In their most basic form, LSCSs operate by assigning people to blacklists for certain “bad” behaviors (anything from littering and spreading disinformation online to more serious criminal activity) and “redlisting” people for “good” behavior (such as volunteering and displays of patriotism). Appearing on a blacklist can carry a variety of punishments, such as preventing air and train travel, and redlists can grant a person benefits, such as easier access to loans and not having to provide damage deposits for hotel stays. There is a system of joint rewards and punishments that allows redlist and blacklist data to be shared across government departments (Zhang 2020, 572). The Supreme People’s Court (SPC) has also implemented a nationwide “Defaulters’ List” for people who default on their court judgements (Chen, Lin, and Liu 2018, 16). This expansive system of rewards and punishments is alarming to many in the West, and critics of the SCS have cataloged numerous aspects that present legitimate concerns.

The proliferation of data- and information-driven apparatuses and widespread monitoring of online activity present threats to citizens’ privacy. Criminology and justice scholar Claire Lee’s (2019, 964) analysis of dataveillance in the SCS project stresses that the SCS is a serious breach of privacy, and her interviews reveal that some participants are aware that “the social credit system gives them no privacy at all.” Additionally, the public naming and shaming of blacklisted individuals reveals private information to the public. Some scholars warn that this use of reputation and surveillance will cause the entire society to practice self-censorship (Chen, Lin, and Liu 2018, 4; Lee 2019, 965). This has elicited comparisons to Foucault’s writings on Bentham’s notion of the Panopticon—a prison designed so a single guard could observe all prisoners at once, but the prisoners would never know whether they were being observed. Foucault (1995, 201) argued that the possibility of constant surveillance would cause prisoners to change their actions to conform to the state’s expectations. Lee (2019, 966), among others (Zhang 2020, 570), has suggested that this is the intended effect of the SCS, “wherein a state’s social control tactic has translated into citizens’ own practice of self-surveillance.”

Some LSCS punishments have the potential to create additional problems beyond the wrongdoing they seek to address and even exacerbate problems they are trying to solve. Xiaodong Ding and Dale Zhong (2020, 10) argue that if a “bad reputation in one area would endanger one’s credibility in other areas,” the punishment would violate legal principles because it is an “improper connection.” They raise a hypothetical example of an employer denying a job to someone with a low score because of traffic violations, which does little to address the traffic violations and may lead to the individual not being able to pay back a loan (9–10). Similarly, if the initial wrongdoing was failure to pay back a court-assigned fine and the responsible individual loses their job, it only makes it more difficult for them to pay back that initial fine. Dean Curran and Alan Smart (2021, 500) argue that the SCS is not designed to help “urban outcasts” but to impose additional means of control.

The SCS also suffers from a variety of systematic deficiencies. For those placed on blacklists, there are few means for seeking redress because each government agency runs their own redlist and blacklist system (Chen, Lin, and Liu 2018, 33). There is also significant risk of human bias and error, as most LSCS data are input manually (Kostka and Antoine 2019, 263). Although government systems do not use algorithms to automatically update social credit information, the rapid development of AI and extensive data collection in China makes the possibility worth considering. Furthermore, the fragmented nature of the SCS means that depending on what values each locality prioritizes, a person’s social credit score may differ significantly from place to place. Data breaches present another risk to users, as many of the government’s websites are under-protected due to its own desire for online surveillance (Weber 2020). A significant breach could undermine user trust in the system.

In sum, the SCS does present legitimate concerns, in both the punishments that it inflicts and weaknesses in the way the system operates. These concerns should be taken seriously, especially as the system continues to change and evolve.

The development of the SCS is characterized by changing priorities, evidence that Chinese leadership is tolerant of the SCS evolving organically. Initial ideas for the SCS were focused on financial credit, largely due to the lack of a developed credit market in China (Min 2020, 94). Chinese banks lacked a reliable way to evaluate the creditworthiness of potential borrowers, which is vital for a high-functioning market economy. Premier Zhu Rongji launched a project with the Chinese Academy of Social Sciences to establish a national credit system in 1999, which was the basis from which Jiang Zemin would propose the creation of a social credit system in 2002 (Knight 2018, 238). As initially conceived, the system sought to assess financial risk in a way similar to Western credit scores like the FICO score.

