Akshit Bhatt
Akshit Bhatt
Akshit Bhatt
According to the Chinese government, the system will use big data to build a
high-trust society where individuals and organizations follow the law. It will do
so by assigning social credit scores to each entity based on their behavior, which
are translated into a variety of rewards and punishments. Since it was formally
announced in 2014, the plan has received considerable attention in international
media for its potentially dystopian capability to monitor and control individual
behavior.
While these concerns are valid, they do not represent the full scope of the
system and its more benign aspects, particularly as it relates to business.
Moreover, a number of myths and misconceptions have arisen about what the
social credit system is, how it works, and what its implications will be. With
this confusion in mind, we offer an introduction to China’s social credit system
and how foreign businesses should prepare for its implementation. Although
most reporting on the social credit system has focused on its relationship with
individual citizens, it applies to two other groups as well. There is one social
credit system for citizens, one for businesses and other organizations, and one
for government officials.
Broadly speaking, the main purpose of the social credit system is to monitor and
assess each group’s trustworthiness, particularly as it relates to following laws
and other rules.