Blacklisted In China : Planet Money China is trying a bold experiment to help people trust each other more: The social credit score. Will it work? Does it go too far?

Blacklisted In China

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Xu Ranjan (ph) is an IT engineer. He's 32 years old.


And he lives in Rongcheng, China. It is a city of around 700,000 people on the east coast of China. And he says it is a really nice community. But like any city, it has its issues. The traffic, for instance, has always been totally crazy.

XU RANJAN: (Through interpreter) Because the cars would not give way to pedestrians. And sometimes, when they saw people crossing, then they would brake all of a sudden and cause a lot of...

VANEK SMITH: Fender benders.

XU: (Through interpreter) ...Accidents.

ECHO WANG, BYLINE: Exactly. For example, the car behind would bump onto the car in front of them.

VANEK SMITH: Oh, the fender bender.

GARCIA: Yeah. We spoke with Ranjan through our producer, Echo Wang.

VANEK SMITH: Ranjan says being a pedestrian was just terrifying. You basically just had to hurl yourself across the street when you saw a break in traffic and, you know, hope for the best.

XU: (Through interpreter) But now, after the changes have happened, the cars - they will wait for you.

GARCIA: The changes that have happened have to do with the implementation of a new policy in China called the social credit score. Cities like Rongcheng are testing out a version of this system, and the plan is it'll be in place all across the country by the year 2020.

VANEK SMITH: The social credit score is similar to the credit score we have here in the U.S. And the idea behind both is this. In a big, complex economy, you have to do business with strangers. And you want some way to know whether or not you can trust them, whether they're going to pay back a loan, whether they'll be a good tenant if you rent them an apartment, whether the Advil they're selling you is, you know, Advil.

GARCIA: And not Imodium, say.

VANEK SMITH: (Laughter).

GARCIA: China does not...

VANEK SMITH: That would be rough.


VANEK SMITH: That would be super rough.

GARCIA: China does not have a traditional credit score. And this has been causing some problems, like people not paying back loans and not really seeing any consequences of not paying back loans. But just imposing a credit score system was tricky because here's the thing. Many Chinese citizens just don't have a credit history, and a lot of Chinese citizens don't even have bank accounts.

VANEK SMITH: So when China set out to make their trust score, they kind of leapfrogged over the credit score and came up with something broader and more sweeping. The Chinese social credit score will measure things like whether or not you've paid back your loans, but it also includes behavior like how you act at work or whether you obey traffic laws.

XU: (Through interpreter) If you're not giving way to people who are crossing the traffic light, your points would get deducted.

GARCIA: Forget the annoyance of a fender bender. If you don't yield to pedestrians in Rongcheng these days, you might not be able to take out a home loan or get a good seat on the train.

VANEK SMITH: And if your social credit score is low or if you're one of the people who doesn't pay back a debt ordered by the court, you could end up on something called the list of untrustworthy people or the blacklist. Right now the blacklist is in effect nationwide.

GARCIA: And people on the blacklist can't get a credit card. They can't take out a loan or open a bank account.

VANEK SMITH: Not to mention a whole other raft of restrictions and humiliations. For instance, in some parts of China, if you're on the blacklist and someone calls your phone, they will hear this.


UNIDENTIFIED PERSON: (Foreign language spoken).

GARCIA: That is a recording basically saying warning, this person is on the blacklist. Be careful in your dealings with them, and please urge them to pay back their debts.


GARCIA: Hello, welcome to PLANET MONEY. I'm Cardiff Garcia.

VANEK SMITH: And I'm Stacey Vanek Smith. We are the hosts of PLANET MONEY's daily podcast The Indicator. And we've been doing a lot of reporting on The Indicator about China's social credit system.

GARCIA: Yeah, China is building a giant system to measure how trustworthy its citizens are. This system will reach into almost every part of daily life.

VANEK SMITH: It will determine things like who can get a loan, who can leave the country, who can take an airplane.

GARCIA: The idea of someone tracking our data and using it to make judgments about us - that's nothing new. We know that companies do it. We know that governments do it. But China's social credit system will take all of that to a whole new level. It is changing how people shop, how they socialize, how they behave in traffic and even what it means to be an individual.


GARCIA: Rachel Botsman teaches trust and technology and is the author of "Who Can You Trust?" As she was researching China's social credit system and trying to consider the broader implications, her mind kept going back to this one place.

RACHEL BOTSMAN: I don't know if you've ever seen that episode of "Black Mirror" that everyone talks about called "Nosedive" which is just an amazing piece of television.


UNIDENTIFIED ACTOR: (As character) Hey, Lacie.

BRYCE DALLAS HOWARD: (As Lacie Pound) Keith (ph).

