Does China Have a Social Credit System? Part II

Wikimedia Commons: Plan of the Jeremy Bentham's panopticon prison

Part I of this two-part essay covered the background to the Chinese Social Credit System (SCS) with emphasis on Chinese government policy statements and documents. I also looked at a compelling Stanford University study evidencing an SCS with a scoring system.

In Part II, I’ll take a look at: evidence of SCS activity relating to policing online ‘disinformation’; a scholarly study of China’s Corporate Social Credit System, and; how the suppression of Xinjiang’s Uyghurs accelerated the Chinese surveillance state. Before concluding, I’ll weigh up extreme claims and counter claims as part of a difficult process to try to understand what is true about the SCS.

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Evidence of SCS activity relating to policing online ‘disinformation’

Josh Chin and Liza Lin claim in their book “Surveillance State: Inside China’s Quest to Launch a New Era of Social Control” that the Chinese Cyberspace Administration started a social credit system blacklist for people who posted information online that violated “social morality, business ethics, honesty, and integrity”^[i]. However, they did not cite their source, so I went in search of some.

Matthew Walsh, a journalist reporting for Caixin Global (and now an editor at Agence France-Press Hong Kong), confirmed this draft regulation in a post on 29 July 2019 saying “the Cyberspace Administration of China proposes restricting the internet access of users and providers of online information services that ‘fabricate, publish, or spread information that violates public morality, business ethics, or good faith’ ”.

The website Asiallians also claimed that the Cyberspace Administration of China issued a draft regulation “on 22th July 2019, which aims to blacklist individuals and legal entities for their serious online dishonesty (e.g. fabricating and spreading information online in violation of social morality or business ethics, etc.)”

China Law Translate^[ii] offers a translation of the regulation titled “Provisions on the Governance of the Online Information Content Ecosystem” The actual wording of the regulation is more horrifying than the sources I have quoted above. Article 5 of the regulation sets out seven points governing the content that “online information content producers are encouraged to produce, reproduce, and publish”. The first type of content which is encouraged is:

“Content publicizing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; and complete, correct, and vivid exposition of the path, theory, system, and culture of Socialism with Chinese Characteristics.”

Article 6 deals specifically with banned content, and begins: “Online information content producers must not produce, reproduce, or publish illegal information that contains the following content:…”. There are eleven prohibitions. Here are some:

“(3) Content harming the nation’s honor and interests;

(4) Content distorting, vilifying, defiling, or denying the deeds and spirit of heroes and martyrs…

(8) Dissemination of rumors, disrupting economic or social order;…”

Article 7 instructs online content producers to “employ measures to prevent and resist the production, reproduction, or publication” of content such as: “Sensationalizing gossip, scandals, misdeeds”, and even “Content that has sexual innuendo, is sexually suggestive, or is readily associated with sex”.

This regulation came into effect on 1 March 2020.

Corporate Social Credit Systems (CSCS)

A June 2023 study by researchers at Stanford Law School and City University of Hong Kong is titled “China’s Corporate Social Credit System: The Dawn of Surveillance State Capitalism?”^[iii]. Putting aside the fact that surveillance capitalism has been dawning in both China and the West well before 2023, the authors claim to provide “the first empirical analysis of CSCS scores in Zhejiang province, as the Zhejiang provincial government is to date the only local government to publish the scores of locally registered firms.”

The authors found that:

“while the CSCS is ostensibly a means of measuring legal compliance, politically connected firms receive higher scores. This result is driven by a “social responsibility” category in the scoring system that valorizes awards from the government and contributions to causes sanctioned by the Chinese Communist Party.” [emphasis added]

The scoring system results in redlisting, which confers a variety of benefits, and blacklisting, which “triggers market barriers such as restrictions on obtaining government approvals, greater frequency of inspections, and prohibitions on obtaining credit or issuing stock.” The legal representatives of the entity, as well as the individuals responsible for the infractions, are also subject to blacklisting.

