China’s Social Credit system – Punishments and Rewards.
The China social credit system is a broad regulatory framework meant to report on the ‘trustworthiness’ of individuals, organisations, and governmental bodies across China.
1. The goal of the China social credit system is to provide a holistic assessment of an individual’s, or a company’s, trustworthiness.
2. The China social credit system, while still in development, is arguably an extension of existing social rankings and ratings in China which have existed for millennia.
3. The consequences of a poor social credit score could be serious. It may affect travel prospects, internet access, employment, access to finance, and the ability to enter into contracts. On the other hand, a positive credit score could make a range of business transactions much easier.
4. It is essential that any foreign business consolidating or establishing their presence in China seek professional advice for managing a social credit score. This applies both to individual scores, and the corporate social credit score.
The term ‘social credit’ (社会信用体 in Chinese and shèhuì xìnyòng tǐxì in pinyin) doesn’t have a precise meaning — rather, it is an intentionally broad and vague term allowing for maximal policy flexibility.
Plugged into a regulatory framework, the ‘China social credit system’ (also known as ‘China’s Ranking System’) refers to a diverse network of initiatives aimed at enhancing the amount of ‘trust’ within Chinese society.
The goal of the social credit system is to make it easier for people and businesses to make fully-informed business decisions. A high social credit score will be an indicator that a party can be trusted in a business context.
The system began with a focus on financial creditworthiness, similar to credit scores used in western countries, and moved on to include compliance and legal violations.
The eventual ‘end-state’ of the system is a unified record for people, businesses, and the government, which can be monitored in real-time.
In more recent years, policy development for the social credit system has moved beyond considerations of financial creditworthiness and compliance to encompass a broader notion of ‘trust’.
A common theme in the policy documents establishing the social credit system is the term ‘Chengxin‘, variously translated as ‘trustworthiness’, ‘honesty’, ‘integrity’, ‘sincerity’ or ‘morality’, depending on the context.
Historical Background to the China Social Credit System
While the introduction of a unified China social credit system was formally announced in 2014, precursors to the proposed social credit system have operated within China for centuries — arguably millennia. The idea, or philosophy, behind social credit, might be traced back to the ‘warring states’ period of Chinese history. At that time, various schools of thought competed for dominance: Confucianism, Mohism and Legalism.
World Economic Forum – 3 Pillars Of The Great Reset
1. Surveillance 2. Finance 3. Scoring
The World Economic Forum (WEF) has a plan to implement by 2030 where your property, identity and your money are all monitored and controlled by your Government (The Great Reset). Executive chairman and founder of the WEF Klaus Schwab along with it’s members were NOT elected or voted for, but have immense power and control over all aspects of a citizen’s life. Let’s explore the 3 pillars of The Great Reset:
The possibility of total surveillance where citizens will possess a global digital identity. Your digital identity would be linked to area and aspect of your life. You would need your digital id for social media, internet access, financial transactions, booking plane and train tickets. Membership could even be a requirement just to spend your own money. So, who would control the Digital ID and all the data it holds? Your Government of course. In short, every action and transaction could be tracked and monitored by your personal digital id. Klaus Schwab has said that RFid (radio frequency) chips will be used to track and monitor goods and packages around the world, decreasing friction whilst increasing efficiency within the global economy. However, referencing the same technology Schwab said, “in the near future, similar monitoring systems will also be applied to the movement and tracking of people.” He also said that there will be “…a fusion of our physical, our digital and our biological identities.” Echoing later on The WEF website they discuss a future where “we are entering the era of the ‘internet of bodies’: collecting our physical data via a range of devices that can be implanted, swallowed, or worn.” A WEF member wrote an article for FORBES saying, “Welcome to 2030: I own nothing, have no privacy and life has never been better…”, followed up with this worrying, dystopian, rhetoric regarding the status of human identity by 2030, “once in a while I get annoyed about the fact that I have no real privacy. Nowhere can I go and not be registered. I know that, somewhere everything I do, think and dream of is recorded. I just hope that nobody will use it against me.” This article was written by Ida Auken who is a Danish politician, a member of The WEF and a writing contributor for FORBES.