VANEK SMITH: "Black Mirror" is a show on Netflix, kind of a dystopian sci-fi show. In this episode called "Nosedive," everyone has a smartphone with them all the time. And they're rating everyone around them constantly. Every interaction, people are being evaluated on how they act.


HOWARD: (As Lacie Pound) I'm five-starring you - five stars.

GARCIA: Five stars, Stacey, for you all the time.

VANEK SMITH: Five stars for you all the time, too, Cardiff.

GARCIA: In the episode, every one of these interactions contributes to your overall score. And people can see your score on their phones as you walk around in the world. And that score determines all kinds of things.


MICHAELA COEL: (As airport stewardess) That's reserved for members of our prime flight program. You got to be a 4.2 or over to qualify.

ALICE EVE: (As Naomi Jayne Blestow) Don't come. I don't want you here. I don't know what is up with you, but I cannot have a 2.6 at my wedding.

VANEK SMITH: Can't have a 2.6 at your wedding - wedding's over (laughter).

GARCIA: Brutal.

VANEK SMITH: Of course Rachel emphasizes that this is fiction. But she says the show makes some really smart points about a system where people have a kind of centralized rating system and kind of live and die by it.

GARCIA: Now, we are familiar with a centralized rating system - the credit score. But how do you build a system like this in a country where a lot of people just don't have much of a credit history?

VANEK SMITH: Well, you can find records of people's behavior in other areas and extrapolate trustworthiness from that. And, you know, Cardiff, who has lots and lots and lots of data on how people behave? Big companies of course.

GARCIA: Yeah, big companies.

VANEK SMITH: Small companies, all the company - companies.

GARCIA: Yeah. And in China, the big companies are really big. Alibaba is like China's version of Amazon. It has more than 500 million customers. That is tons of data on what these customers buy. And Alibaba also owns one of the largest online payment systems in the country and has its own credit scoring system called Sesame Credit. Alibaba knows a lot about how people spend and borrow and how much money they likely have. So do other private firms, and the government is partnered with some of them to share data, data that a number of China watchers believe will be used to formulate people's credit scores. Though as Rachel says, it's unclear how much data or what data Alibaba and other Chinese companies are sharing with the government or how the data is getting used.

BOTSMAN: The way people are scored - it is not simply whether they miss a bill. It could be what they buy online. It could be...

VANEK SMITH: Like, if you buy, like, a low-cut dress (laughter) or something?

BOTSMAN: Well, it's not far from that. I mean, I think the example that the head of Sesame Credit - the example she publicly gave the press was, you know, if you buy nappies, you're responsible, so your score will go up. But if you're buying video games, you're lazy, so your score will go down.



VANEK SMITH: It sounds so much nicer than diapers.

GARCIA: Of course it does.

VANEK SMITH: Doesn't it?

GARCIA: Of course this data collection and the weird assumptions that companies make based on our actions does happen in the U.S. and everywhere else. Rachel says what's different China is how severe and comprehensive the consequences can be. We reached out to the Chinese government, by the way, but they did not respond to requests for comment.

VANEK SMITH: But the social credit score will not be all about what you buy. The government is also collecting data of its own, and that data will factor into people's social credit scores, too.

GARCIA: And we got a glimpse into how this might work because pilot cities around China have already been testing out their versions of the system. One of those cities is Rongcheng, where our IT engineer Xu Ranjan lives. And he says the data about him has all been bundled together into a single score.

VANEK SMITH: So in this system, everyone starts out with a score of a thousand.

XU: (Through interpreter) My score is full score. So it's 1,000.

GARCIA: So he's still got a thousand. By the way, you can get more than a thousand points...

VANEK SMITH: That's true.

GARCIA: ...Too. Yeah.

VANEK SMITH: Thousand-plus.

GARCIA: And there's a whole letter grade system behind the points. So from 960 to 1,000-plus points is an A. Eight hundred and fifty to 959 points is a B.

VANEK SMITH: Eight forty-nine to 600 is a C. And this is considered a warning level. Below that, you are a D. You're labeled an untrustworthy citizen. And life gets really hard. You can gain or lose points for all kinds of reasons. Get a DUI - that is an automatic downgrade to a B.

GARCIA: Get into a spat with your neighbors - minus 10 points.

VANEK SMITH: Give to charity - ding-ding-ding-ding (ph), plus five points.

GARCIA: And if you spread rumors online, minus 50 points.

VANEK SMITH: Forget to clean up after your pet - minus 10 points.

GARCIA: To keep track of all this, neighborhoods have designated watchers, people who keep track of neighbors' behavior and update people's scores.

VANEK SMITH: Oh, my God, it's like the hall monitors that they used to have in grade school except now they're...

GARCIA: Yeah, nobody likes those guys.

VANEK SMITH: Now they actually have real power.


