China’s Social Credit System: A Mark of Progress or a Threat to Privacy?

No government has a more ambitious and far-reaching plan to harness the power of data to change the way it governs than the Chinese government. Its Social Credit System (SCS), laid out in a plan released in 2014 and still under construction, aims to extend financial credit scoring systems—commonly used by financial institutions in the United States—to other areas of government regulation, from contract enforcement to food safety, corruption, and environmental protection. The plan is to link public and private data on financial and social behavior across China, use the data to evaluate behavior of individuals and organizations, and punish or reward them according to certain agreed upon standards of appropriate conduct. While many of the SCS goals are laudable, the scale and potential impact pose serious risks to individuals and organizations that could result in the opposite of the promised effects. There is still time to shape the SCS to become an effective tool to deal with some of China’s most intractable domestic problems and at the same time minimize the odds of it becoming an Orwellian system of social control.