This year marks the 20th anniversary of the social credit system. Its birthday provides a good opportunity to remind the world that it is more akin to a glorified online file system than the mass-surveillance system it is commonly (mis)represented as being. A policy umbrella rather than an integrated whole, its most important goal was to clamp down on malpractices in China’s market economy and improve trust among economic actors. Continuing a longstanding political tradition in China, the authorities framed these problems in moralistic terms, requiring a paternalistic response.

Fraud and other forms of misconduct made ‘the public extremely dissatisfied’, as then-premier Wen Jiabao noted in 2011. The social credit system was designed to take a two-pronged approach to tackle the issue. Its carrots and sticks became the system’s well-known instruments — rewarding those who faithfully abided by laws and regulations (recorded on so-called ‘red lists’) and penalising those behaving fraudulently (recorded on blacklists). These lists are still administered by humans and do not involve any intricate scoring.

The blacklists target a small portion of severe wrongdoers — but given the size of China’s population size, this involves millions of people. The Supreme People’s Court blacklist for people who fail to obey court orders includes nearly 7.2 million citizens as of March 2022. Up until 2019, this blacklist had barred people from buying plane tickets nearly 21 million times.

The National Development and Reform Commission, one of the agencies in charge of the social credit system, stated in 2019 that the system had ‘achieved remarkable results’ after ‘bad credit events’ were 22.7 per cent lower in 2018 than the previous year. The proportion of companies subject to penalties decreased from 1.31 per cent in 2018 to 1.1 per cent in 2019, proof in the eyes of the authorities that malpractice was declining. Major marketplace scandals — such as the adulterated milk scandal of 2008 — appeared a thing of the past to most Chinese.

These trends were equally the result of wider legal and regulatory reforms, but the social credit system came to enjoy public support in China all the same. During the COVID-19 pandemic, citizens using the social media platform Weibo overwhelmingly supported announcements about the blacklisting of people who had broken COVID-19 rules. Surveys have found that up to 80 per cent of citizens approve of the system. Even though this high approval rating is partly due to the state’s active propaganda, the social credit system enjoys a solid level of support.

The social credit system is used as a tool to help enforce all of China’s laws — including the more authoritarian ones. Local and regional authorities can also use it to achieve political objectives. Rules for blacklisting internet users for spreading ‘fake news’ were never formally passed, yet citizens have been sanctioned for online comments. The city of Anqing blacklisted two citizens for ‘spreading rumours’ about supposed COVID-19 cases in early 2020. Zhejiang province has rewarded companies for backing Chinese Communist Party causes like ‘common prosperity’.

Without a legal definition of ‘social credit’, there were very few limits on what type of behaviour could or could not be included under its umbrella. Some local and regional governments have used the social credit system to penalise citizens for minor infractions like incorrectly separating their garbage, eating on the subway or jaywalking. Others use it to enforce political control, for example, by banning citizens from ‘irregular petitioning’ in Beijing.

But this free rein has created headaches for China’s central leadership. It has occasionally drawn severe criticism from academics like Shen Kui, a professor at China’s Peking University, who called the social credit system chaotic, prone to abuse and a risk to human rights in 2019. Citizens have also expressed concerns about ‘disciplinary overkill’.

The system has grown fragmented, hindering the implementation of shared data systems and unified national regulation. The system’s key goals were outlined eight years ago in the 2014–2020 Planning Outline — but they remain unfulfilled to this day. Blacklists have proven easy to ‘game’ in favour of businesses.

Although the central government initially encouraged local authorities to experiment with the social credit system, it recently concluded such practices have gone too far. Since 2019, new regulations have restricted the use of scoring, outlawed the inclusion of certain behavioural information in the system, and clarified that ‘untrustworthiness’ primarily refers to noncompliance with formal laws, regulations and contractual obligations.

The social credit system’s third decade looks set to be a complicated one. The central government is finally trying to standardise norms and procedures, while leaving some room for local adaptation and recognising elements of the system that have been successful. Local authorities will try to continue using the system to achieve their own political goals. The future of the social credit system now faces a period of negotiation between a central government pushing standardisation and millions of cadres with local, or even personal, agendas.

Beijing’s headaches are unlikely to disappear anytime soon.

Vincent Brussee is an Analyst at the Mercator Institute for China Studies (MERICS) in Berlin.