Sunday, January 13, 2019

People Are Gaming China's Mandatory Social Credit System Even Before Full Implementation

Buy diapers.
A few years ago the head of technology for Ant Financial's Sesame Credit said the system would assume you were a parent and responsible.
Of course for swinging singles the strategy might raise a few questions but that is the kind of stuff Chinese social media has been talking about for four years.

From the Lee Kuan Yew School of Public Policy at the National University of Singapore.
Global-is-Asian:
China's worrying mandatory social credit system 
It is optional for now, but in less than two years’ time, every Chinese citizen will be regulated under a broad social credit system that is the world's first.

The system is already being tested by selected companies and dozens of China's cities. Rongcheng, a city in the Shandong Province, has begun to rate its 740,000 adult residents.

All of them start with a full 1,000 points. A traffic ticket comes with a five-point penalty. On the other hand, heroic acts, donating to charity or volunteering gives one's score a boost.

Based on their score, individuals are allocated a grade ranging from a A+++ to D. High flyers enjoy benefits on rental of public bicycles, better terms for bank loans and discount on heating during winter.

On the other hand, restrictions may be slapped on those with low scores, such as temporary or permanent bans from buying plane or train tickets.

China's State Council says its social credit system hopes to establish and promote a culture of integrity. “Virtue is an internal requirement, and the reward and punishment mechanism is based on trustworthiness and distrust,” it said, in a public notice released in 2014.

Perhaps Dr Christoph Steinhardt, Associate Professor, University of Vienna's Department of East Asian Studies, offers a more realistic definition. “A nationwide system that uses digital technology to collect data from commercial, legal and social spheres, integrates this information in a centralised record and incentive system for trustworthy conduct and thereby seeks to steer individual, corporate and official behaviour.”

Individual, press and business freedoms
It is unclear how China's population of 1.38 billion will be rated when the system is officially implemented in 2020.

Some pilot projects prefer to keep their methodology secret. Sesame Credit, the financial arm of e-commerce giant Alibaba, would only say it uses a “complex algorithm” to rate users, the BBC reported. This includes tracking financial and consumption activities.

Sesame's technology director Li Yingyun was more candid in an interview with Caixin, a Chinese magazine.

“Someone who plays video games for 10 hours a day, for example, would be considered an idle person, and someone who frequently buys diapers would be considered as probably a parent, who on balance is more likely to have a sense of responsibility,” she said.

There are fears that the system will be used to silence the press. China is already ranked 176 out of 180 countries on the Reporters without Borders 2018 World Press Freedom Index.

Journalist Liu Hu, who has been detained for allegedly spreading falsehoods against the government, looks to be one of the first victims of the social credit system. Liu says he has been barred from buying plane tickets and property, and from sending his child to a private school. “You feel you're being controlled by the list all the time,” he told CBS News.

This control extends beyond the press and what they report. Punishing allegedly bad behaviour forces citizens to act a certain way to avoid penalties. Correct behaviour is determined by the state who are able to push their ideology onto the masses.

“Since the state decides which behaviours are included, how they are used in credit records, and what impact this credit record has on individuals, it is setting enforceable norms on what is “good” and “trustworthy” behaviour according to its ideology,” said Dr Steinhardt.

The system applies to businesses too. Starting from January this year, all companies with a Chinese business licence were allotted an 18-digit social credit code that the government can use to keep tabs on them.

Dr Samantha Hoffman, a non-resident fellow at the Australia Strategic Policy Institute, observed that Chinese authorities have pressured international airlines to use its preferred terminology when referring to Taiwan.

Qantas said it would use the preferred term, “Taiwan China”, on its global websites in line with China's wishes. In May, Japanese retailer Muji was fined 200,000 yuan (US$28,833) for listing Taiwan as a country on its products.

“Companies don’t have a choice but to comply if they want to continue doing business in China,” Dr Hoffman said, in an interview with Guardian Australia.

Big brother is always watching
All across China, there is already a heightened sense of being watched. The country has a network of around 170 million surveillance cameras. Another 400 million are set to be installed in the next three years.

“There’s no privacy and information security these days,” Li Shufu, Chairman of Geely Holding Group and Volvo Cars, said at a forum. “When you walk on the road, there are surveillance cameras everywhere.”

Authorities have also started to use a system that can identify people by their body shapes and how they walk. Developed by Watrix, it can zero in on a person's identity from 50m away.

“You don’t need people’s cooperation for us to be able to recognise their identity,” Huang Yongzhen, the company's CEO, told the Associated Press.

Few Chinese citizens were willing to talk about the downsides of a social credit system.

Perhaps they were heartened by signs that the government was being held accountable too. As of December 2017, over 1,100 government officials have been blacklisted for corruption. 

Can the system be trusted?
However, rampant corruption continues to threaten to create deeper social divides in China. Already there have been reports of residents using black data markets to boost their scores so they could be approved for a low-interest loan....MORE
Related, from Abacus, January 12:

China’s social app to rule them all wants to judge you for your purchases
Tencent has a new social credit system tied to WeChat Pay
China’s one app to rule them all, WeChat, has quietly launched its own social credit system -- meaning it plans to give a score to users of its platform based on their financial performance.

If you’re familiar with China’s Social Credit Score, this may sound creepy. But before you tweet this with the word “Orwellian” written in caps lock, hold off a bit, because this isn’t quite as frightening as that: This is reportedly more about earning perks for being good, instead of punishment for being bad.
The new system, called WeChat Pay Score, is similar to rival Alipay’s Sesame Credit: It scores users based on WeChat Pay data, personal consumption, compliance, and other behavior (like fulfilling obligations on time).

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)

Sesame Credit is much the same. It tracks your consumption data and habits and gives a score based on which you can get certain perks. This may be a deposit waiver or even the option to apply for a visa without giving bank statements.
However, there is one notable difference with WeChat’s new system. The social media platform told reporters on Wednesday at the WeChat Open Class PRO event that based on the social relationships in WeChat, the payment scores of WeChat between friends will influence each other.

We asked WeChat for clarification; they cast doubt on the reports, but declined to explain further.
If the reports are accurate, it could mean that your score would be affected by your friends’ scores. Luckily, the program is opt-in, which is good if your friends aren’t good with money – and let’s face it, most aren’t. (Well, mine aren’t.)

WeChat is famously China’s app that can do everything -- like hailing a cab, ordering food or booking a hotel -- and you can pay for it all directly with WeChat Pay. That’s a lot of data, so maybe it’s not surprising that WeChat wants to do more with the spending behavior of its customers.

However, it’s not clear if this data will feed into China’s state-sponsored Social Credit System – which judging by the analysis available, has the potential to be the scary in an Orwellian sense. The system, which is scheduled to be rolled out by 2020, has “red lists” that give rewards for good citizens… but also blacklists to punish people for bad behavior....
...MORE

Of course it will feed into the government's databases. I need to find the WeChat emoji for 'duh'.