Beijing is amassing a colossal amount of individual and company data as part of its ambitious plans to build a national Social Credit System pegged to be fully operational by 2020.

Key points: A Social Credit System law is expected to be introduced in coming years

A Social Credit System law is expected to be introduced in coming years Localised scoring systems are being trialled by designated 'demonstration cities'

Localised scoring systems are being trialled by designated 'demonstration cities' The vastness of China means it could take years for the system to be fully implemented

The data-driven system, which has been widely condemned as "Orwellian" and often compared to a Black Mirror episode, is designed to monitor and engineer better individual and business behaviour by awarding the trustworthy and punishing the disobedient.

But analysts say 2020 is "not a magic date" at which the system will be fully implemented — rather, it's the end of the initial planning period — and the country could see a new batch of policies come out this year, potentially in a fresh five-year social credit plan.

Since the SCS blueprint was released in 2014, nominated cities and provinces have been trialling their own versions of the system, and millions of discredited individuals have been banned from luxury spending including air travel and boarding fast trains.

And in one of the latest and widest sweeping developments, Beijing announced a national corporate ranking system in September that was said to affect 33 million companies.

But to date, there is no national scoring system for individuals.

While many pieces of the SCS have already fallen into place after a flurry of new developments over the past year, there is still a lack of clarity around how exactly the system will run, which has made room for speculations and misunderstandings.

Why are people concerned about the SCS?

The Shenzhen traffic police website publishes the details of jaywalkers. ( Supplied: Shenzhen Traffic Police )

Before answering the question, it's important to understand how the Social Credit System works.

Trivium China, a Beijing-based consulting firm, explained in a recently published report on the topic that the SCS is made up of three interconnected components: A master database, a blacklisting system and a punishment and rewards mechanism.

According to the report, provincial and city governments, state agencies and the central bank have already been funnelling their data into a "master database" called the National Credit Information Sharing Platform (NCISP).

Kendra Schaefer, head of digital research at Trivium China, told the ABC that different agencies had made various levels of progress hooking their datasets into the master database.

Ms Schaefer said she expected to see a greater number of agencies "getting more deeply plugged in" in 2020.

"But I'm not sure that all agencies will be completely plugged in and feeding data by the end of [this] year — it seems like a real big lift," she added.

In recent years government agencies have also developed their own blacklists and red lists (for good behaviour) and have the power to blacklist companies and individuals that fall under their own jurisdiction.

In 2016, dozens of government agencies signed agreements to create a series of national blacklists known as the Joint Punishment System. This means individuals and companies that fail to comply with the law in one regulatory jurisdiction also face restrictions in other aspects of their lives or operations.

Rogier Creemers, a Chinese law researcher at Leiden University in the Netherlands, noted in a research paper published last year that the principle behind the punishments was "disproportionate sanction", as summarised in one government paper as: "if trust is broken in one place, restrictions are imposed everywhere."

This means an offender who violates food safety regulations wouldn't only be blacklisted and punished by the Food and Drug Administration, but other agencies would also take action against that person.

'Plane bans and spending limits': How do blacklists work?

Local governments are using the system to target different misconducts including jaywalking. ( Reuters: Thomas Peter )

In an interview last year, Mr Daum said the blacklist for court judgment defaulters was "most commonly confused with being the entire social credit system".

He said people were put on the blacklist when they failed to carry out a court-ordered judgement, such as paying a court award.

"It has really wide-reaching consequences, including a plane ban, a ban on riding on the best trains, some that I really don't care for, like your children can't go to private schools," Mr Daum explained.

"These are all called limits on high spending or high consumption.

"In China, the idea is that most of these [court] awards are going to be monetary and you shouldn't be spending a lot of money if you haven't paid back this award. Your money should be going to fix that problem."

Another controversial feature of the blacklisting system is the naming and shaming of untrustworthy individuals into doing the right thing.

The blacklists are easily searchable on the public-facing part of the NCISP called Credit China. The website displays the full name of discredited individuals and their partially-redacted personal identification numbers.

