Sunday, January 17, 2016

China and the Idea of Social Credit (Sesame Credit)




In December 2015, news leaked about China rolling out a new social credit system called Sesame Credit. Sesame Credit is currently in a voluntary testing phase, but will become mandatory in 2020. Previously in China, your actions were only monitored by government agencies (that’s why anything coming or going out of China’s internet is so damn slow), but Sesame Credit will score your information based on what the government considers productive versus idle/lazy/wasteful/illegal – represented by a number between 350 and 950.  Sesame Credit amalgamates material known about an individual from their government and judicial records, internet usage, spending, and social media. There are lots of articles about the basics of the system, so rather than repeat what every other site says, I encourage you to do some background reading about what we know so far. 


What I want to talk about is, does this matter? Is it important? What are the implications? Are we living in, as every other editorial website has ever so cleverly quipped, 1984?
The sesame credit system obviously seems despotic, invasive and unnatural, but is it new?

To sum it up, not really. Credit ratings based on your financial history have been around since the early 1900’s, and are fully integrated into North American lifestyles. And while other systems don’t seem nearly as invasive as China’s proposed system, they are still pretty damn invasive, especially in a culture where you don’t typically talk about how much money you make or how much debt you accrue. Credit record systems are important in a society centered on loans and spending, and major financial institutions can easily know everything about your debt, the loans you have taken out and your repayment behavior. This data can affect things such as your ability to get a cell phone, insurance, a car, or anything where payment will be assumed to occur in trust. However, while the theoretical question being addressed in the case of credit ratings would be Can I trust this person to pay back their debt? It seems like China is asking Is this person a “good” person as defined by the state?

China, on the whole, is a very law abiding culture, and systems of social control have existed for all of the country’s recorded history. The Mandarin symbol for “good” is a pictogram of a woman and child, weaving the idea of having a wife and children in with the very fundamental concept of “goodness”. Confucianism, one of the oldest recorded philosophical traditions, emphasizes putting ones responsibilities toward others ahead of one’s own interests and, generally, being virtuous. “If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame. If they be led by virtue, and uniformity sought to be given them by the rules of propriety, they will have the sense of the shame, and moreover will become good." (https://en.wikipedia.org/wiki/Confucianism) Really then, a social credit system attempts to move toward obedience to the state as a guise of pursuit of virtue and away from obeying laws out of fear, which was Confucius’ ultimate goal.  As Wikipedia points out, the rulers would spread their virtue to people instead of imposing proper behavior with laws and rules. You can certainly see a Confucian influence on this type of system.

To help understand the similarity between the proposed sesame credit system in China and current private ventures that already exist in control of private corporations, let’s take a look at the major aspects of the sesame credit system currently being discussed and how they compare to systems in place in the rest of the world.


Traditional credit information such as major assets, debt, bank and credit information is scored. This can be used to determine if they can receive a bank loan or sign on to a lease.


This is exactly how the North American credit rating system is set. Financial institutions share information about you (their patrons) with each other and give you a score based on your debt, assets, repayment and bank information to determine if they can trust you with yet another loan. This has never been formally in place in China, and so the concept seems as reasonable as it is in other countries, however reasonable you might deem it to be.


Internet usage is monitored to determine what kind of person they are, lazy vs productive based on what they spend their money on, and where they spend time online.


Spending habits and spending time online is already very closely scrutinized by a number of organizations, and selling marketing data continues to be ridiculously profitable. Governments have already admitted to sniffing everyone’s packets for the purposes of protecting us from terrorists.  

Meanwhile, monetization of spending and examining where people’s eyes look for the purpose of selling them more junk are a much higher priority for private corporations monitoring us. That information can be sold for a lot of money when it is analyzed for targeted advertising, or to prompt people to spend more money. For decades now, people have been entranced by earning “points” on their shopping cards, such as Air Miles, Shoppers Drug Mart and Safeway cards. These were just the beginning: nearly every store now has some form of “points”, or way of tracking your spending by requesting your phone number or email address when you buy an item at the till.

Even more insidious, credit card companies and banks have held the lion’s share of your marketing data for your whole life, as the most convenient way for you to pay for items is using your credit or debit cards. All the items you buy (and the day and time you bought them) are conveniently indexed for credit companies and banks to sell off to other companies, or to target you in further advertising and promotions.

As for assessing the type of person you are -- none of that is important in places like North America, where you can do just about whatever you want with yourself, as long as it doesn’t impact your ability to be a productive citizen; that is, you can hold down a job, pay your bills and invest in the economy. That’s the main reason why hard drugs are still illegal.