Apologists for the Chinese SCS, and its companion CSCS, may argue that it is intended to fill enforcement gaps in the Chinese legal system and address shortcomings in regulatory capacity. While the studies show that this represents most of the SCS activity, they also provide evidence that it has gone beyond that. Even where the SCS addresses enforcement gaps in the existing legal system, the punishment meted out under it can be disproportionate and arbitrary. But that is also its intention since it fulfils the stated policy of the Joint Punishment system outlined in the CCP’s Planning Outline document: “if trust is broken in one place, restrictions are imposed everywhere”. (Refer Part I.)

The authors of the book Surveillance State: Inside China’s Quest to Launch a New Era of Social Control cite the example of a local travel agent who was in dispute with his landlord over subletting^[iv]. The agent sublet his space to a noodle-maker who defaulted on payments. The agent settled all outstanding amounts, but the matter of evicting the noodle-maker remained unresolved. Rather than ask the courts to settle that aspect of the dispute, the landlord simply applied to have the agent put on a blacklist, claiming that it was the agent’s responsibility to evict the noodle-maker, and not the landlord’s. The agent, who runs a tour business, absurdly found himself banned from buying high-speed train tickets and plane tickets, and wasn’t allowed to accompany one of his tour groups on a boat cruise.

A statistical analysis of entity scores across the Zhejiang CSCS revealed that the variability in scores across all categories was greatest in the Social Responsibility category, which operates differently from the other categories. In all the other categories, points are deducted for bad behaviour from a starting base score. However, in the Social Responsibility category, the base score is zero, and points are added for good behaviour. Points must thus be proactively earned in this category.

The mean scores for a range of first-level indicators on all other categories were above 96%, whereas the corresponding mean score for Social Responsibility was 38.25%. The high scores and absence of variability in the distribution across all other categories suggests that it is relatively easy to avoid censure in those categories. However, earning Social Responsibility points entails engaging in Party-sanctioned activities and making donations to organisations recognised by the Party. Because of the low mean score in this area, this activity represents an area which researchers called “the largest future payoff to effort”. In other words, those organisations that struggle to meet the acceptable bar through avoidance of bad behaviour are incentivised to make up for it through demonstrated fealty to the CCP.

The CSCS thus introduces Party loyalty as an incentive in market regulation.

The study authors also examined whether political connections could play a role in CSCS scores. Measuring political connections was assessed on “whether any director or chief executive officer (CEO) of a firm is connected with the government or CCP, such that the individual may be able to exert political influence.”

Data was obtained on the government or Party-related positions held by each director and CEO. A director was coded as politically connected if “he or she has served in certain government or Party positions at or above the division level.” The authors found that: “consistent with findings in other areas of the Chinese economy, political connections matter in the CSCS: Political Connections is significantly associated with higher scores”.

The authors concluded that:

“the CSCS, as a data-driven system of evaluation, rewards and punishments for every company in the country, is not simply a credit rating system or law enforcement mechanism, as it has generally been portrayed. Rather, the CSCS is a policy channelling tool of potentially far-reaching significance. As CCP policy priorities change over time, the CSCS scoring system can be readily adjusted by local governments to incentivize and reward policy compliance and political conformity. Consider, for example, the potential of the “social responsibility” category to shape corporate behaviour going forward.” [emphasis added]

How the suppression of Xinjiang’s Uyghurs accelerated the Chinese surveillance state

Though it covers 16% of China’s landmass, the north-west region of Xinjiang is relatively sparsely populated, accounting for roughly 26 million people out of the total Chinese population of 1.4 billion. Officially known as the Uyghur Autonomous Region of Xinjiang, it is now anything but autonomous.

Historically dominated by the Uyghurs, a Turkic Muslim group, it was conquered in 1759 by the Qing Dynasty and formally integrated as a Province in 1884 when Chinese state administration began. Ethnic tensions between Han Chinese and Uyghurs entered a new phase with the establishment in 1949 of the People’s Republic of China, which “went further than any dynasty in imposing its will on the region.”^[v] Since then, state-sponsored mass Han migration and Uyghur separatist ambitions have continually collided, often violently, culminating in a 21^st century government policy of deploying mass surveillance and internment camps to suppress Uyghur identity. Surging religious and ethnic resistance in Xinjiang posed a threat to the Party’s highly cherished Belt and Road Initiative to build a corridor for Chinese goods through Central Asia to the Middle East and Europe.

