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Security vs. liberty: China's Orwellian dystopia?

Described by The Economist as ‘the digital totalitarian state’, China’s social-credit system may well be run on a national scale by 2020. Whilst the Chinese government believes that it will help solve food safety problems, crack-down on corruption and academic dishonesty, critics of the system call it the ultimate Orwellian dystopia. With the advance of technology, governmental use of big data and surveillance ‘to protect the interest of the people’ is entering a grey area, blurring the lines between national security and the illegal monitoring of civilians. This has been exemplified by the files that Snowden released, which documented the NSA (National Security Agency), GCHQ (Government Communication Headquarters) and other western security agencies’ questionable surveillance practices on their own country’s civilians and those abroad. This conjures up the important debate of security versus liberty, a theme we have been exploring at D4C club in our school.


With a population of 1.3 billion and a land area of 9.5 million km², it is hard to ensure that laws are being implemented fairly across the whole country. Some believe that the social-credit system could help overcome ‘societal ills’ such as corruption, tax evasion and food safety problems. Incidences such as the 2008 baby-milk and heparin adulteration scandal are just a few examples of the multitude of social problems that has fuelled the growing sense of discontent and mistrust between citizens and the Chinese government. In fact, according to a briefing published by China’s State Council, it hopes that the system’s use of big data will ‘improve the level of integrity’, ‘increase the country’s international competitiveness’ and ‘enhance societal progression’.

The social-credit system

Although very little is known about the exact workings of China’s social-credit system, it is clear that big data will be used to monitor businesses and give citizens a score. One's score will then determine their eligibility for loans, jobs and insurance premiums, and will also affect their access to social and internet services. The pilot projects carried out by local governments and businesses suggest that the social-credit system will be a combination of dang’an (personal files), a traditional credit system, a blacklisting system, social inputs, and the monitoring of online activities.

Dang’an are the public records of Chinese citizens, and in particular, those of urban residents. These personal files are kept by the local police station and employers, and are opened at the start of primary school. It keeps track of all school and work reports, and has a huge influence on job and promotion opportunities. Traditionally, such files have been kept as a hard copy; however, increased mobility has led to a breakdown in the system, meaning that it no longer fulfilled its original purpose as a form of social control. Therefore, under the social-credit system, dang’an will most certainly become digitalised, and may well play a huge role in determining the scores of all citizens.

Traditional credit systems such as FICO have been adopted by many countries to minimise financial risk. Currently, no such system exists in China, putting the country in danger of a credit boom risk, especially with the rise of e-commerce and the easing of credit. Under the social-credit system, data regarding loan repayment, income tax and utility bill payments will be available for review, overcoming the problem of asymmetric information between borrowers and lenders.

The ‘judgement defaulter’s list’ is a blacklisting system. Losing parties of court cases who default on payments are compiled onto this list, and sanctions and restrictions are applied. For example, a defaulter from Hangzhou was not allowed to buy airline and high-speed train tickets after he lost a dispute with his landlord; whilst companies who default on compensation could be prevented from accepting foreign investments and working on government projects. By the end of 2015, there were more than three million defaulters.

Social inputs will also play a key role in the system. For example, in Hangzhou, adults caught using half-fare student cards at subway stations are not only fined, but also see a reduction in their personal scores. Some believe that this may be extended to other social legislations, such as a failure to comply to laws such as the 2013 ‘Protection of the Rights and Interests of Elderly People’ and the two-child policy.

Perhaps the most worrying aspect of the social-credit system is the monitoring of one’s online activity. Although it is unclear how this will be implemented, it is known that the government is working with companies such as Alibaba and Tencent, which would give them access to cosumers' personal data, shopping habits and interaction with other internet users. It is also possible that the information citizens post on sites such as Weibo (owned by Alibaba) could also be tracked, thus affecting its users' score.

Pilot Projects

The social-credit system is currently being tested out by more than thirty local governments. For example, the Suining County gave each citizen a score and classified them into grades A to D. Points could be deducted for traffic violations or for misusing the Internet, whereas point would be awarded to those who win a national honour. Additionally, the grading system ensures that those with a higher grade would be favoured for a job promotion or when joining the Communist party.