In subsequent years, the focus of the SCS shifted from ratings based solely on financial considerations to a broader range of social behaviors that reinforced a nascent revival of “socialist morality.” The SCS became a way to help promote trustworthiness, honesty, integrity, and sincerity (Zhang 2020, 571). The Sixth Plenum of the 17th Party Congress established four areas of interest: government, commerce, judiciary, and society (Knight 2018, 239). These areas of interest would become the basis for the 2014 Planning Outline, which established the guidelines for the current LSCS pilots. The factors in the new conception of social credit included financial creditworthiness, judicial credibility, and social behavior with the intention of making “honesty and trustworthiness the entire population’s conscientious behavioral norm” (State Council 2015a).

The 2014 Planning Outline established guidelines for the SCS and called for cities across the country to create pilot systems. The plan encouraged experimentation at local levels with the hope of creating a nationwide SCS by 2020. Five years later, there is still no unified system, although the National Development Reform Commission (NDRC) introduced an eighteen-digit unified code in 2015 to enable interdepartmental sharing of information (Drinhausen and Brussee 2021, 9). Additionally, a public website, Credit China, was launched in 2015 as a repository of all social credit legislation, blacklists, and industry information (Knight 2018, 241). In December 2020, first drafts of plans for a comprehensive Social Credit Law were released. Recent documents from the State Council suggest yet another shift in the SCS. Katja Drinhausen and Vincent Brussee (2021, 17) report that the state is attempting to limit the scope of the system, as “central authorities have banned punishments for low scores and minor offences.”

That the system began as a fragmented conglomeration of locally run systems betrays a degree of state ambivalence toward the system. As Drinhausen and John Lee (2021, 7) note, “the system is in many ways less coherent than top-level government blueprints demand.” Chinese leadership has given relatively free rein to localities to create their systems within the guidelines of the 2014 Planning Outline. The laxity from the central government could suggest a lack of clarity in their specific goals concerning the program. Alternatively, it is possible the SCS remains fragmented because the fragmented structure provides certain benefits, like a rapid adaptability that the state found useful during the Covid-19 pandemic (Knight and Creemers 2021, 22). Either way, there is little to indicate that the state is in a hurry to implement the system nationwide.

The government has also allowed eight private companies to develop their own SCSs. These commercial systems are entirely voluntary and operate like traditional Western credit scores. Commercial SCSs are not allowed to blacklist users and tend to operate like loyalty rewards programs (Creemers 2018a, 13). According to Gladys Chong (2019, 295), good scores in commercial systems can get one in fast-track security lanes at airports, easier access to visas, higher credit card limits, and deposit waivers on a variety of rentals. The most popular systems are Sesame (or Zhima) Credit, run by Ant Financial Services Group, and Tencent Credit, run by Tencent Holdings. These systems operate under the authority of the People’s Bank of China and the NDRC. Regulators at first “refused to transform the initial temporary permissions granted to” these commercial systems into permanent liscences due to concerns about conflicts of interest and their ability to assign comprehensive scores (Kostka 2019, 1568). These companies keep their process for calculating scores secret, but they do give some sense of what is included in people’s scores. For example, Sesame Credit states that its score is based on five criteria: credit history, user behavior, ability to pay off debts, stable personal assets, personal information, and social relationships (Kostka and Antoine 2019, 6).

The ambiguity surrounding the development of the SCS and the failure to nationalize the SCS indicates that it is not a crucial tool of central control for Chinese leadership. It is likely that the state has found a fragmented system advantageous. But the lack of clarity concerning the operation of the SCS reinforces the argument that the SCS is not a vital organ of state governance.

If we resist the temptation to excoriate the SCS as an extension of the state’s goal to control and repress its citizens, the question becomes exactly how to categorize or understand the system. The State Council stated that the SCS was created with the intention of “strengthening the establishment of creditworthiness in government affairs, commercial creditworthiness, social creditworthiness and judicial credibility” and is hoped to “strengthen social sincerity, and stimulate mutual trust in society” (State Council 2015b). The SCS does appear to be a genuine attempt to accomplish these goals. High levels of public approval indicate that it is addressing real problems, and the relatively minor use of punishments in many LSCSs make it clear that they are not designed to be primarily repressive mechanisms.