Reminiscent of an apartheid-style pass system, beginning in 2014, Uyghurs were forced to carry internal passports to restrict their movement while Han Chinese were able to move about freely.^[vi] After an eruption of violence in 2014, Xi Jinping ordered local officials to “show absolutely no mercy” in dealing with separatists^[vii]. He then ordered a new “People’s War” on terrorism, adding that: “The weapons of the people’s democratic dictatorship must be wielded without any hesitation or wavering”.^[viii] A new counter-terrorism law broadened the definition of terrorist activity to include “thought, speech or behaviour”.^[ix]

A step change in the crackdown took place in August 2016 with the appointment of Chen Quanguo to the top Party post in Xinjiang. Chen had just come from the same post in Tibet, where he had been successful in bringing Tibetans under control. One innovation that Chen had pioneered in Tibet, and which was immediately transferred to Xinjiang, entailed the construction of 7,700 “convenience” police stations in two years as part of a “grid-style management” technique that divides communities into small zones for more efficient monitoring. “Each police station was connected to a network of surveillance cameras and … alarm buttons installed in nearby businesses that owners could push to alert authorities of suspicious behaviour.”^[x]

By 2019, Human Rights Watch (HRW) had reported that one million or more Turkic Muslims (out of a total estimated Uyghur population of 11.5 million) had been detained in indoctrination camps for ‘re-education’ or brainwashing. HRW was comfortable in expressing this knowledge as “generally known”, in part because of the leaked “Xinjiang papers” which laid bare the policies and practices dictated at the highest levels of the Party, and which were corroborated by Xinjiang-focused scholars and international media. The policies and practices relate to “mass detentions, mosque demolitions, coercive birth controls, forced labour, ‘population optimisation’ as euphemism for dispersal of Uyghurs, and ‘Sinicisation of religion’ ”^[xi].

HRW describes the use of digital technology in its surveillance effort in Xinjiang^[xii]:

“Beijing then uses the latest technology to collect and analyze information gathered about Muslims there. Some Xinjiang checkpoints are equipped with special machines called “data doors” that—unbeknown to the people passing through them—vacuum up identifying information from their mobile phones and other electronic devices. Machine-readable QR codes are engraved on knives and posted on people’s front doors (and officials are equipped with mobile apps to scan them), allowing the authorities to quickly link individuals to their homes and possessions. To track, monitor, and profile Turkic Muslims, agents also rely on artificial intelligence, including facial and number-plate recognition, which have been connected with surveillance cameras that blanket both the region and other parts of the country. In addition, the authorities collect biometric data—including voice samples, iris scans, and DNA—and store them in searchable databases.”

This is in addition to dispatching “one million government employees … to stay as ‘guests’ in the homes of Turkic Muslims in Xinjiang, with instructions to report any sign of religiosity or unusual thinking.”

HRW also reported in 2019 that:

“The use of mass surveillance is not limited to Xinjiang. The Chinese police are researching and putting similar mass surveillance systems in operation throughout the country. For example, Human Rights Watch has documented the use of a big-data policing platform called Police Cloud, which collects and integrates people’s personal data—from their supermarket memberships to their health records.”

The SCS system requires the hoovering up of massive amounts of data on individuals in order to generate inputs. The beast is fed by data and the operating system that processes that data is AI. Both China and the West are tearing down the walls on data privacy to feed their respective surveillance beasts, but the CCP has far fewer, if any, legal hurdles in its way.

Having examined the sophisticated surveillance system powering the CCP’s crackdown in Xinjiang, HRW concluded that the “Chinese government is perfecting a system of social control that is both all-encompassing and highly individualized, using a mix of mechanisms to impose varying levels of supervision and constraint on people depending on their perceived threat to the state.”

The most up-to-date position on the SCS – dealing with claims and counter claims

The hardest part of this investigation lies in discerning how much is true, and how much is not.

