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China just announced a new social credit law. Here’s what it means.

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China just announced a new social credit law. Here’s what it means.

The West has largely gotten China’s social credit system wrong. But draft legislation introduced in November offers a more accurate picture of the reality.

MIT Technology Review,

5 min read
3 take-aways
Audio & text

What's inside?

China’s credit system monitors its citizens’ financial and social activities.

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Editorial Rating

9

Qualities

  • Eye Opening
  • Overview
  • Background

Recommendation

In 2014, China’s leaders released the blueprint for a “social credit system,” alongside a financial scoring plan, that would monitor citizens’ behavior and enforce “state-sanctioned moral values.” Many Western observers imagine the system as a vast technology network controlling people’s lives. Not so, says journalist Zeyi Yang, but questions remain about its economic and social implications. Yang examines the framework through its origins, its ongoing development and future plans. Business leaders interested in a detailed assessment of China’s social credit system will find valuable intelligence in this eye-opening report.

Summary

China’s credit system is built on a foundation of financial and social scoring. 

Western economies have well-established financial reporting systems that document consumer and business transactions. China has been working since 2014 on a structure to collect and share customer data for routine financial activities. In November 2022, officials unveiled a legal framework for a sovereign social credit system that would exist alongside a financial credit bureau. The initiative aims to create a parallel social score that reflect individuals’ trustworthiness in nonfinancial situations. 

Though officials have not yet specified the rating approach, the social credit system will apply to people, businesses and government ...

About the Author

Zeyi Yang, based in New York City, is a journalist covering China for MIT Technology Review.

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