Eight businesses are also involved in the running of individual pilot projects, such as the Sesame Credit system run by Alibaba. The project’s credit score ranges from 350 to 950, and claims to only be affected by its users’ financial and shopping activities. Although it is not compulsory for all Alibaba consumers, it has paired up with the dating service Baihe to encourage more to do so. Baihe offers to promote those with good credit scores by placing their profile on a more prominent spot on its company’s website, acting as an incentive for Alibaba users to participate in the program. Again, little is known as to how the credit scores are calculated; however, it is clear that five dimensions are considered - personal identity, credit history, behaviour, 'compliance' and connections. According to the project's technology director Li Yingyun, the users' credit scores can be influenced by their purchases, as Alibaba owns Taobao and Tmall (sites equivalent to ebay and Amazon). For example, users who buy video games may see a reduction in their credit score at the end of the month. Those with scores above 750 are also offered certain advantages, from being able to make hotel bookings without placing a cash deposit, to gaining access to express security screening lines at airports.

Sesame Credit (source: The Independent)

Sounds impossible?

Many are sceptical as to how successful the 2020 social-credit system will be, especially as the Suining pilot project caused a huge backlash, resulting in a revision of the program which abandoned the A to D grading system. However, the announcement of the social-credit system has not caused much concern amongst the Chinese. In fact, many are in favour for its establishment, as high scorers will benefit from the system. Some also believe that it will promote good moral behaviour, and simply see it as a more convenient and effective version of dang'an.

Moreover, the government's partnership with firms such as Alibaba and Tencent may just make this system feasible. Alibaba Group is a Chinese e-commerce company with over 400 million users. It dominates 80% of China's online shopping market, meaning that it has access to the personal information of millions. With transactions totalling to $248 billion in 2015, more than that of eBay and Amazon combined, it's role in the system certainly should not be underestimated, especially as it has an online payment system Alipay. The company also has large shares in Weibo and Youku Tudou (sites similar to Twitter and Youtube), which could allow the government to track user Internet searches and other activities. Tencent, a provider of Internet value-added services in China, can also provide the government with big data. Its popular social messaging app WeChat has over 700 million monthly active users, as it offers functions such as video conferencing and the use of Tenpay to pay overseas merchants.


It is clear that a large part of the social-credit system will be reliant on the collection of big data; however, only 45% of China's population are Internet users. So, how will this be applied to the remaining 700 million Chinese citizens, especially those who live in rural areas? The programme could easily face a similar fate to the traditional dang'an system, proving to be unpractical and ineffective.

If the system is to rebuild trust between the Chinese government and its citizens, then it must be applied to government officials too, for it to be fair. Otherwise, it will only result in worsened relations and increased suspicion.

Additionally, the pure collection of big data through companies like Alibaba and Tencent will not be useful unless a mechanism or program is developed to sift through and analyse the information. At present, the exact workings of it remains vague, but perhaps the system will adopt a 'complex algorithm' similar to that of the Sesame Credit scheme.

A slippery slope

Whilst this is a potential solution to China's increasing social problems, it could also be easily abused by those in power, risking complete governmental control. The fact that the system runs on a reward and punishment basis means that citizens will be inclined to conform to whatever the government deems as 'good' behaviour, so as to gain higher scores. This could create a social divide amongst high and low scorers, as those with lower scores will be penalised and face certain restrictions, creating a cycle of social immobility, especially if one's scores will be affected by those of their family and friends.

This is, undoubtedly, an ambitious plan. Perhaps the government will see more success through expanding the number of pilot projects, rather than adopting the system on a national scale. Whether you see this as a genuine attempt to correct social issues and increase economic efficiency, or a means for the government to gain absolute control, it is clear that the argument between security and liberty will be key in the system's development, and only time will tell how much Chinese citizens are willing to sacrifice for the 'greater good'.

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