A lack of trust between individuals has long been as a problem for Chinese society—in a national poll in 2013, less than half of citizens said that “most people can be trusted” and only about 30% said they trust strangers.
The trust deficit has played out in the country’s many food scandals, and has made life difficult for some of its most successful companies. During Alibaba’s early days, the primary concern of many potential investors was how the company could get buyers to trust sellers they would never meet. Alibaba’s solution was to set up Alipay, an online payments service that held buyers’ money in escrow. It worked, but didn’t exactly engender an outbreak of trust in Chinese society.
The trust deficit doesn’t just apply to commerce: Chinese media has long pondered why potential Good Samaritans routinely see victims of accidents, hit-and-runs, or savage beatings in public, but do nothing to help.
The Chinese government is now pushing forward one potential solution to the problem by creating a “social credit system,” a sort of ranking regime that would give organizations and individuals a score based not only on their finances but on their social and moral history as well.
Rogier Creemers, an Oxford University China watcher who last month published a translation of the government’s 2014 outline of the law, told the Dutch newspaper de Volkskrant that a bad credit score could result in being shut out of not only business loans but also social welfare benefits and certain jobs. ”This is a deliberate effort by the Chinese government to promote among its citizens ‘socialist core values’ such as patriotism, respecting the elderly, working hard, and avoiding extravagant consumption,” he said.
A social credit system has been in the works since 2003, but as of yet there are only a few government departments that collect information on a person’s behavior to contribute to their score. In recent years though, the current government has begun building a platform where more government agencies can share their relevant data.
By the end of 2017, the government believes its social credit system will be able to provide a score to every individual, legal entity, and social organization in the country. That score will at first be based on their business records, tax payments, social security payments, and traffic violations. By 2020 a yet-to-be defined “set of laws and regulations” will be in effect that will punish individuals who act in ways that don’t square with the government’s push for integrity.
In a country with a weak legal system where even signed contracts are regularly changed, continuously negotiated, and easily broken, a social credit score would be a useful tool for many smaller companies in particular.
But the social credit system may fall short, on its own, as a way to create trust and integrity. Zhou Keda, a sociologist at the Chinese Academy of Social Sciences, says that China is failing to educate its people on the importance of integrity, and that the social credit system cannot provide a shortcut to social change. ”It is easy to build a social credit system,” Zhou told the Beijing Review, “but it takes more time to restore ethical behavior, improve the market economy system and promote equality.”