At the extreme end of the SCS denial spectrum is this post by China Law Translate. According to that post “the mythos of the citizen scoring panopticon has been largely dispelled and lingers mainly as a social media trope.” The use of the word “mythos”, as opposed to just “myth”, is presumably intended to signify that a Chinese citizens’ SCS is in the league of Greek legends such as Orpheus and Eurydice. Of course Orpheus didn’t actually venture into the Underworld to rescue Eurydice who had died from a snakebite. That’s mythos! And of course the Stanford study referenced in Part I is just as phantasmagorical, right?

Well, I think it’s highly unlikely that the Stanford study is made-up mythos. China Law Translate then goes on to argue that “businesses, not individuals, have always been the main focus of social credit.” That’s probably true, but using that to dismiss the fact that the remit was widened is disingenuous. The question is: to what extent was the remit widened?

Something closer to the truth can be gleaned from this update posted by MS Advisory, which is a consultancy services firm geared to “provide a full range of financial services to foreign enterprises active in China and Hong Kong.” A big part of their job involves helping clients to understand the Chinese regulatory framework. The post is titled “China’s Social Credit System in 2026: Dispelling Common Myths” and, despite promising to dispel myths (or mythos if you’re acutely peeved by it all), I was comforted by its confirmation of pretty much everything I have explained thus far by reference to scholarly studies. In its key takeaways block, there are two points that help to give a balanced perspective:

• “While there is currently no unified score for individuals, there are currently various social credit measures in place that vary by location and industry.”

• “In 2026, policy work continues on the social credit system, with implementation more focused on the corporate social credit score than the personal score.”

But the opening paragraph of its update does not contradict anything I found. Here it is:

“China’s Social Credit System represents a significant undertaking by the Chinese government to assess the trustworthiness and compliance of its citizens and businesses. Designed to govern social behavior through a comprehensive reward and punishment scheme, the system amalgamates various pieces of a person’s financial, social, and legal information into a single numerical score. This score is then used to impose real-world consequences, ranging from priority services and opportunities for those with high scores to travel restrictions and slower internet services for those with lower scores.” [emphasis added]

Providing more balanced perspective, the post states:

“While the Social Credit System is expected to be fully operational nationwide eventually, some misconceptions persist about its scope and implementation. It is not a monolithic, country-wide system but rather a patchwork of regional pilot projects with varying degrees of enforcement (See Source).”

Its source link goes back to a translation of the CCP’s “Planning Outline for the Construction of a Social Credit System (2014-2020)”, published on a Stanford University site and authored by Rogier Creemers whose study I discussed in Part I.

Not monolithic, not country-wide, but a patchwork of regional pilot projects. I think that’s probably closer to the truth. It may well be true to say that most people in China have not had direct experience with an SCS in a personal capacity. Most Chinese citizens might therefore, in good faith, deny its existence. That would not mean that it does not exist in some shape or form, and that it is not an ongoing work in progress. Nor does the fact that it is a work in progress mean that it’s destined to become monolithic. We simply can’t know at this point.

And given that China monitors its citizens both at home and abroad, and that its Cybersecurity laws prohibit the dissemination of “rumors, disrupting economic or social order”, and of online content that “harm[s] the nation’s honor and interests”, Chinese citizens who might have had an experience with an SCS are not going to be volunteering in any large numbers to discuss it.

Conclusion

In concluding, let me first deal with the inevitable accusation of bias, both on my part, and potentially on the part of the study authors. For my part, I am certainly biased, and here’s why I am comfortable with my bias. I abhor any system that purports to impose morality and virtue through reward and punishment. I don’t even have to think about whether my moral value system might align with that of an imposing authority. It can’t. Morality is a heart and spiritual condition that cannot be legislated. We can only legislate against the concrete consequences of immorality, such as physical assaults, theft, breach of contract, and so on. Any attempt to legislate or impose morality is thuggish, and ultimately has nothing to do with a sincere attempt to improve morality. It is about power and control.