Advantages of high scores: faster loan approval, deposit not required for hotel/cars, VIP reservations, prominent dating profile, fast tracked travel permits


This is the carrot at the end of the social credit stick, and I have to admit some of these advantages would be pretty good (fast-tracking anything you need to get through the government sounds amazing). However, if it is anything like our current credit rating system, only people who already have a substantial amount of wealth will be able to take advantage of these benefits, as people with little income will be unable to substantially increase their scores. One of the problems with gamification is that you can’t make things too easy, or everyone will have all the benefits and there will be no motivation to improve. Either getting these scores will be impossible to achieve except for a small percentage of elite Chinese, or the system will start to ‘push back’ the benefits, and make the scores higher and harder to reach. Either way, the bottom 90-95% are pretty much screwed no matter how hard they try (in which case the real question is, will the average person figure this out, or just keep trying against the odds?)

Poor people may appreciate the improved chance of loan approval, but what is the point of the other perks if you have no money to begin with? How would this possibly motivate them? How is this anything but another perk for people who are already wealthy?


A national database will merge information on every citizen, including tax information, traffic tickets, academic degrees, and medical records


To be honest, I’ve always wondered why this has never happened in North America. Is the government really unable to compile data on education, criminal records, taxes and health records? I understand there are a lot of privacy laws in place, but it does seem like society could benefit from merging these pieces of information. Other than an infringement of privacy, I’m not really sure what the downside of this could be, and the advantage could be that things might actually get done faster.
Now that I mention it, a form of this actually is now taking place in the United States; a new “Threat Score” has been created (http://disinfo.com/2016/01/metadata-comes-home-with-new-threat-score-policing-tools/).

This new system, starting as a piece of software called “Beware” in the California Police Department, analyses and scores data such as arrest reports, property records, commercial databases and social media posts to calculate an individual’s threat score. This is already in place in the U.S. Expect it to catch on.


Certain professions will face particular scrutiny, including teachers, accountants, journalists, veterinarians, tour guides, doctors, government officials, reporters, CEOs and statisticians. People with low scores will be barred from these positions.


This has already been trending in North America: the idea of a publicly accessible database of individuals’ experiences dealing with professionals. There are multiple websites where you can rate your doctor, professor, job placement, funeral, landlord, agency or boss. EBay and other shopping websites allow you to rate sellers. LinkedIn and other job websites let people snoop on one another, and has started using Salesforce’s employee performance review system to assign scores. The substantial difference is that Sesame Credit is overtly stating that your social credit score can prevent you from getting high ranking jobs, while outside of China, although it isn’t being said explicitly, you can be assured that any potential employer will read every scrap of gossip about you online they can find (LinkedIn, Facebook, or just a good old fashioned google search), which can also prevent you from getting ANY job at all.


Your rating can be raised by using Alibaba’s money system, Alipay.


This is one of the stranger sounding decisions to affect your Sesame Credit score. By simply purchasing a specific brand of online currency, your score goes up? I’m not sure if this is the case, but if it is, it seems very corrupt. However, the Sesame Credit system is created by Alibaba’s parent company, Ant Financial, so maybe this is their way of recouping costs. Again, only people with a lot of money to spend, or people racking up large amounts of debt, will be able to improve their score this way. I can’t see this feature being sustainable as it will be easy for critics to point out as a flaw in Sesame Credit’s measurement. If all you have to do is buy their money to increase your score, then the system has no true measurement ability at all. This feature seems like it could be a fabrication, but only time will tell.


Score can be lowered by posting political opinions without permission, describing history differently from the ”official” one, or publishing news embarrassing or contrary to the Chinese Government, whether it is true or not. *Note: This aspect of Sesame Credit has not been verified, and could possibly be just speculation. But, assuming a worst case scenario, let’s suppose it is true.


Similar to making terrorist threats or whistleblowing government secrets to sites like Wikileaks, it is no surprise that the right kind of dissent can be an arrestable offense, or at least set off a red flag on the profile the government has on you. It is no secret that if you are sharing secrets online, the people behind the secrets will get upset and find you. Sure, the Chinese government is already very strict about what is considered worthy of a red flag for suspect/detainable material, but this is not new, and this is no secret. And unless you plan to follow in the footsteps of Ai Wei Wei, Chinese citizens probably already take precautions to avoid this type of unwanted attention.


Score can be modified by the people you associate with online, depending on what their scores are can lower your score if theirs is lower, but it is not clear if it can raise your score or not. Again this item is more speculation than fact and has not been verified by Chinese authorities. However, even if these associations do not directly lower your score, a person will be more aware of them, and may end connections to people on the fact that the state does not approve of them as a person.