VANEK SMITH: And it is real power because if you have a really high score, you get discounts at a bunch of local businesses. Your heating bill goes down. You get some cable channels for free, including a soap opera channel and a kung fu channel. You also get special invitations to community events.

GARCIA: If your score is low, life gets pretty hard. No invites, no free kung fu channel. Also you might not be able to get a promotion at work, even if you've been doing a great job. You just won't be eligible.

VANEK SMITH: And all this is sort of mind blowing and even kind of amusing to hear about. But there are some very real consequences to this system. And one person who has experienced them firsthand is a man named Lao Dwan (ph). He's 42, and he asked us not to use his full name because he could get in trouble with the government for talking to the media. Now, Lao Dwan used to work in the coal industry, but a few years ago, the price of coal in China plummeted.

LAO DWAN: (Through interpreter) That's how I went bankrupt. That's how my cash flow got cut off. Because the money was just gone, into smoke.

GARCIA: Lao Dwan would buy tons of coal from coal mines and sell it to energy plants that needed it. But then the Chinese government changed its energy policy, and so the price of coal tanked and Lao Dwan was left with warehouses full of coal that he could no longer sell.

VANEK SMITH: Lao Dwan found himself in terrible debt. He owed various creditors $1.5 million. And one of them took him to court. Lao Dwan told the judge, I just don't have this money, I can't pay back these loans. But the court disagreed and put him on China's dreaded blacklist.

GARCIA: Now, bankruptcy does not exist in China in the same way that it does in the U.S., and Lao Dwan wasn't really sure what being on the blacklist meant. He just knew that he wanted to get back on his feet and get a new business going to pay off those debts. The coal business was dead, but Lao Dwan had been very successful and he still had good contacts. And he decided that he would go to Beijing, hit up some of those contacts and figure out a new plan.

VANEK SMITH: So Lao Dwan went online to book a train ticket. It was a high-speed train to Beijing. He put in his name and his payment. And right away, this page popped up saying he couldn't complete the purchase.

LAO DWAN: (Through interpreter) And it says that this person is on the untrustworthy list from the court.

VANEK SMITH: Lao Dwan was confused. Why couldn't he book this train ticket? He started looking into the situation.

GARCIA: The blacklist. The blacklist had been rolled out before the full social credit score system, but it will be part of that system. It started about five years ago, and it has involved cracking down on debtors and creating consequences for people who do not pay back their loans.

VANEK SMITH: And, Lao Dwan discovered, one of those consequences was that he could not book a high-speed train ticket.

LAO DWAN: (Through interpreter) One thing that comes along with the blacklist, the untrustworthy list, is that you are barred from high-end consumption, which means that you can't take a speed train, you can't fly.

GARCIA: Flying to Beijing, Lao Dwan says, takes 90 minutes. But that's considered luxury travel so he couldn't do that. He would end up instead taking the slow train to Beijing, which is 14 hours.

VANEK SMITH: And Lao Dwan was blocked from booking a lot of hotel rooms in Beijing because that was considered a luxury expenditure. Trying to start this new business began to feel impossible.

LAO DWAN: (Through interpreter) The way to a new business has been already blocked.

VANEK SMITH: And when Lao Dwan went to his bank, he found that all of his accounts and cards had been frozen.

GARCIA: One morning, when Lao Dwan was driving through the center of town, he discovered another aspect of being on the untrustworthy list. On one of the electronic billboards by the side of the road was his face.

VANEK SMITH: Just, like, up on a big billboard?

LAO DWAN: (Through interpreter) It's a big, electric screen by the side of a big plaza. There are, like, huge screens, and they are very eye-catching. You can really see them from afar. And I saw my pictures on that screen. Picture from my ID card, and my ID card number and my name.

VANEK SMITH: The billboard said, this man is untrustworthy. Lao Dwan says these billboards are all over town.

GARCIA: Lao Dwan says he started to feel self-conscious about it all the time. It became really hard to go out.

LAO DWAN: (Through interpreter) Ever since then I actually passionately reduce my contact with the outside world, and also I try not to go to get-togethers with friends.

VANEK SMITH: Why do you do that? Why do you...

LAO DWAN: (Through interpreter) I feel - I'm afraid that people would look at you in a different way, and I don't feel confident anymore.

GARCIA: Lao Dwan says whenever he went out, whenever he'd see the billboard, he would just stop and watch it for a while, scrolling through the untrustworthies (ph), waiting to see if his face would come up. But one day when he was doing that, he saw the face of someone he knew.

LAO DWAN: (Through interpreter) Oh, my God. This person who used to be working in the same industry as I did are all now up there.

