Should We Fear China’s Corporate Credit System?

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china has embarked on a data-gathering endeavor on the scale of the Great Wall. The plan is to collect extensive information on its population and domestic and foreign companies so as to give them a reputation score that measures trustworthiness in social and economic interactions. Companies will be obliged to assist by turning over a large volume of information to the government.

People and businesses have responded with alarm at the imminent arrival of a dystopian future of mass surveillance and rewards and punishments designed to manipulate behavior. But is the credit system, planned to be unveiled sometime in 2020, truly something that we should be concerned about?

In a way, this “score” is not so different from your credit score, though of course it’s based on more than just financial history. It is worth noting that even in the United States, lenders have started reaching beyond financial history data as a basis for making lending decisions. Research published in 2017 by the Yale Journal of law and Technology referred to an “explosion of startups” that mine online and offline data.

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