China Wants to Tap Big Data To Build A Bigger Brother
Near the end of
a draft released this week of China’s 13th Five-Year Plan, the authors of the voluminous national development blueprint inserted a six-character phrase that could nearly have been missed amid the draft’s 27,000 characters.The term translates to “social credit system.” The government, it said, must “strengthen the establishment of a national population-based information repository and improve the social credit system” to “improve the mechanism for crisis intervention.”
The otherwise innocuous term amounts to an ambitious social-engineering experiment that the Communist Party plans to undertake over the next five years. The details the government has released so far on it are vague. So far they sketch out a system that would evaluate the behavior of individuals and businesses by tapping on vast troves of personal digital data accumulated from its citizens’ online activity, such as purchases and other forms of digital presence, as well as data related to food-safety or pollution incidents for firms.
Experts say it goes beyond a financial credit rating system like the ones used in the U.S. and other developed countries. It could be used to govern activities ranging from a person’s ability to set up a business to his or her professional promotion.
The project has triggered concern among some China watchers that Beijing is girding for an invasion of its citizens’ privacy on an unprecedented scale. Its defenders caution that much remains unknown about the government’s intentions that Big Data could yield dividends in improving China’s governance. Big Data refer to extremely large data sets that are analyzed by computers to reveal patterns and trends, especially in human behavior.
“Certainly the hope of the Communist Party is that the system of social controls with which they’re most comfortable can be brought into the modern economy with only a few compromises for economic scale and growth,” said Anne Stevenson-Yang, director of research at J Capital Research.
Big Brother isn’t fresh off the boat in China. This is the nation built on the
dangan, a term that literally means archives, but in the Chinese context refers to personnel folders kept by officialdom. The
dangan followed a citizen for life, and recorded his or her every major move, including any flashy purchases he or she made, foreign friends he or she may have hosted, or even whether he or she had a thing for unusual clothing. That system thrived when China functioned under a planned economy but has broken down as the country grew quickly and moved closer to freewheeling capitalism.
“The need for mobility required China to break away from that system,” Ms. Stevenson-Yang said to reporters this week. “But they never figured out how they were going to enrich those records.”
Until now.
In June last year, the State Council, China’s equivalent to a cabinet,
laid out its social-credit mission in a public statement. It didn’t say exactly what it would do with the data it wants to collect, and experts say this may be for the simple reason that the government itself doesn’t quite know yet. The details contained in China’s latest quinquennial plan, which provides the Communist Party with its broad governing principles through 2020, are even briefer.
One thing is clear: a social credit rating would potentially have greater reach than the sort of credit profile in the West that determines how much money one can borrow.
The State Council spoke of the social-credit system as a tool to clean up corruption among its officials. It has suggested the system might come in handy for tax collection, presumably via government agencies sharing information on people’s asset ownership. It said the system could be used to influence employment, education, environmental protection and intellectual property rights. The government has pointed out that the system might be useful in conducting businesses including financial services and e-commerce.
Developing such a system could depend on cooperation with China’s e-commerce and social media giants.
China’s central bank earlier this year said eight e-commerce companies are taking part in a state-backed pilot project to build a system to assign “personal credit” scores for its users, which the central bank said would play a role in the larger social-credit project.
Among the eight are Sesame Credit Management, a unit of e-commerce giant Alibaba Group Holding’s affiliate Zhejiang Ant Small & Micro Financial Services Group, or Ant Financial for short, as well as social-media giant Tencent Credit Bureau Co., a subsidiary of the owner of China’s most popular smartphone chat app WeChat. An Ant spokeswoman declined to comment on questions, including how the “personal credit” scores would play into the government’s social credit system.
“Sesame Credit is the first credit agency in China to use a scoring system based on online and offline data to generate individual credit scores for consumers and small business owners,” she said. “It tracks financial and consumption activities of our users for generating the score.”
Tencent didn’t respond to calls and an e-mail seeking comment.
Civil liberties groups in the U.S. have sounded an alarm over the invasive potential of such a system. In the U.S.,
an intense debate over mass surveillance has sensitized watchdogs to similar potential abuses elsewhere, particularly in countries where the recourse to challenge the government is weaker.
“The dangers of surveillance and police control are the same everywhere,” Ms. Stevenson-Yang said. “Governments try to do that everywhere. But some systems have balancing powers, and obviously, [the U.S.] has a lot more and a lot more tools for individuals to use.”
Other Western analysts say the effort to capture data could in fact help China to address the most pressing issues of the day, including eradicating pollution and corruption, and improving food security, education and health care.
In a sense, the arrival of the digital
dangan was inevitable. Preparations for the 2008 Summer Olympics had already armed the government with vast capabilities to track vehicles and people through facial and fingerprint recognition technology at ports of entry. The advent of virtual money paved the way for the potential to collect and usefully analyze more personal data. The government has attempted to create credit bureaus before, but credit cards until recently were limited in use, and banks preferred to build their own database to check borrowers’ collateral, dispensing with and ultimately sidelining the prototypical credit bureaus.
The outcome of Beijing’s massive social experiment could still range anywhere between mostly benign to highly intrusive. This is a country, after all, where public expectation already is clear that
the state can control even the most intimate activities of its people. But the potential powers it hands an already pervasive authority pose questions for privacy, as well as a fact: Bigger Brother is heading for China.
–Chuin-Wei Yap and Gillian Wong. Follow Chuin-Wei on Twitter @YapCW and Gillian @gillianwong.
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