We are in the era of “social credit”, ie measurements of the goodness and conformity of our attitudes towards legal norms and regulations but also, and above all, rules of conduct on social media. The government networks that are developing in China in the collection of individual data are accompanied by surveillance by social media companies in the United States whose data are used in the evaluation of the individual by the state apparatus. Fabio Vanorio’s analysis.
Following what Beijing started in 2015 with the introduction of an individual social credit system, after almost five years, China is completing a similar system for companies by providing a system of sanctions and incentives based on macro behavior data ( compliance with internal market regulations) and micro (attitude of personnel and suppliers towards the Chinese system), collected by various central and local government agencies in a single central database.
China’s individual social credit system is a nationwide technology-based and surveillance program designed to induce citizens to behave better. The final goal of the Chinese government is to inspire the community to a so-called “Sincerity Management Model”, thus “allowing those who are trustworthy to roam everywhere under the sky, making it difficult for those who have been discredited to take a single step “.
In force since 2014, the social credit system is a work in progress that should evolve by 2020 into a single national rating for all Chinese citizens, similar to a financial credit scoring.
The system aims to punish transgressions (which may include membership or support for organizations not recognized by the government – such as Falun Gong -, non-payment or delayed payment of debts, excessive addiction to video games, excessive criticism of the government, but also not cleaning the sidewalk in front of one’s shop or house, smoking or playing loud music on trains, jaywalking) deemed illegal or unacceptable by the Beijing government.
Punishments can be severe and include bans on leaving the country, use of public transport, hotel check-in, hiring in highly visible settings (CEO, public top management), but also slower internet connections. and social stigmatization in the form of public blacklisting. At the same time, points can be earned for charitable donations or even for accompanying parents to the doctor.
Currently, some parts of the social credit system are in place nationwide, while others are local (around 40 pilot projects run by local governments and at least six by tech giants like Alibaba and Tencent). Beijing maintains two lists at national level, which can be consulted on the government website Credit China: a blacklist (for those who have committed violations) and a redlist (Chinese version of the common “whitelist”, for those who have remained legally). The Chinese government shares the lists with the technology platforms.So, for example, if someone were to criticize the government on Weibo (the Chinese equivalent of Twitter) or spread fake news, they could later run into difficulty, for example, in seeing their children accepted in an elite school. . Public mockery is part of the Chinese social credit system. Images of blacklisted people were shown on video on TikTok, as well as addresses of citizens in similar locations were located on WeChat public maps.
Many Chinese are unaware of the existence of such a system, many others like the idea (a survey found that 80% of Chinese citizens surveyed are, in some way or strongly, in favor of the social credit system) , and many others reject it as in the coastal province of Zhejiang, where local communities have refused the use of a digital tool to keep themselves informed about the activities carried out by neighbors.
Western concern towards the Chinese social credit system is high, but largely not for ethical aspects but in order not to lose the opportunity to access the third largest market on a world scale (quantifiable in $ 5,634tn).
Foreigners fear that due to the tight and complex trade negotiations between the United States and China, Beijing may use the corporate social credit system against international companies. Following the analysis by an Artificial Intelligence algorithm of the measure of compliance of companies with the laws and regulations of the country, there may be restrictive measures in the access to preferential public policies, or of greater severity in administrative sanctions, or denials of access to land purchases, certain loans and tenders. According to a report by the EU Chamber of Commerce in China, drawn up with the contribution of Sinolytics, (consulting firm specializing in China-related issues), the social credit of a foreign company could affect the individual credit score of the company’s key personnel and vice versa (a topic of particular concern to foreign investors). A company’s social credit could also be affected by the behavior of its suppliers as well, and deletion from such a blacklist could take years.
The aforementioned fears have found concretization. At the end of May, Beijing said it was drafting a “blacklist” made up of foreign entities deemed unreliable in apparent retaliation for Washington’s campaign against Chinese telecommunications giant Huawei Technologies Co, effectively introducing the system of social credit in trade conflict .
According to the Beijing-based consultancy Trivium China, whose clients include foreign companies, the creation of the corporate social credit system should not be associated with the US-China trade negotiation (being under development since 2014, thus far earlier), but to the need on the part of the central government in Beijing to collect large quantities of systematized data. Huge amounts of data collected by the Chinese authorities that administer the corporate social credit system provide a massive x-ray of the Chinese economic landscape allowing for information sharing. The report by the EU Chamber of Commerce in China noted, for example,
A common opinion is that the new regulations will lead to an increase in compliance costs and a more uncertain and precarious investment climate in China for foreign companies, but also for tourism.