The second pillar of the ‘Great Reset’ agenda is ‘finance’. This translates to more control over money, assets, and property by the government. So, again referencing the Forbes article by Ida Auken – “Welcome to the year 2030. Welcome to my city – or should I say. ‘our city’. I don’t own anything. I don’t own a car. I don’t own a house. I don’t own any appliances or clothes. We will live in a sharing economy. Items like clothing, and cooking equipment, will be rented to you via your GOVERNMENT when you need them, but, according to a WEF member, sometimes you won’t even decide what you need because an ALGORITHM that knows your tastes, wants, and desires better than you do could make these choices for you instead. The most important asset that we have to exchange value is MONEY. The WEF wants to replace physical cash with digital money. We should all be switching to electronic/digital money and payment systems even though most developing countries still prefer to use cash. For example, in Indonesia a majority of transactions between small holder producers and buyers are still carried out with cash payments, Klaus Schwab does not agree – “A cashless society – along with the transformation of the last mile of money transfers, payments, and banking services – will help to replace the old fiat money system is to adopt Central Bank Digital Currencies (CBDC’s).” These CBDC’s operate exactly the same as crypto currencies EXCEPT that they are centralised and not de-centralised. So, all the control and power remain with the central banks and governments. CBDC’s are fully trackable, traceable, and transparent. With CBDC’s your money would not be held in a bank account, it would live on a blockchain controlled by your government. With blockchain technology, we have smart contracts that allow the advent of programmable, digital money. Potentially, you can be restricted where you spend and what you spend on! The next logical step for further control is digital money which has an expiration date, for example, you have 30, 60, or 90 days to spend 25%, 50%, or all of your savings when your government needs to stimulate economic growth by forcing you to spend your hard-earned savings.
3. Social Scoring
The third pillar of the ‘Great Reset’ agenda is social scoring – basically ranking human beings against each other – remember the Chinese social credit system! Rewarding citizens who behave in line with government guidelines and punishing citizens who don’t. China already has the world’s most restrictive social credit scoring system where citizens are ranked by everything they do in their day-to-day lives. People can be punished if they drive badly, buy too many video games, or steal. China’s social credit system ranks citizens and punishes them with throttled internet speeds, train and flight bans if the Communist Party deems them ‘untrustworthy’. Other potential punishable offences include spending too much time playing video games, wasting money on frivolous purchases, and negative social media posts! If your score is too low, you can have your access restricted to obtaining or using your passport, denial of bank loans, and even having your loving pet dog taken away from you! (The eastern Chinese city of Jinan started enforcing a social credit system for dog owners in 2017, whereby pet owners get points deducted if the dog is walked without a leash or causes public disturbances.) Our man from the WEF, Klaus Schwab advocates the social credit system and even gave China’s president Xi Jinping a glowing introduction at a recent WEF event. Schwab praised the president’s leadership and his nation’s economic achievements. You can hear the protestations from the developed western, capitalist nations proclaiming that this only applies to communist regimes and authoritarian countries, but ALAS –
Italy could become the first EU nation with a social credit scoring system by the end of the year according to an article from the ‘Corriere di Bologna’ publication. The municipal government is introducing a ‘Smart Citizen Wallet’ that can receive digital points based on whether a citizen has demonstrated ‘virtuous behaviour’! (The Australian city of Darwin is proposing a similar scheme.)
These practices, if poorly developed or used, can also lead to serious limitations and violations of citizens’ rights and freedoms, as well as discriminatory practices by our governments.
The dangers of this model have been underlined by the European Union, which in a recent proposal for regulation on Artificial Intelligence (AI Act) has taken these issues into consideration. The concern is increased by the fact that similar systems have already been introduced in other Italian cities as well; first of all in Rome, where the Smart Citizen Wallet is already being tested!
Some believe this is an extremist viewpoint and that the benefits of the ‘Great Reset’ with digital identity and digital currencies are the only way forward for a ‘New World Order’ to end global homelessness and hunger. We will delve into the WEF’s rhetoric in Part 2 of this article – coming from the Digital Zeitgeist very soon
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