Maya Wang, a researcher from Human Rights Watch, told CTV News last year that "even if the blacklists are only used to enforce court orders, they can still be used to violate people's human rights because Chinese courts frequently make arbitrary decisions".

Li Jinglin, a lawyer at Xinqiao law firm in Beijing, previously told the ABC that pilot social credit systems had also been used to target those who pose threats to the Communist Party's rule or general "social stability" — dissidents and petitioners, as well as their families.

Will China's 1.4 billion citizens really be ranked nationally?



So far there are no plans for national scores for individuals — or at least none that have been reported. ( Reuters: Kim Kyung-Hoon )

It's true that the central government keeps social credit records on everyone, but it doesn't crunch that data into a national score, nor has Beijing announced any plans to do so — yet.

Some "demonstration cities", however, are piloting their own scoring systems using data from the central social credit database, but the point scales vary from location to location. So far, it's unclear whether all cities will eventually have a scoring system.

"Central authorities designated certain areas as pilots, encouraging them to innovate within the general framework laid out by national legal documents," Mr Daum wrote on his China Law Translate website.

"In this relatively controlled range, the local governments can identify successful practices, or problem areas, that might be spread to other areas."

In July, the eastern city of Nanjing announced jaywalking will be included in their individual social credit system.

Police said those who were caught jaywalking more than five times a year will be categorised as discredited individuals, reported Chinese state media, which also added that "public governance should prioritise problem-solving at the root cause rather than strict punishment."

Meanwhile, the south-eastern city of Xiamen has a city-wide scoring system — based on NCISP data — which issues numerical scores on a 0-1000 scale to citizens registered on a social credit app, according to Trivium.

Citizens can view their scores and access perks on the Xiamen Egret Points App, which offers rewards including deposit-free city bike rental and discounts on parking.

The Xiamen Egret Points app centres around a citizen's social credit. ( Trivium )

But while a lot of the public and media fixation has been on scoring systems, Mr Daum said they're largely educational.

He said while Shanghai had a scoring system and users can see their score by logging onto the Honest Shanghai app, not many people know about it because it's "not meaningful" to them.

Indeed, several Shanghai residents the ABC spoke to said they haven't heard about the app even though it was launched in 2016.

Zhongping Huang, a Shanghai resident in his 30s, doesn't know anyone who has been punished under the system, but said he acknowledged how it could eventually have a wide impact.

He also told the ABC that there was "no privacy at all" in China because all of the data were "held by the state and can be queried at any time".

"People attach great importance to privacy and human rights [in the West], while we are basically living naked," Mr Huang said.

"As a one-party state, we have only paid attention to the appearances of development frameworks, but have ignored and have a lack of respect for a higher demand of human rights and privacy."

Separate to the local governments' point systems, last March the People's Bank of China launched Baihang — the only company licensed in China to provide personal credit scores. Its shareholders primarily consist of China's online lending giants including Sesame Credit and Tencent Credit.

According to the Financial Times, Baihang was created to cover "the 460 million Chinese who have no formal credit histories but who may be relying on the country's vast fintech sector for loans" but the coverage has been "patchy" because of a lack of cooperation between Beijing and the major tech giants who are reluctant to handover the control of their customers loan data.

The Times quoted people familiar with the Baihang project as saying Tencent and Alibaba-affiliate Ant Financial's Sesame Credit have refused to pool their credit data with Baihang.

Is it accurate to call the Social Credit System 'Orwellian'?

Some CCTV cameras have facial recognition or infrared capabilities. ( Supplied: Dahua Technologies )

The use of big-data collection and analysis combined with increased use of surveillance technology across China has given rise to concerns around eroding privacy and violation of human rights.

Delia Lin, a senior lecturer in Chinese studies at the University of Melbourne's Asia Institute, told the ABC she believed Chinese President Xi Jinping's ambition was to create "a completely transparent society".

"[It's known as] transparent social governance … it means that everyone looks naked; all your data is shown, there's no privacy at all," she said.

"[The Government] believes that people and companies cannot be trusted, [and] the only way to administer their behaviour is to have this strong surveillance, and very strict rewards and punishment system to put them in place, to monitor their behaviour and to make sure they behave in a way that the government wants them to."