So, I am at loggerheads with any authority using coercion to impose its values, good or bad. For a moral compass to be truly authentic, it cannot be externally imposed. Gamification perverts whatever innate morality may have existed, and simply reinforces the absence of an internal moral compass. The measure of a society’s morality is how truly free its members are: to what extent are Natural Law dictates in that society obeyed without the need for external enforcement?

What of the potential bias of the study authors I selected? Do they have an axe to grind? Possibly. You can certainly find studies that laud the Chinese SCS for its potential to deliver some alleged social good. Those studies are biased because they assume that the loss of some degree of individual rights such as privacy is an acceptable trade-off to obtain a proclaimed greater societal good.

However, in the final analysis, my bias, or anyone else’s, is irrelevant because the question that remains for readers is whether these studies (and my presentation of them) provide compelling evidence of the existence of an SCS in China that has the potential to morph into an Orwellian nightmare. And a related question is whether I have omitted facts which, if admitted, would change the conclusion I am about to draw.

The second issue that must be dealt with is the reliability of the studies. At the extreme end of the unreliability scale lies the possibility that the studies were commissioned for propaganda purposes, and that the academics involved produced data and findings out of thin air. This is not impossible, but given the quality of the evidence presented by the academics I referenced, I find it implausible. And again, if the studies and findings are plausible, the question that remains is a simple one: have they proved that China is developing a social control system that has serious implications for individual liberty and basic human rights such as privacy and free speech?

I have concluded that the denial of an emerging Social Credit System in China – one that does seriously threaten basic human rights – flies in the face of both policy statements by the CCP as well as independent researchers who have conducted in-depth studies into various SCS projects in China. Proof that China-maxxers are on the back foot in this whole debate lies in their acknowledgement of the SCS’s existence, hastily followed by downplaying the ethical significance of the state’s attempts to socially engineer the individual’s behaviour to align with political imperatives. If you claim to be in favour of individual sovereignty, the mere existence of an SCS is problematic. The starting point has to be an attitude of cynicism, not acceptance.

Contrary to exaggerated reports in some Western media, researchers acknowledge that it is not yet a single unified system. It is still a work-in-progress, with fragmented initiatives managed by both local government and the commercial sector^[xiii]. It’s far more complex than anti-‘Communist’ propagandists would like it to be, but China-maxxers capitalise on this messiness by emphasising the financial credit aspects of the SCS, while ignoring the encroachment into social engineering proven by actual pilot schemes that scored and punished behaviour outside the criminal legal code. They also skirt around the intent and wording of both CCP policy statements and legislation. To repeat: if you value freedom, it’s your responsibility to shine a light on those threats, not to pretend they don’t exist.

But the most important point I want to make is that, in the final analysis, the whole debate about China’s Social Credit System and whether it is coming to the West is a smokescreen for what is really going on in both China and the West. China does have an SCS, but it’s not yet the total Beast System that some exaggerated accounts make it out to be. And the West might end up adopting something similar, or it might not. The point is that an SCS in the formal sense is not needed for the digital control matrix to succeed. And both East and West are building a Digital Control Matrix (DCM).

With the way the DCM is being built in both the West and in China, total control of each individual is being achieved through the collection of oceans of data on each individual, and by breaking down information silos that prevent information sharing. Centralising personal information storage, or making huge amounts of it accessible to a single authority on a single platform is in effect Digital ID. And linking that Digital ID to programmable digital money will provide an effective SCS without having to call it a “Social Credit System”. The entire world is hurtling in this direction at breakneck speed.

China has virtually no legal restrictions when it comes to collecting its citizens’ data and centralising its storage. The West’s technocratic class has proved remarkably adept at gaming legislation, crafting new laws, or simply ignoring existing ones, to achieve the same goal. Here’s a quick rundown of examples:

• Canada’s Bill C-8 on cyber security opens the door to warrantless access to individual subscriber data, location, browsing history, metadata, and more. A minister of state is able to secretly order the termination of an individual’s internet or phone with no court review. It provides for secret gag orders preventing companies from disclosing why service was cut. And it gives broad powers that could force weakening of encryption.

