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15.09.2020

Have Good Behaviour – Seeking Social Points

To some, it is the road to total citizen surveillance. To others, it is a way to provide greater fairness – in the people’s daily work with one another and especially in their business lives. China’s social credit point system is still in the pilot stage, but it has already spurred discussion – especially in the West. What’s behind it? A report from Beijing.

Yet another city is starting to keep track of digital social points. Since early March of this year, a social credit point system has been up and running in Wuxi, a metropolis of 6 million people in Shanghai’s hinterlands. City officials say it uses Big Data analyses and cloud technologies to calculate social points for the city’s citizens based on no less than 493 criteria – including behavior in traffic, morality, the repayment of loans and commitment to charitable work. As a warm-up, Wuxi plans to launch pilot projects to “promote credibility.” The flowery language is one way to encourage good behavior in tourist hotspots and even in sanitary facilities, among other places.

THOSE WHO ARE WORTHY OF TRUST BENEFIT WHEREVER THEY GO, WHILE IT IS DIFFICULT FOR THE DISCREDITED TO TAKE A SINGLE STEP.

The program is one of dozens of local social credit pilot projects in China. They are the vanguard of a nationwide system that Beijing envisions, though its future characteristics are still up in the air. But one thing is clear, the system will take advantage of the new opportunities offered by digitalization. Networked monitoring cameras will record faces, according to this vision, and algorithms will assign them to individuals. Experts expect Big Data analytics to analyze events. Wuxi is a modern city in the booming Yangtze River Delta – and one of the pilot cities for China’s Smart Cities initiative and for autonomous driving. Wuxi has installed a network infrastructure governing about 200 traffic lights since 2017. The city started out with the tests of car-to-car and car-to-trafficsignal networking. They are based on the LTE mobile wireless standard, which does not quite enable the real-time transmission of data at this point, but it comes quite close. This infrastructure is now expected to help gather personal data on driving behavior for the city’s social point system.

Social Points: Foreign critics fear universal surveillance. China sees it as an incentive for proper behavior.

To foreign critics, this may seem like the first step toward an all-encompassing monitoring system. In China, however, it is presented as an inducement to upstanding behavior. The key term is “xinyong,” or trust. This virtue has often been lost in Chinese society. After scandals over baby formula adulterated with melamine, the contamination of stored blood and vaccines, and excessive pesticide use in agriculture, growing numbers of Chinese mistrust medicine and doubt the safety of their foods. And they mistrust other people. So it’s no surprise that the Chinese are reacting positively to the new social credit system. According to the first official draft by the State Council in 2014, a nationwide point system of social credits is supposed to emerge. “Those who are worthy of trust benefit wherever they go, while it is difficult for the discredited to take a single step,” it said, summing up the concept. The term social credit represents a series of plans that the government wants to use to promote integrity, trustworthiness and security in its citizens’ economic lives. “This is more of a political concept and an ideology relating to the use of data than a single project or system,” said Jeremy Daum of the Yale Law School, who has translated a series of Chinese legal texts on social credit into English. The system can also show its teeth, which is evident from a nationwide blacklist of people subjected to enforcement actions, such as fines, in court verdicts. By coordinating various agencies, delinquent citizens are prevented from buying tickets for flights or first-class travel on high-speed trains. The highest court in Beijing, China’s capital, has ensured that local authorities such as the tourism agency or the Bureau of Civil Affairs integrate the data on those individuals into their systems, according to Kou Fang, the court’s Interim Chairman. “This facilitates automatic comparisons, interception and ultimately penalties,” Kou said. The approach also blocks the monthly participation of these persons in the Beijing lottery for a coveted car license plate. In all of China, more than 18 million people were prevented from buying airline tickets since the introduction of the blacklist, and another 5.5 million were unable to buy train tickets, according to official figures. In addition, passengers can be penalized for misbehavior on trains or in airplanes. Since the Chinese present identification when they buy train tickets for designated seating, a disruptive traveler can be identified in videos from the monitoring cameras in the railway cars. A more distant goal is digital face recognition, which is being tested at street crossings in scattered locations.

There are pluses for donating blood, volunteering or reporting counterfeit products to authorities.

The current plan to build the system runs until 2020. In Daum’s view, it will be followed by another plan with new goals. It is not envisioned that the system will be extensively used by then, as some media reports have said. But the pilot projects are an indication of where the efforts may be headed.

Easier Credit

The eastern Chinese city of Rongchang assigns its citizens to categories ranging between AAA and D. Each starts out with 1,000 points, which can increase or decrease in 200 different ways. There are pluses for donating blood, volunteering, reporting counterfeit products to authorities, or brokering investments in the city. There are minuses for tax evasion, traffic offenses or violations of the country’s family-planning policies. AAA citizens receive free health physicals, 30 cubic meters of free tap water or heating bill abatements. On the Yangtse, the metropolis of Nanjing uses Big Data and credit information to create a so-called credit image of all its companies. “The tax agency gave my company an ‘A,’ enabling us to quickly get a 2-million yuan (263,000 euros; 296,284 US dollars) loan from the local bank,” the firm’s founder, Wu Jianhui, told a local newspaper. Wu needs the money to relocate his company.

Business life is one key area where China would like to reestablish trust. This extends to credit reports, which are very much like their counterparts in the West. But In 2017, they only covered about 300 million people, or less than one quarter of the population, in the central bank’s system. The credit point systems are designed to solve some of the problems. For example, at many banks, young people are almost automatically denied loans. The situation is similar for many small and mediumsized private companies: They have a hard time getting loans from government-owned banks. Due to the lack of credit reports, appeals to the government for more loans to private companies come into direct conflict with efforts to reduce risks in the financial system.

Meanwhile, according to the National Public Credit Information Centre, some credit databases have created a blacklist containing nearly 3.6 million companies that are not making payments on outstanding loans, that are involved in consumer scandals, or have run misleading ads. The upshot: they are not allowed to take part in government bids and land auctions or issue bonds. There are, in fact, private companies that operate parallel digital point systems, but they resemble evaluation models like those from online department stores or bonus programs. The best-known and largest is the “Sesame Credit” system established by the Internet firm Alibaba, which operates online department stores such as Tmall and the payment service Alipay. It is unclear whether these private systems will someday be networked with future governmental social credit systems – or whether the information is already flowing to the government. Most Chinese, however, have insisted on relatively low levels of data privacy so far and welcome the incentives for greater decency in business and on the road.


This article originally appeared in ESSENTIAL, Freudenberg Sealing Technologies’ corporate magazine that covers, trends, industries and new ideas. To read more stories like this, click here .

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