Column: Risk Management

Opinion | China’s Social Credit System Has ‘Big Brother’ Watching

By: | August 30, 2018 • 2 min read

Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

In 1949, English author George Orwell published a distressing novel. The book is set in 1984. The world’s populace suffers under omnipresent government surveillance and manipulation. Independent thinking and individualism are prosecutable by the Thought Police. The Superstate ruler’s name was Big Brother.

Advertisement




Orwell’s writings to this day influence social and political culture. The term “Orwellian” implies higher control by surveillance, misinformation, propaganda, denial of facts and manipulation of history.

Orwell’s frightening vision of the future was only off on the date. What is happening today has a bone-chilling similarity to Orwell’s book.

Imagine a nationwide tracking system that rates the reputations and integrity of every one of its citizens, businesses and even government officials. Your rating is based on where you go, what car you drive, if you work out, who your friends are, how quickly you pay your bills, how you drive, what you eat, what you buy, what you read and how you treat others.

Imagine a government that actively collects all this data, processes it in a voodoo-like algorithm, then spits out a three-digit score between 350 and 950 that will dictate your social standing from that day forward.

If your rating stays high, you can get perks, privileges and incentives. You can get better seats on flights, better hotel rooms, no waiting for hospital rooms and your children get access to private schools.

Reportedly as of January 2018, all companies including nonprofits, NGOs, trade unions and social organizations with a Chinese business license were brought into the social credit system. Their business ID number is a “unified social credit code.”

This is not an Orwellian novel. This is the Social Credit System being developed by the Chinese government.

Every Chinese citizen and business is to be trailed by a file that aggregates assorted data from public and private sources. For the Chinese Communist Party, employing such a social credit scheme is an attempt at laxer and more invisible authoritarianism.

Advertisement




So why does this matter? This risk is not in our backyard. Simply put, if you do business with China, your business must conform to this scheme.

Reportedly as of January 2018, all companies including nonprofits, NGOs, trade unions and social organizations with a Chinese business license were brought into the social credit system. Their business ID number is a “unified social credit code.”

The government will keep track of all businesses, and report transgressions. Social credit risk assessments can be bought to guard against “shady” customers and suppliers based on their scores. Good businesses, those who abide by government demands, will get better loans and access to public tenders. The day has come where “Big Brother Is Watching You.” &

More from Risk & Insurance

More from Risk & Insurance

Risk Matrix: Presented by Liberty Mutual Insurance

10 Critical Risks Shaping the Energy Landscape Today

From traditional risks like safety and oil volatility to emerging exposures like climate change litigation, here are the top risks facing the sector today.
By: | March 1, 2019 • 2 min read

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




The R&I Editorial Team can be reached at [email protected]