Some of the Chinese corporate giants are involved in introducing the new corporate social credit system. Huawei, Alibaba Group (e-commerce and cloud services operator) and Tencent Holdings (mobile services giant) are among the members of a consortium entrusted with the development of one of the key databases of the system. These companies work together with the Chinese government agencies that lead the implementation of the corporate social credit system – the State Council, the State Administration for Market Regulation, the National Development and Reform Commission. , NDRC) and the Ministry of Commerce.
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The systems shown are not only used by China. Similar systems are spreading in the United States as a result of Silicon Valley and tech industry policies and, in particular, through social media surveillance.. Most Americans have dozens of scores, many of which are determined by financial, consumer, behavioral, and demographic metrics, and most of which are computed by companies that do not allow them to be circumvented. Others are voluntarily monitored to benefit from the advantages of being “known subjects” to algorithms such as Amazon, eBay, Facebook or Netflix. Through a process of so-called “identity resolution”, the data aggregators allocate the various pieces collected, creating our digital identities with characteristics that, sometimes, we do not even know.
Some typical examples of the growing digital profiling system aimed at an individual American social scoring can be found in the following:
- in June 2019, the United States began to request for the issuance of visas to specify their social profiles as part of the requests. A few days ago Ismail Ajjawi, a Harvard student, was denied entry to the United States at Boston Airport by Customs and Border Protection (CBP) because of what one of his friends had posted on social media (“Guilty by association”). This need followed a 2017 decision by the Department of Homeland Security to monitor the use of social media by all immigrants, including naturalized citizens.
- Earlier this year, the New York State Department of Financial Services announced that life insurance companies can also base premiums on what they find in posts on their policyholders’ social media accounts. The use of social media thus becomes an extension of the lifestyle questions typically asked when applying for life insurance, such as rock climbing or other extreme sports. Responding negatively but then posting photos of yourself in extreme solitary situations is a contradiction that the insurance would take into account.
- Since last May, Uber has introduced the rule that if the customer’s rating becomes “significantly below average”, that customer can be banned from using the service. The rating at the end of each trip, in fact, is bilateral, by the customer and by the driver, and drivers often do research on social networks to identify a customer before starting a ride.
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There are obvious differences between what started in China and what was in the United States. In the United States, social credit systems are independent of each other and, with the exception of the visa system, are still far from centralized government use. Unlike the policy of the Chinese government, moreover, the social credit system that emerges in the United States is applied by private companies. While in the public case, there may be some form of recourse, in the private case the opposition to how these regulations are applied is impossible.
There remains only one certainty, therefore. An increasing number of social “privileges” related to transportation, housing, communications and tariffs for services (such as insurance) are controlled by social media companies or are affected by how their technology services are used. And Silicon Valley’s rules for using their services are getting stricter .
If current trends continue, it is possible that in the future some crimes will be punished by Silicon Valley, rather than by state regulations.. Also for their agility compared to the bureaucratic slowness of governments which often makes many rules already presented as effective inapplicable. Bloomberg reporters recently traveled across China to see how the social credit system was developing and found mostly fragmentation and ineffectiveness in use.
People like to describe China’s social credit system as an Orwellian new tool of centralized control.
In truth, it’s much more like the chaotic, nonsensical oppression of a Franz Kafka story (thread):
https://t.co/cOmLQFk1vQ
– David Fickling (@davidfickling) June 21, 2019
In other words, therefore, in the future, law enforcement may be determined less by codes and laws, and more by licensing agreements for end users.
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Fabio Vanorio is an executive of the Ministry of Foreign Affairs and International Cooperation. He is an expert on the subject in Intelligence and National Security, as well as in military and security applications of Artificial Intelligence. He also writes for the Italian Institute of Strategic Studies “Niccolo Machiavelli” and for the Hungarian Defense Review.
DISCLAIMER: All opinions expressed are wholly of the author and do not reflect any official position attributable to the Italian Government, nor to the Ministry of Foreign Affairs and International Cooperation.