How China’s Social Scoring System is Changing Society
“By 2020, every person in China will have been enrolled in an enormous national database, where the accumulation of all manner of lifetime successes and failures will be reflected in a single score.”
The social credit score is, these detractors say, an assessment of your worth to society, a kind of social engineering not unlike that seen in Huxley’s Brave New World. And there’s an Orwellian element, too, they say: the new system will “reward those who report acts of breach of trust”, and “forge a public opinion environment that trust-keeping is glorious.”
There’s not much room, it seems, for second chances or nuance. After all, there are many people who are highly competent in one area of their life, but fall behind in another. What’s more, the system may mark down individuals based on the people they choose to associate with, both personally and professionally.
Perhaps that’s why Human Rights Watch has described the proposed system as “chilling”. Others, however, say that such a system is desperately needed in China, where many people don’t own houses or credit cards. These people are, says blogger Wen Quan, absent of any information and, in effect, are free to commit fraud or any other kind of crime and then simply move away.
There is an argument that in the Digital Age, in cities or countries with millions—or billions—of inhabitants, a social credit score is a natural progression from word-of-mouth reputation, which in simpler times and smaller settlements served to divide those who were of good character from those who weren’t. The Chinese government suggest that it serves as both social and market regulation, rewarding good behaviour and punishing bad.
“A young woman from Beijing expressed her delight that, due to her strong social credit score, she was not required to leave a cash deposit for a hotel she had recently booked.”
And there are certainly perks for those who bear their score in mind. Speaking to the BBC, a young woman from Beijing expressed her delight that, due to her strong social credit score, she was not required to leave a cash deposit for a hotel she had recently booked.
For giant companies like Alibaba—the world’s largest retailer and one of the largest internet companies—such a score is a good thing. Sesame Credit, the financial wing of the company, is one of eight Chinese organisations already issuing their own social credit scores under state-approved pilot projects. It says it does not track “materials published on social media platforms by users”, but it does track their consumption. Li Yingyun, Sesame’s Technology Director, told the Chinese magazine Caixin that “someone who plays video games for 10 hours a day … would be considered an idle person.”
Another interesting aspect of the new social credit score is the impact it could have on romantic relationships. The matchmaking service Baihe has partnered with Sesame to promote clients with good credit scores, and now many of their 90 million clients are displaying their scores voluntarily to show their desirability.
Comparisons with Charlie Brooker’s Black Mirror—an episode of which purportedly describes a similar social credit system—abound. But there is an important distinction to be made: under the new Chinese system, it is not your fellow citizens that are judging you, but the state or corporation. And while that might sound far worse, it’s worth noting that millions of Chinese citizens have voluntarily signed up for the social credit programme before it becomes mandatory in 2020.
Of course, there’s an irony in all this. In the West, we freely rate restaurants and films, books and doctors. We virtue-signal and look to promote our ‘best selves’ online. Our popularity on Twitter and Reddit and Instagram is defined by the perceived quality of our posts. In short, we seek social approval every day – sometimes, it must be said – by exaggerating or even falsifying our credentials. And yet, we bridle at the mention of a system that uses data, however clumsily, to do something that is not wholly dissimilar.
Is China moving towards a dystopian future in which there are no second chances, no juvenile mistakes, and where people are condemned always to be who they once were? Or are they simply using the Internet and data to regulate a chaotic market and restore trust and honesty to Chinese society? Only time will tell.
This story is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. However, if something has piqued your interest and you would like to find out more or discuss what investments might be suitable for you, please contact one of our Investment Managers on 020 7337 0777.