COVID-19 (or the Coronavirus) is having a massive impact on the world, but it could be impacting your data security too. Here’s what you need to know.
What is China’s Social Credit System and What Does it Mean for Online Identity?
China’s Social Credit System is set to roll out this year and could majorly impact digital identity. Here’s everything you need to know.
China’s Social Credit System (SCS) has been in the news for over a year now. Not only will the system have a massive effect on the country’s 1.4 billion citizens, but there are massive implications when it comes to digital identity too. The idea sounds Orwellian, but it’s a lot more complicated than it appears to be.
The system was first proposed in 2014 and was meant to roll out this year, but it will likely be another couple of years before it is fully operational. In this article, we outline what exactly China’s Social Credit System is, how it works, the criticisms it has faced, and the implications it has on big data and online identity. Let’s dive in.
What is China’s Social Credit System?
China’s Social Credit System is similar to how a regular credit score functions. Now a normal credit score only deals with your current financial state and financial history. A typical credit score is decided by five different factors: payment history, utilization, length of credit history, recent activity, and overall capacity. However, China’s social credit score expands the typical credit score system into all ways of life.
According to the Chinese government, the system is designed to monitor and engineer better behavior on an individual level and a business level. The system awards good behavior, which leads to a higher score, and punishes bad behavior, which leads to a lower score. China already has the bones of this system in place (some cities and provinces have created their own version of SCS to curb what is deemed to be negative behavior) but the SCS takes this activity to a whole new level.
How the SCS works
The SCS has a few different functions. There is one system for citizens, one for businesses and other organizations, and one for government officials. While the full system has not been rolled out yet, here’s what we know so far from pilot systems and reports. Do keep in mind that there is no unified Social Credit System yet; different regions are currently using different methods.
For citizens, everyone starts with the same score (the city of Rongcheng gives citizens 1000 points to start). Citizens are then closely monitored in all areas of life and are rated on how they behave. Users can increase their points by doing things such as making donations, praising the Chinese government online, and helping the less fortunate. Having more points means that users are more likely to receive a promotion at work, get priority status for their children’s school admissions, tax breaks, and better access to loans and other financial services. Doesn’t sound too bad, right?
However, having a lower score can lead to disastrous consequences, and losing points is easy. Users can lose points by not visiting their elderly parents, traffic violations, cheating in online games, failing to sincerely apologize for crimes committed, and spreading rumors on the internet. Having a lower score can mean that users are not able to travel by plane or train, aren’t eligible for certain jobs, can be subject to public shaming, and can be denied full access to public services.
For businesses, the SCS focuses more on ensuring that the laws are followed, taxes are paid on time, and that product and service quality are adequate. According to the Chinese government, the goal is to create a fair, transparent, and predictable business environment. However, the corporate side of SCS poses some difficult problems.
For instance, businesses need to take responsibility for their business partners. Even if a company meets all of the legal requirements, they can still be penalized if another company they work with is on a blacklist. Because of this, companies with a lower score will have an incredibly difficult time forming partnerships with reputable businesses.
Companies with a lower score on the SCS face more frequent and intense auditing, the possibility of public shaming, and may even be excluded from public procurement opportunities. Businesses can land on a blacklist from either having a low score, or for a particular type of violation.
The third part of the SCS, for government officials, focuses on how well government orders are carried out. Essentially, the Chinese government wants to ensure that officials are politically loyal, performing well, and corruption-free.
It is important to note that all three branches within the SCS function differently. Individuals are scored differently from businesses, who are scored differently from government officials. So far, no regional government has enforced all three aspects of the SCS.
The SelfKey Identity Wallet is a free identity solution for Windows, Linux and Mac. Get yours today!
Criticisms of the SCS
Why so many are scared of the SCS is because some of the “crimes” are incredibly ambiguous (how do you know if someone’s apology is insincere?), and the punishments are extreme and take away basic human rights from Chinese citizens. For example, in 2016 a Chinese lawyer was not allowed to buy a plane ticket because an apology he had issued was deemed to be insincere. Judging how sincere someone’s apology is is incredibly subjective, and not something that should prevent a person from having basic rights.
That being said, Chinese citizens are already under an incredible amount of government surveillance and there have been no criticisms of the SCS from within the country. Probably because its citizens are too scared to speak up.
There are also doubts that the SCS will ever be rolled out on a national level. The program was supposed to start this year, and while individual cities and provinces have laid some groundwork, the Chinese government has yet to introduce anything nationally. The full roll out of the program could be years away simply due to the vastness of China. However, four provincial level governments already have their own version of the SCS.
The Chinese government faces other problems too, specifically regarding corruption. The whole purpose of the SCS is to share information and be transparent. If people are focused on their own interests over the government’s, that’s a big power struggle waiting to happen.
How the SCS impacts online identity
One of the biggest implications of the SCS is the sheer amount of data that the Chinese government will have access to. The SCS is perpetual surveillance, and a massive collection of personal information will be available about each citizen. The system effectively strips Chinese citizens of any rights to their online identity.
Unfortunately, this isn’t anything new for China. The internet is already heavily censored in China, and law enforcement in the country has been using facial recognition software and drones to identify citizens who are breaking the law. The control Chinese citizens have over their online identity is negligible right now, but with the SCS, it disappears completely.
It’s a disturbing realization. In the Western world, we spend a fair amount of time and effort trying to keep our online identity from falling into the wrong hands. Although data breaches are a regular occurence, ultimately we can choose what to delete and use tools to help keep our personal information safe. In China, these options don’t exist. Under the SCS, the government watches your every move both online and offline. Online identity is public, and can be used against you if you make a wrong decision in the eyes of the government.
And then there is the issue of how all of this data is protected. The regional versions of the SCS combine both traditional and digital monitoring. Some believe that China’s current technological capabilities have been overestimated. In fact when news network ABC Australia contacted the government agency tasked with creating the SCS for a statement, they were asked to send their request by fax. Which makes you wonder, how protected is all of this personal information online and how vulnerable is it to hackers? We might not get the answers to these questions until the country suffers a massive data breach.
Conclusion – China’s Social Credit System and Online Identity
China’s Social Credit System is frightening in more ways than one. Much of it feels like an episode of Black Mirror, and that presumption isn’t wrong. Not only does the SCS limit personal freedoms on a system that is astoundingly arbitrary, but it prevents Chinese citizens and businesses from regaining a positive status.
Online identity is something that is already incredibly fragile in China right now. When the SCS comes into effect, any personal control is gone. It is already incredibly difficult for Chinese citizens to speak out against their government today. Citizens can disappear, be placed under house arrest, forced to stay in the country, or have their family threatened for expressing dissent. Once the SCS is in place, dissent becomes nearly impossible.
While the SCS has yet to roll out, and it’s unclear when that will happen, it will fundamentally alter the concept of not only online identity, but also human rights. The implications are frightening, and it’s unclear what, if anything, can be done to prevent it.