China Embraces Credit Ratings — On Everything?

Everything has its value. Even good — and bad — behavior.

The movement toward rating, well, everything, in terms of credit scoring is gaining traction in China. The Wall Street Journal reported that any number of routines in daily life are getting assigned credit impact by at least one local government in an effort to enforce and influence individual behavior.

The WSJ reported that in Hangzhou, the local government is in the midst of a pilot program that will have a possible nationwide rollout through 2020, with an eye on what is termed “social credit” — and it reaches across digital records that examine far-flung social activities and financial activities. The upshot is that people who do not conform to the rules get dinged on credit scores.

The data is compiled using algorithms, which are used as the government scours infractions ranging from jaywalking to family planning transgressions, said the WSJ. And as with anywhere else, the impact of a lower credit score impacts who gets loans. Documents cited by the WSJ noted that “social governance” will foster a system that will “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step.”

One branch of oversight that has taken the new system to heart is the country’s judiciary, which has started a blacklist that has staunched some individuals’ efforts to buy plane tickets or travel amid higher-end luxuries. Conversely, those who exhibit model behavior get access to what are termed “green lanes” that streamline use of government and other services. The surveillance extends to include businesses, said the WSJ — with the aim of keeping corporate behavior in check. Alibaba’s Ant Financial is among eight companies that have been approved to assign credit scores and join the pilot program.


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