Big Brother will keep an eye on Chinese businesses as the government’s social credit system compiles data on the country’s 1.4 billion people, The New York Times reported on Sunday (Sept. 22).
As China increasingly becomes a market economy, the government is becoming more concerned about improper conduct in the marketplace. Various agencies in the country are sharing information like copyright violations and payroll figures so a comprehensive database can be created.
Companies and individuals with low social credit scores will not only be publicly named and shamed, but also blacklisted from getting loans and buying airline tickets, the article said.
The surveillance measure will also affect American firms doing business in China. Companies refusing to cooperate will get “black marks on their records,” the NYT said.
United, Delta and American Airlines, for instance, were instructed to change their websites to say that Macau, Hong Kong and Taiwan were part of China.
“It’s supposed to affect the decision making of businesses to conform to what the party wants,” Samantha Hoffman, a fellow at the Australian Strategic Policy Institute, told the paper.
Business ratings are already underway in China. Some 33 million businesses were evaluated and ranked on a scale of one to four.
“The unified rewards and punishment system significantly increases the potential for one violation to snowball across your operations until you have this avalanche of penalties that make it impossible to operate until you solve that one thing,” Kendra Schaefer, head of digital research at Trivium China, told the NYT. The firm recently published a report on social credit.
The Chinese government has been working on a social credit system designed to be a “method to perfect the socialist market economy system, accelerating and innovating social governance,” a state council report indicated.
In 2018, millions of Chinese travelers were banned from buying airline tickets because of outstanding social credit offenses. People were blocked from buying tickets 17.5 million times last year for offenses such as unpaid taxes and fines. Consumers were also barred 5.5 million times from purchasing train tickets, and 128 people were blocked from leaving the country because of unpaid taxes.