Samantha Hoffman, an analyst at the Australian Strategic Policy Institute, told the ABC that while many places collect data for various purposes, the difference was the CCP's intent.

"Social Credit is one part of a very massive surveillance state," she said.

"The framing of Social Credit as 'Orwellian' I think is fine, because that's ultimately what it is.

"But it also misses out on the part that social credit is also something that's meant to solve problems, but it's meant to solve problems within the framework of the solution ultimately being the party's maintenance and expansion of power."

The SCS isn't only a cause for concern for individuals. In August, the European Chamber of Commerce in China published a report warning European companies operating in China to prepare for the rollout set for 2020.

It said companies' behaviour will be continually monitored, with scores being adjusted accordingly, and businesses risked serious repercussions like sanctions or even blacklisting if they don't comply.

"China's Corporate Social Credit System is the most concerted attempt by any government to impose a self-regulating marketplace, and it could spell life or death for individual companies," said Jörg Wuttke, president of the European Union Chamber of Commerce in China.

What else can we expect from Beijing in 2020?

Ms Schaefer said in addition to the next batch of social credit policies, the firm was also expecting the release of a Social Credit System law.

"The way we were conceptualising it, this first six-year time span was intended to set the regulatory foundation for Social Credit," said Ms Schaefer, who also leads Trivium's Social Credit System Watch project.

"[This] year, the big release that we're expecting is … a foundational, comprehensive Social Credit law."

Mr Daum, however, said the national Social Credit law could be years away because it was still being researched and a draft is yet to be released.

But he said four provincial-level governments including Shanghai, Zhejiang, Hebei and Hubei have already released their own regulations and the national law could broadly look similar to Shanghai's.

Its regulation covered what information can be collected, what is considered untrustworthy behaviour, punishment measures, and what people can do to challenge incorrect information.



Can the Chinese Communist Party really pull it off?

Experts say the biggest obstacle the government faced in implementing the social credit system is "corruption". ( AP: Nicolas Asfouri, pool )

The SCS is an ambitious work in progress and the vastness of China means it could take years, if not decades, for the social credit system to be completely implemented.

"I think it's going to take a long time, because I think it's bureaucratically challenging — it's a big population, and getting all that data from all the different levels of government," Mr Daum told the ABC .

"My guess is if you were to look at some of the lower population countries in Europe … they already have systems where the data is largely centralised and readily available."

Mr Daum pointed to the Chinese Government itself as another challenge.

"It's a big government and it's not a terribly efficient government," he said.

"It's going to be very hard to get every policy put in place; especially when the rules for doing it aren't so clear, who has what authority isn't so clear, and getting all the county-level governments and the provincial-level governments to get information filed in a timely way is a real challenge."

Ms Schaefer said China's current technological capabilities had also been overestimated by the West, as some records of offenses were still being submitted manually.

"In the West, we're imagining people walking onto the subway and a camera automatically detects that you're breaking a rule and that automatically is hooked into your file," she said.

"I think that's [the CCP's] eventual aim, but right now, it's a little bit laughable."

The mini app in WeChat marks out "fraudsters" within a 500 metre radius of the user. ( Supplied: Naomi Zhou )

Indeed, when the ABC contact the National Development and Reform Commission (NDRC) — the government agency leading the establishment of the SCS — for a recent SCS story it said all media enquiries needed to be sent by fax.

Ms Hoffman said the biggest obstacle the government faced in implementing the social credit system was "corruption".

"Part of the goal is to share information and coordinate. If you have corruption and people who are interested in protecting their own interests [over] the parties', it's a contest for power within the party that's the problem," she said.

According to Trivium, the central government is also using the SCS "to ensure lower levels of government are compliant with national directives, are paying their bills, and are meeting their policy targets".

Dr Lin said while it was always difficult to predict what will happen in China, she was quite confident that the social credit system will be implemented despite all the obstacles because there wasn't much resistance from the public.

The ABC contacted the Chinese Foreign Ministry and NDRC, but have not received a response by publication time.