Okay, this one is potentially scary, as they seem to be taking the next step to shape the social lives of China’s citizens. However, it seems much more likely that the system would not directly impose these rules on your credit score and instead would merely imply that you should reconsider your friendship with certain individuals. People concerned with their score will already be the type of person to rid themselves of damaging friendships. People who are indifferent to the effect on their scores will continue their friendships, so I suspect this will not be directly implemented in the long term. Even if you have to remove someone as a friend on social media, it doesn’t stop you from being friends in real life, and people are already becoming familiar with the logic of adding and removing friends from particular accounts (and setting up fake or secondary accounts) for different reasons.




Gamification of the score by being able to download the app to show your score to others, and play a game where you try to guess if your score is higher or lower than your friends/acquaintances/enemies?


The gamification can serve a few different purposes, first of  all by sharing scores to  put social pressure on to “keep up with the Joneses”, and secondly to try to appeal to people with a predisposition to the  appeal of gaming and to give them a motivation to strive for this particular high score. To try to convince a gambling addict to stop gambling so he can improve his social credit score would be a misguided approach, since gambling appeals to the idea of luck and an easy solution to financial problems, while improving a social credit score would require hard work without a guarantee of a reward. This may have an appeal to gamers, but I can’t imagine the ‘rush’ of increasing a social credit score would compare to the rush of fragging bozos in an online video game.


Other speculation: while they may have lifted China’s one child policy, it is always a possibility they could tie the ‘privilege’ of child birth with social credit score.


Sure, this seems insidious for anyone with the fundamental belief that everyone is entitled to have children. But unfortunately, in the present day, the earth is dealing with problems of overpopulation and raising a child now is incredibly expensive. The problem here would more rest with the concept of eugenics, in that the state would be controlling the right to breed by only giving the privilege to obedient citizens, breeding further obedience in future generations, while the party overlords and their children continue on the path of European style nobility.


Making Sense of Social Credit: A Global Perspective


To attempt to address the problem of how a society will be affected by the imposition of social credit, let’s look at another prominent problem – the rise of heroin use.

Ever since the Opium Wars in the 1800’s, heroin use has been cracked down on in China. However, since the 1990’s there has been another surge in opiate addiction despite potentially harsh consequences. Possession of any amount will guarantee you prison time, and possessing 50+ grams or proof of trafficking can result in the death penalty (http://www.kcba.org/druglaw/pdf/ChineseDrugPolicy.pdf)

Yet, despite China’s harsh drug penalty, drugs continue to be used, for as long as people have known of their existence. Currently there are about 900,000 registered drug addicts in china, but total regular use estimates are as high as 12 million. With a recorded population of 1.376 billion, that is 0.9% of the population (https://en.wikipedia.org/wiki/Illegal_drug_trade_in_China#Drug_law_enforcement_agencies_and_legislation).

Compare this to neighboring country Pakistan, where 4.2 million people are addicted to narcotics, according to a 2014 assessment. With a population of 199 million, that’s 2.1% of the population. More recent estimates are closer to 6.45 million, or 3.2% (http://www.medicalnewspk.com/report-on-drug-abuse-statistics-in-pakistan/). Trafficking heroin can also be punishable by death in Pakistan, and Pakistan has similarly draconian drug possession penalties to China. So while having drug use rates 2-3 times higher than what is reported in China, drugs are also more available, as Pakistan is as a major exporter of opiates and is next door to the largest producer, Afghanistan. Understanding Pakistan’s drug problems through the drug’s availability and government corruption can help us understand China better. China has very strict control on the flow of information coming out of the country, so more specific details about government corruption and true opiate usage rates may be far from accurate.

Point being, despite the despotic rule that has been going on in China, a substantial number of deviants in the form of dissidents, drug addicts and corrupt government officials more than prove that systems of control are not effective in completely eradicating deviance from cultural norms. Although the implications of a social credit system are rightfully dreaded, time has proven that people will find ways to dissent against forms of social control. 

The Sesame Credit system seems more as if this system serves to give people with money more perks and incentives, rather than to motivate the average citizen to tow the communist party line. For a country that claims to be communist, China’s government’s actions seem to function more like the world’s largest corporation; only now is China stepping up their efforts to understand their citizens as consumers -- opening up ‘opportunities’ for people to take on more debt, engage in only state-approved activities, and spend their credit granted ‘perks’ (which all just happen to consist of ways to spend more and more money). While these are things to be concerned about, these tactics are used by corporations outside of China, only with more diffused and seemingly-benign methods. If you feel like something needs to be done about the manipulation and data collection of everyday citizens in China’s Sesame Credit system, ideas to thwart the systems that are currently in place in your own country seems like the best place to start.