China's AI-Powered Social Credit System?

What is a credit system in western countries?

A credit bureau is a data collection agency that gathers account information from various creditors and provides that information to a consumer reporting agency in some countries, including US, UK, Australia, India, Philippines, and also to private lenders. - From Wikipedia.

Credit bureau is an agency and it's different from credit rating system where a financial credit score rating your financial trustworthiness. 

A credit rating is an assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. - From Investopedia. 

However, with a massive helping hand from high-tech and big data, China is rolling out a social credit scoring system that rates your trustworthiness far beyond that of your financial credit score. 

What China's social credit system looks like?

1. How are the China's social scores determined?

In China, government agencies and private companies are collecting enormous amounts of data about e.g. an individual’s finances, social media activities, credit history, health records, online purchases, tax payments, legal matters, and people you associate with in, addition to images gathered from China’s 200 million surveillance cameras and facial recognition software. 

China began to create this system in 2010 as a pilot program but officially began implementing the construction of a nationwide social credit system in 2014. 

2. How are the social credit scores used?

The idea is to create more transparency about companies and individuals that are breaking the law or are non-compliant with official obligations and incentivize the right behaviors with the overall goal of improving governance and market order.

On the one side, it encourages and rewards the good behaviors.  Generally, higher credit scores give people a variety of advantages. Individuals are often given perks such as discounted energy bills and access or better visibility on dating websites. On wellness benefits side, higher scores help get possibly better hospitality and public transportation services. 

On the other hand, it punishes the lower scores citizen. It might prohibit buying luxury goods or booking hotels, airlines or trains. Lower scores can also harm for availability in dating website or schools of children. Once in the blacklist, it can also restrict them from going aboard. 

3. What are the influences of the social credit scores?

Currently, around 80% of Chinese citizens stay positive about the new systems as it promotes the good behavior as well as prevents them from fraud or bad business. Chinese citizens have always known the government knows a lot about them, so digitizing this isn't as jarring as it would be for Americans and Europeans. For many that live outside of China, it feels more like one of the creepy 'Nosedive' episode of the British science fiction TV series Black Mirror.

It was also influence beyond China. As business outside China still needs to obey the social credit scores, which impacts their foreign partners or customers as well on how they behave and react, according to recent surveys. 








Source: Wikipedia, Forbes etc.