• Technocracy cannot work without Digital ID. Sam Altman’s company, Tools for Humanity, is manufacturing a biometric iris scanning machine which purports to issue a “proof of personhood.” Playing to the DEI gallery, it states its goal is a “globally-inclusive identity and financial network”. The term “globally-inclusive” is in fact a statement of its intended scope – no human is to be left out of the Digital ID net.

• Mark Andreessen, a Big Tech financier, has bankrolled a US super PAC whose purpose is to elect politicians who will pre-empt and dismantle state-level AI regulation. (Super PACs are U.S. political action committees that can raise and spend unlimited sums of money from corporations, unions, associations, and individuals to overtly advocate for or against political candidates.)

• Palantir, the privately owned arm of the CIA’s state surveillance apparatus, is contracting to work with U.S. government agencies to eliminate “information silos”, thus enabling expanded data sharing across government. Removing data firewalls by essentially combining data points into one place effectively creates a Digital ID. Palantir is doing the same work in Britain’s NHS.

The Digital ID sword hovering over the heads of all nations is the UN’s SDG16.9 policy agenda to “provide legal identity for all.” This is thinly veiled code for Digital ID for all humanity, and that’s been confirmed by the ID2020 alliance, which was tasked by the UN to implement SDG16.9. The ID2020 alliance reframed the goal more transparently as “enabling access to digital identity for every person on the planet.” [emphasis added]

As Iain Davis reminds us:

“Governments did not set the policy. The government’s only job is to convert the oligarch’s agenda into binding regulations and law.”

So, while a core aim of this article has been to demonstrate that China does have a Social Credit System that is not benign, the more important point is this: the objectives of that SCS and, crucially, the digital technology to achieve it, are part of a global initiative instigated by the global Public-Private Partnership controlled by the global plutocratic ruling class. The aim is to bind humanity in ever-tighter chains. China is deeply embedded in that architecture, just like every major Western power.

East and West are firmly committed to the use of data technologies to achieve historically unprecedented levels of social control. These technologies, if not resisted, will ultimately have the same depressing effect on humanity everywhere. Narratives to lubricate their rollout will vary according to cultural sensitivities, but it’s the same endgame everywhere. China’s cultural attitudes may support the state’s use of “Social Credit” to soften the blow. In the West, surveillance grid narratives run the gamut of convenience, efficiency, productivity, preventing harm to children and any other vulnerable group that springs to mind, fighting crime, and immigration control.

Population control, whether in China or the West, is a core function of government, and managing the vested interests of their plutocratic overlords is what senior state apparatchiks are paid to do. The war for technocracy is a global ruling class war on humanity. Picking one side in the multipolar fraud that is being constructed is as daft as voting in national politics for the red/blue/any-other-colour team in the hope that party politics will vanquish the corruption of party politics. China-maxxers are doing humanity a grave disservice when they excuse or propagandise China’s efforts to build a comprehensive surveillance grid, of which the SCS is an integral part.

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^[i] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 225.

^[ii] https://www.chinalawtranslate.com/en/provisions-on-the-governance-of-the-online-information-content-ecosystem/

^[iii] Lin LY-H, Milhaupt CJ (2023). China’s Corporate Social Credit System: The Dawn of Surveillance State Capitalism? The China Quarterly 256, 835–853. https://doi.org/10.1017/S030574102300067X

^[iv] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 223/5.

^[v] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 19.

^[vi] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 20.

^[vii] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 44.

^[viii] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 45.

^[ix] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 46.

^[x] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, 2022, St Martin’s Press, USA, Pg. 49.

^[xi] Dr David Tobin, The “Xinjiang Papers”: How Xi Jinping commands policy in the People’s Republic of China, https://sheffield.ac.uk/las/research/east-asia/xinjiang-papers-how-xi-jinping-commands-policy-peoples-republic-china

^[xii] https://www.hrw.org/news/2019/08/16/data-leviathan-chinas-burgeoning-surveillance-state

^[xiii] Genia Kostka, Freie Universität Berlin, China’s social credit systems and public opinion: Explaining high levels of approval, 2019, https://journals.sagepub.com/doi/10.1177/1461444819826402