Many analyses of the SCS note a perceived “crisis of trust” that has engulfed Chinese society. Government corruption is a persistent issue. In a 2015 Pew Research poll, corruption was the number-one concern of the Chinese population (Wike and Parker 2015). Furthermore, the abundance of counterfeit products that are created in China leave many skeptical of the market. Botsman (2017, 157) describes one baby food manufacturer that was intentionally adding melamine to its baby formula to meet protein regulations. Beyond issues of government corruption and company scandals, trust among citizens is low; Evan Osnos (2014, 295–96) recounts a particularly tragic event in which a young girl was run over by a van, and numerous bystanders passed by her, doing nothing to help. The SCS is designed to help rebuild the trust that has waned because of cases like these.

The origin of this trust crisis is difficult to determine, though many theories point to the rapidly increasing marketization of the economy and a growing consumerist culture. The reform era abruptly ushered in a period of increased capitalism followed by an increasingly consumerist society. This economic shift led to a cultural shift that favored economic and social individualism (Knight 2018, 246). Rapid economic development led to “insufficient supervision of market actors,” which allowed for corruption, food safety violation, and counterfeiting. Other scholars propose alternative explanations: one theory posits that the trust deficit is the result of long-term effects from the Great Leap Forward and the Cultural Revolution (Strittmatter 2020, 216). These traumatic events turned neighbors and families against each other and eroded trust in government (Thaxton 2008, 231). Botsman (2017, 33) suggests that this kind of trauma can seriously erode trust in institutions, even across generations.

Trust has been a central concern in the government’s conception of the SCS and in the marketing of commercial systems. The 2014 Planning Outline states that a fundamental goal of the SCS is to “form an environment across all society in which trustworthiness is honored and untrustworthiness is shameful” (State Council 2015a). Scholars have noted that the Chinese state recognizes that trust is crucial for an effective market economy, the success of which is important for maintaining the state’s legitimacy (Chen, Lin, and Liu 2018, 8–9; Creemers 2018b, 6–7; Xin 2018, 47). Commercial systems also appeal to desires for trust, as seen in the slogans for Sesame Credit, including “Trust makes it simple” and “Alipay knows what trust is!” (Chong 2019, 296).

Such an intense focus on trust raises the question of what is meant by “trust.” It is possible that the CCP intends to impose a system of control aimed at producing docile citizens through the SCS. “Trust” could thus be employed ambiguously as a convenient governance tool for the power-holders (Chen, Lin, and Liu 2018, 6). Chen, Lin, and Liu (2018, 35) see the Party as attempting to create a “rule of trust” to legitimate even greater CCP authority over the lives of the Chinese people. Though it is difficult to measure empirically, the trust deficit is very real to the average citizen. Simina Mistreanu (2018) reported in Foreign Policy that one man was amazed that his LSCS got drivers to stop at crosswalks, something he said had never happened before (2018). The SCS has been received with a remarkably high level of approval. Genia Kostka’s (2019, 1575) research found that nearly 50% of survey participants were strongly in favor of a nationwide SCS, and only 1% of participants were against a nationwide SCS. She also recognizes the real possibility of preference falsification, which makes studies on popular opinion in authoritarian states, particularly of government programs, challenging (1573).

Despite the intense focus on the punishments administered by the SCS in English-language reporting, evidence suggests that the use of blacklists is not nearly as prolific as it is presented. In the model city of Rongcheng, 90% of SCS participants are rated as “A” citizens (on a scale from D to A+++), suggesting that the system is more focused on promoting good behavior than punishing bad behavior (Mistreanu 2018). Drinhausen and Brussee (2021, 10) report that only about 0.15% to 0.3% of the population is subjected to social-credit-related sanctions. Additionally, they suggest that individuals might not be the primary focus of the SCS, as they receive only a small number of mentions in official documents relative to companies and corporations (8). Jeremy Daum (2019) even suggests that people in places with point-system SCSs “seem to be able to ignore them entirely without consequence.”