VANEK SMITH: These had been successful businesspeople, like Lao Dwan, and now they were in the same position he was. So he called some of them up, started arranging dinners where they could all meet up and talk. He says the other people on the blacklist are now the only people that he can really relax around.

LAO DWAN: (Through interpreter) Because actually, in the society, the widespread attitude towards us is very resistant. People will think, why are you here being happy? Why do you still have time to be happy? Why do you not go out and make money to pay back your loan?

GARCIA: So far, Lao Dwan says he has paid back about $300,000 of the $1.5 million that he originally owed. So still about $1.2 million to go.

VANEK SMITH: How long do you think it will take to pay off the rest?

LAO DWAN: (Through interpreter) It's hard to say. I think maybe over two years.

VANEK SMITH: But even when Lao Dwan does manage to pay off his debts, getting off the blacklist could be hard.

GARCIA: We talked to lawyers in China who deal with this. And by all accounts, getting off the blacklist, even if you've paid your debts, well, it's technically possible, but it just never seems to happen.

VANEK SMITH: We reached out to China's Supreme Court about this issue, but they didn't respond to requests for comment.

GARCIA: But Lao Dwan says he will keep paying off his debt. He has to believe there's a way off this list. Meanwhile, China is moving towards the full rollout of the social credit system, and by 2020, the system is meant to be in place all across the country.

VANEK SMITH: After the break, we try to understand what this all will mean for China's economy and for its citizens.


GARCIA: OK, Stacey. When we are trying to evaluate this social credit system that China is in the middle of rolling out, one thing we've talked about a lot is that it just feels kind of creepy.


GARCIA: Like, neighborhood watchers watching everybody's every move.

VANEK SMITH: Undeniably creepy. I mean, at least to us. But when we talked about this with Xu Ranjan, the 32-year-old IT engineer in Rongcheng, the pilot city, he told us, to him, the monitoring does not feel creepy.

GARCIA: In fact, he says that it's made people act better. Like, he used to be someone who did not stop for pedestrians when he was driving.

XU: (Through interpreter) Afterwards, I would feel, oh, I should not have done that.

VANEK SMITH: Now, Ranjan says, he always stops, and he just feels better about himself. In fact, he thinks the system is a kind of step in the evolution of societies and people living together, where the needs of the community are put ahead of the needs of the individual.

XU: (Through interpreter) There's one thing. A few people have become more friendly. I think in the history of human beings developing towards, like, communities, if everybody can follow the rules, I'm sure it's very good for, you know, every individual living in the city.

GARCIA: On the other hand, and one of the reasons that this system gives so many people a lot of pause, the Chinese government will almost certainly be using it to try and control its population even more than it already does to bolster its own power.

Remember, one way to lose a lot of points in your social credit score is to, quote, "spread rumors online."

VANEK SMITH: Most definitely. And, you know, the whole time that we've been working on this series, I kept thinking about this one little scene from the "Black Mirror" episode. And I know that it's fiction, but it really stuck with me, and I haven't been able to shake it. And it's the scene where the main character is practicing her laugh in the bathroom mirror, and she's trying really, really hard to seem happy and joyful so that people will like her and give her a high rating when they interact with her.


HOWARD: (As Lacie, laughing).

VANEK SMITH: I think the part of all this that I find the most troubling is that it makes emotions like anger, frustration, or even sadness into a liability. And it starts to kind of suck the authenticity out of human interactions and kind of punishes people for being human, for their own humanity.


HOWARD: (As Lacie, laughing).


VANEK SMITH: If you liked this episode, please check out our show, The Indicator, from PLANET MONEY, hosted by us.

GARCIA: Yeah. Me and you.

VANEK SMITH: It's 10 minutes or less, comes out every day. And you hear stories like this one or on the psychological impact of recessions, or sometimes lighter stuff, like why the price of Fritos is going up in the White House vending machine even though corn prices are going down. It was an interesting mystery to solve.

GARCIA: Oh, yeah. But we solved it.


GARCIA: The Indicator is produced by Constanza Gallardo, Echo Wang and Darius Rafieyan. We are edited by Paddy Hirsch. And today's PLANET MONEY episode - big shout out - was produced by Sally Helm. Also we actually want to emphasize Echo Wang's role in this.


GARCIA: She didn't just translate for us. She also did all of the original reporting about this story for us. We really appreciate it. She's an absolute star. Also a quick note. PLANET MONEY and The Indicator are both looking for interns.

VANEK SMITH: Yes, we are.

GARCIA: Yeah. It's a good job. It's paid. You get a lot of leeway to help shape things.

VANEK SMITH: Plus you get to hang out with us. What could be better than that?

GARCIA: I don't - let's not answer that question.

VANEK SMITH: (Laughter).

GARCIA: For more information, just go to our website,

VANEK SMITH: I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Thanks for listening.

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