China wants to get in on the credit racket. At the moment, most Chinese citizens don't have credit scores, unlike in the United States, where they have been part of the consumer landscape for decades, led by the big three credit bureaus, Equifax, Experian, and TransUnion. The Chinese government aims to fix that and fast, establishing a nationwide credit scoring system, known as the Social Credit System (SCS), by 2020. 

As with China's vast construction projects, this scoring system is fiercely ambitious, authoritarian, technologically sophisticated, and likely to disrupt the lives of millions of people. And although it is a deeply capitalist undertaking, the SCS is being positioned as a socialist effort. A 2014 planning document states that “a social credit system is an important component part of the Socialist market economy system” and that “its inherent requirements are establishing the idea of an sincerity culture, and carrying forward sincerity and traditional virtues.” That vague phrasing actually speaks to the scope of the project. With "social credit," the Chinese authorities plan to do more than gauge people's finances; they want to rate the trustworthiness of citizens in all facets of life, from business deals to social behavior. Eventually, all Chinese citizens will be required to be part of the SCS. 

As of now, the Chinese government is allowing select companies to roll out test projects designed to rate individuals' trustworthiness. These include efforts by Baidu and Alibaba, respectively the country's largest search engine and e-commerce site. The involvement of these tech companies is key. Credit scoring in the U.S. has long graduated beyond simple matters of credit card debt or bankruptcy history. The credit bureaus now double as some of the country's biggest data brokers, and they consider a range of consumer activity when creating their proprietary scores. The scores themselves have grown in value, now being used for anything from rating credit worthiness to evaluating one's fitness for a job (some states, including New York, have banned the use of credit scores in job screenings). As a consequence many forms of consumer scoring now lie outside existing consumer protections, as a World Privacy Forum report found last year.

China's Social Credit System promises to build on these techniques, using the vast behavioral records of its people to rate them—as consumers, as citizens, as human beings. According to that same planning document, the SCS will be used “to encourage keeping trust and punish breaking trust,” which includes violations of the “social order.” In other words, everything Chinese citizens do, especially online, may be incorporated into their scores. Doctors, teachers, construction firms, scientists, and tourism employees will be scored. So will sports figures, NGOs, companies, members of the judicial system, and government administrators.

Approved behaviors and purchases will raise a score; other activities may lower it, perhaps drawing the unwanted attention of authorities in the process. Scores in turn will be used for employment, disbursing credit, and determining eligibility for social benefits. While the Chinese government has frequently touted its desire to create “a culture of sincerity” and “trust,” the plan uses surveillance, data collection, online monitoring, and behavioral tracking to render practically all of its citizens' affairs in market terms. Rather than being equal, China's citizens will be in fierce competition with one another, jostling for rankings better than their peers.

Companies have already begun introducing incentives for consumers to publicly share how they rate. (A government website allows people to look up the scores of others.) High scorers can get better rental cars or book hotel reservations without leaving a deposit. Sesame Credit, a scoring program run by Alibaba, the e-commerce giant, has integrated its scores into Baihe, a major dating site. Baihe users can choose to display their scores in return for more prominent placement in search results. Speaking to the BBC, a Baihe executive justified the move by explaining that a person should have a sense of the financial status of a potential partner. Of course, the score itself—which ranges from 350 to 950—is the product of an opaque system whose details are only known to Sesame Credit and its government overseers.

While it drapes itself in economic language, the Chinese scoring system is less about market relations than about control and risk mitigation. A Sesame executive has already said that certain behaviors, like playing video games all day, will bring penalties. Political and criminal activity (in China they can be one and the same) will also be folded into the SCS, “painting a complete picture of its citizens in data,” according to New Scientist. This nationwide system could then be used to steer citizens toward desired behaviors and to ensure, in the parlance of the communist party leadership, a more “harmonious society.” That this “mega-system” ensures the financialization of everyday life, tying every choice and behavior to one's economic and social standing, is just another irony of China's brand of state-led corporatism. It turns out that communists do make the best capitalists.