It is well known that the Chinese government employs authoritarian mechanisms to maintain power, but the SCS is not among them. The government recently passed the Cybersecurity Law and the Hong Kong National Security Law, which are laden with ambiguity to extend “legitimate” government power. There have also been efforts to repress online dissidents through the Golden Shield Project and the Great Firewall, which have been bolstered since the release of Document No. 9 in 2013, which identified concepts such as “civil society and a free press” as threats to CCP rule (Wang 2020). A massive surveillance system continues to grow as the SkyNet and Sharp Eyes projects have pushed for surveillance cameras to monitor all public spaces in China by 2021, though it is unlikely that they have achieved that goal (Gershgorn 2021). The Chinese government has constructed large “detention structures” in Xinjiang (Human Rights Watch, n.d.) and has implemented a campaign to collect the DNA of Uighurs (Human Rights Watch 2017). The SCS is often mistakenly conflated with these authoritarian systems. But many LSCSs are voluntary, and, as Daum (2019) notes, SCS punishments are often quite mild.

Data concerning redlists and blacklists indicate that the system is not designed for the repression of citizens. Rather, the SCS addresses real social and economic problems by aligning incentives for people with the government’s desires. The system is likely intended to increase the legitimacy of the regime, but it is doing so by attempting to improve people’s lives and addressing the trust crisis that pervades Chinese society.

The SCS is paradigmatic of a broader trend to use “smart governance” to bolster CCP legitimacy. Chinese leadership sees the integration of technology into governance as critical to the success of the regime. The state is strategically using consumerist incentives to achieve CCP policies by aligning the desires of individuals with the CCP’s desire to create self-policing citizens. Redlisting creates rewards and incentives, which helps contribute to a more positive image of the government (Chong 2019, 298). Though it varies from municipality to municipality, in many cases, redlists are utilized much more than blacklists, and this was particularly the case during the pandemic (Knight and Creemers 2021, 13). It is increasingly common that people trade privacy for the benefits of living within “the data-driven, contemporary society” (Chen, Lin, and Liu 2018, 32). Some refer to this practice of appealing to materialist desires to advance centrally planned goals as “Leninist neoliberalism” (Greenhalgh 2010, 38).

CCP leadership sees technology and data as tools for making governance more efficient and effective, which is crucial for maintaining legitimacy and power. Information technology has been emphasized as a major priority for the CCP. The State Council gave the Cyberspace Administration of China full responsibility for all online content governance, reflecting “a broader trend to locate more authority within Party bodies, rather than state bodies” (Creemers 2015, 8). To keep people from losing faith in the government over such issues as an inability to provide resources and services, in cities such as Wuhan, algorithms, data, and technology have been introduced into a wide variety of daily city functions, like “using digital technology … to improve the efficiency of public services and infrastructure, update the administration of healthcare, or rationalize the allocation of parking spaces” (Cowley et al. 2018, 58). Technology is also being incorporated into courts. Zhou Qiang, the standing president of the SPC, has made the implementation of “smart courts” one of his key priorities, a plan which will implement e-filing for cases, trials hosted online, the uploading of court recordings, and providing like-cases search mechanisms (Cousineau 2021).

The SCS is part of a larger trend in Chinese governance to employ technology in pursuit of increasing the efficiency of the government. By providing services more effectively and giving incentives to its citizens, the government is seeking to strengthen its legitimacy. The pronounced popularity of the SCS indicate that these efforts are effective.

The SCS, as it exists today, is an effort by Chinese leadership to promote social trust to maintain legitimacy. However, rather than being a crucial component of the Chinese state’s authoritarian control of its people, it neither a particularly important aspect of Chinese state governance nor particularly repressive. The system remains fragmented, and there is little to indicate that nationalization is imminent. LSCSs do present a myriad of concerns that deserve serious attention, but concerns that overly ambitious local governments might jeopardize the system’s legitimacy have prompted governing bodies to delineate clearer boundaries for the system (Drinhausen and Brussee 2021, 6; Knight and Creemers 2021, 22). The fact that Chinese citizens tend to appreciate the SCS suggest that it is solving a real problem in Chinese society. In an article by journalist Simina Mistreanu (2018), Rogier Creemers says the system does aid in “maintaining the integrity and stability of the political regime,” but “it is also the case that it tries to do so by addressing legitimate concerns.”

The analysis in this paper facilitates more faithful and accurate dialogue about the SCS. In 2018, former vice president Mike Pence spoke about the SCS in Orwellian terms, making it clear how important such dialogue is for constructing well-informed foreign policy. Furthermore, a more accurate view of the SCS will help scholars and NGOs set priorities around the SCS more appropriately and focus on potentially more pressing topics.