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Garbage-sorting violators in China now risk being punished with a junk credit rating

A garbage collector rummages through trash cans to find recyclable garbage at a residential area for migrant workers in Beijing May 7, 2013. For two decades, Chinese local governments have been able to ignore the problem of housing migrants, thanks to the makeshift villages and other arrangements that accommodate about 40 percent of migrants.China has pledged to double household incomes over the coming decade in a bid to close a wealth gap so wide it threatens social stability. Although the proportion of extreme poverty has fallen over recent decades, about 12 percent of the country's 1.3 billion people still live on less than $1.25 per day, according to a 2013 United Nations report. Picture taken on May 7, 2013. REUTERS/Kim Kyung-Hoon (CHINA - Tags: BUSINESS SOCIETY WEALTH) - GM1E99513CW01
Reuters/Kim Kyung-Hoon
“Where does this go?”
By Echo Huang
Published Last updated This article is more than 2 years old.

Failing to sort out your trash could make it harder for you to get a bank loan in China.

The new regulation passed last week in the eastern province of Zhejiang is the latest move by Chinese authorities to incorporate daily misdemeanors into the country’s burgeoning social credit system. “Violators will not only be punished, but also have the infraction recorded in their credit histories” and affect their ability to borrow from banks, reported state news agency Xinhua.

Beijing said in 2014 that it wanted to build a social credit system (link in Chinese) by 2020, an effort viewed as a bid to tighten control over residents. Other local governments have since followed suit and developed their own social credit systems. Separate from the government, Chinese tech giants like Alibaba and Tencent have since developed their own credit systems to gauge creditworthiness or reward customers.

In July 2017, Shanghai became the first place in China to establish a local social credit system regulation (link in Chinese), which penalizes behaviors such as the failure to pay taxes or providing false information. That could mean loans become more expensive or insurance products are harder to buy.

Transportation is one area where the social credit system is expanding rapidly. Selling fake train tickets or smoking on trains can also hurt your credit history, and will be kept on record by railway authorities for five years, according to a national regulation (link in Chinese) published in January 2017. In the southern port city of Shenzhen, local police started linking jaywalkers (link in Chinese) with local social credit systems in March. In Ningbo, a major port and industrial hub in Zhejiang, violations such as ticket evasion on the subway and overdue payment of electric and water bills have also become part of the local social credit system as of July 2016 (paywall).

Correction, Jan. 10: This article earlier stated that Beijing intends to give every citizen a social credit score by 2020. It is still unclear how government “social credit” systems in development will rate individuals. Language in other parts of the piece were revised to reflect that.

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