provide incentives such as more highly visible profiles to members who have Sesame Credit scores and wish to make these viewable by others. What better to go hand in hand with the already established Chinese “tradition” of buying a house and car in order to demonstrate one’s economic status and worthiness to the in-laws prior to marriage? Not only do guys get pressured about the ability to purchase a home (or to use their own parent’s money to do so) but many may soon be forced to share their credit score to compete with the millions of others actively seeking wives.

Additionally, similar to the perks one gets with a great credit score and premium credit cards in other countries, there are plenty of trivial benefits that tempt Chinese consumers to track their Sesame Credit scores, such as car rentals without the need for a cash deposit, VIP checkout at certain hotels, and even vague mention of fast tracking the visa application process for those wishing to travel abroad.

Luxury shopping mall in China

Concerning bigger government plans by 2020, Sesame Credit is believed by some to more or less function as a pilot program for the greater Social Credit System (SCS). Despite finance-related score calculations, the SCS may very well take into account someone’s morals and political compliance as major factors in determining their social credit score. Weibo and WeChat are already heavily monitored and censored so tying this in with one’s credit rating does not seem all that far-fetched after all.

In a more in-depth look at credit scores in China, Quartz includes comments from Rogier Creemer, researcher of Chinese law and media at the University of Oxford:

“The government wants to build a platform that leverages things like big data, mobile internet, and cloud computing to measure and evaluate different levels of people’s lives in order to create a gamified nudging for people to behave better. In China, we know that will happen in finance, but the documents also include things like your driving record, and also your professional evaluation, like how good a lawyer your customers think you are.”

Given the difficulty to confirm more of the facts behind China’s proposed SCS, it’s difficult to say at this point what is merely hype and what are legitimate (and dire) warnings of what’s to come. Antimedia, Zerohedge, Infowars, and Privacy Online News have all had their say on this topic.

What can be said right now is this nightmarish social credit idea is probably causing even more anxiety to those out there who are working hard to start a business or buy a home. For the majority of Chinese citizens, getting a loan is hard enough already. Fast forward to 2020 and imagine some suit at the bank denying someone’s application for a line of credit: “Well, he qualifies based on his purchase history and current income… but he also re-posted a meme besmirching the communist party two years back: Denied.”

In typical fashion, a tedious bureaucratic document has been published and it outlines everything about the proposed SCS, but it is nearly impossible to decipher it all. Time will only tell whether this plan will indeed become a reality.

  • tomsawyer

    I’m going to be earning 5,500/month in a tier 2 city next September. Teaching. This is a big pay cut for me but salary isn’t everything.