If it's not apparent, many potential features of the SCS already exist here in the United States. They are simply more entrenched or altogether invisible to consumers, who have learned not to question the ubiquity of credit scoring, which itself has become simply one form of assessment that should now be classified under the broader mantle of consumer scoring. Public reviewing and rating have also become indelible parts of American culture, from liking social media posts to rating Uber drivers to assessing employers on Glassdoor. The recent controversy over Peeple, a “Yelp for people” app, obscured the fact that consumer scoring is endemic here—it's just distributed between a range of competing services and often shrouded in corporate secrecy. Peeple promised to reduce this kind of assessment to one facile, publicly accessible number. And they weren't the first. Other visionaries have tried, and failed, to promote what's been called a “rateocracy,” a mass system of public reputation assessment from which no one can opt out.

Like hundreds of millions of Chinese, many Americans aren't part of the conventional banking system. Consequently, a number of finance startups now offer the equivalent of payday, subprime, and other loans to the so-called underbanked by plugging into their social media accounts and other data streams. The guiding notion is that credit worthiness can now be determined by analyzing social graphs and online behavior. Almost anything might be incorporated into the risk model: some creditors, for instance, take into account how adept borrowers are at filling out online forms. As the CEO of one such startup told the New York Times, “We feel like all data is credit data, we just don't know how to use it yet.”

It seems that Chinese technocrats and American techno-capitalists have a lot in common. Both have taken an instrumentalist approach to surveillance. All this personal data is being generated anyway, they seem to say; it'd be a shame not to put toward a more socially beneficial use. A major problem with this mode of thinking, as Frank Pasquale has written, is that “authority is increasingly expressed algorithmically. Decisions that used to be based on human reflection”—whether to hire someone, whether someone might be trusted with a loan, whether certain behaviors should be subject to the marketplace at all—“are now made automatically.”

Meanwhile, consumers are encouraged to buy into a system whose methods remain inscrutable and whose effects tend to be punitive. As the authors of the World Privacy Forum report explained, “the existence of the score itself, its uses, the underlying factors, data sources, or even the score range may be hidden.” The score may be wrong or unrepresentative, but there's little way to challenge it.

This kind of scoring is meant to establish market-based mechanisms to ensure trust, but why should we trust those who evaluate us? My skepticism was confirmed a few days ago, when I received a letter from Experian, one of the three major credit bureaus. The letter explained, in typical lawyer-vetted PR-speak, that “an unauthorized party accessed certain Experian servers” and downloaded information about T-Mobile customers. (T-Mobile had apparently contracted Experian to conduct credit checks on its customers, of which I am one.)

This is far from the first scandal for Experian, which has been caught out selling consumer data to identity thieves. I had expected a letter like this one ever since I saw a news report that 15 million T-Mobile customer records were stolen in a data breach. Naturally, the letter from Experian offered no sense of the scale of the theft. It did mention that my information “likely was acquired” and that it included my “name, address, social security number, date of birth,” and driver's license number—everything you need to simulate me as a consumer or loan applicant. As restitution, the company offered a two-year membership in ProtectMyID, a credit monitoring and identity theft service owned by Experian (a relationship that the letter didn't disclose). There was no offer of financial compensation or to delete my sensitive personal data.

As a freelance journalist, I'm broke, not poor—I've learned the difference—and see little use for a credit score. Like many of my generation, I'm slowly sliding down the economic ladder, resigned to the fact that I likely won't have the opportunities or security of my parents. While better off than many, my wife and I won't be able to buy a house, much less a car, any time soon. Together we've accumulated several kinds of debt—college, credit card, medical. As we work diligently to pay off these bills, we can at least rest easy knowing that companies like Experian sit in the background, assessing us, monetizing our daily behaviors, using their own security lapses to try to rope us into trusting them with more control over our economic lives. Soon, more than a billion Chinese will have the same privilege, whether they asked for it or not.