Most countries use credit rating systems to evaluate an individual's financial history, but China intends to push this idea even further.
A 25-year-old woman surnamed Yin met her boyfriend on dating website Baihe.com. Yin claimed that she wasn't only fascinated by his "attractive profile pictures," but also by his "good credit rating."
The credit rating results of Baihe's users are provided by Sesame Credit, which uses the vast quantity of data Alibaba collects to assess the creditworthiness of users.
The system collects users' credit information from their assets and their daily behaviors such as lending, borrowing and paying for shopping or traveling bills.
Additional information such as charity activities are also a factor for the credit-assessment system.
Users of Sesame Credit will be given scores of between 350 and 950 based on their credit history. The higher the score, the better the credibility.
Lies everywhere
As mistrust is pervasive in China, the public and many scholars are demanding a comprehensive social credit system that includes financial and social misconduct and imposes harsher punishments, said experts.
A far-reaching credit system is urgently need in China as it will help to oversee the government, supervise companies and built trust among people, Qi Xingfa, a professor with the department of political science at East China Normal University, told the Global Times on Thursday.
China's State Council released an outline in 2014 which sketched plans for a system to assess individuals and government agencies in four areas, namely administrative affairs, commercial activities, social behavior and the judicial system, the Xinhua News Agency reported.
To this end the authorities have pledged to establish a set of laws and regulations to assess all of society, and a related reward and punishment mechanism by 2020.
According to news site caixin.com, Sesame Credit is at the pilot stage of cooperating with the government on this project, and both sides will eventually share a database.
Lian Weiliang, deputy head of the National Development and Reform Commission, said on November 1 that 4.9 million people have been prohibited by the courts from taking airplanes and 1.65 million cannot take trains due to defaulting on loan payments, the China News Service reported.
Travel bans are not harsh enough, said Qi, adding that even stricter punishments should be imposed.
Recently, a father who identified himself as Luo Er apologized publicly for the negative influences he caused after he touched hearts by seeking donations online to help treat his daughter reportedly suffering from leukemia but was later accused of fraud.
Luo garnered nationwide attention, but was soon plagued with controversy after social media users cast doubt about his motives, questioning his story and accusing him of working with a marketing company.
Privacy concerns
However, the government should pay attention to people's privacy when building the credit system, especially as technologies are more advanced now, Wang Zhenyu, a researcher with the China University of Political Science and Law, told the Global Times.
The website of China's Supreme People's Court began to publish the information of individuals and corporations who fail to carry out court orders in October 2013. These individuals and companies face difficulties if they want to participate in activities such as government procurement, tendering, bidding, and certification authentication.
In the Internet era, a defaulter's personal information could be revealed and misused, said Wang, adding that protecting all users' information should be a major concern when building a credit system.
While Qi claimed personal credit records are a small part of the whole system, "since the government is the main executer of the system, the building of the government's credit record should be the first and most important step," noted Qi.
He also suggested that the government build effective cooperation with local courts and public security bureaus to fully implement the system.
According to Wang, the government should also make the credit system transparent to the public. "It should make the standards for punishment clear and allow people to appeal if they are dissatisfied with the penalty," said Wang.
