Do You Know How Chinese Credit Score And Big Data Are Calculated?

Do you know how Chinese credit score and big data are calculated?

Internet access in China should be avoided at 2 a.m. and 4 a.m., do not visit websites that provide quick loans, and be careful not to change phones too frequently, because these choices may affect your credit score, and this score may affect many things one day.

When browsing the Internet, we must avoid surfing the Internet between 2 a.m. and 4 a.m., away from the websites that provide quick loans, and be careful not to change phones too frequently.

Another good experience is to order curtains for your office, while shopping online, choose diving equipment instead of photographic equipment.

What are the reasons? All these choices may affect your credit score.

Your credit rating will be determined by a number of experimental algorithms that are being tested by major Internet companies in China.

What this score may affect one day will far exceed your ability to obtain loans.

Some people think that it may determine your qualifications for health care, education, employment and good citizenship.

The new scoring system is part of an effort supported by the Chinese government to increase lending by billions of Chinese.

These Chinese want to get small business loans or consumer credit, but there is no history of collateral or financing.

To solve this problem, companies offering loans from corporate loans to retail credit are relying on "non-traditional" indicators such as Internet search history and mobile phone purchases to help determine who is reliable.

Many private enterprises admit that they can visit the records of Chinese Internet users with the permits issued by the Central Bank of China last year.

So far, China has issued 8 licenses to enterprises, including the two largest internet groups, Tencent (Tencent) and Alibaba (Alibaba), and one of the largest insurance companies in China, PingAn Insurance.

Such credit scoring is not only becoming a way to obtain loans, but also widely used in more and more non-financial activities.

A higher score allows you to take a fast track at airport security, get a foreign visa faster, and even help you adopt pets.

Another project of the Chinese government also intends to apply some algorithms to all these data as early as 2020, not only to assess citizens' credit reliability, but also to assess their overall "honesty" and "trustworthy degree".

So far, the Chinese government's efforts have basically remained at the theoretical level.

No one knows exactly what the new model will look like or what variables will be used.

An obscure outline of the plan indicates that its intention is "reward and punishment mechanism based on trustworthiness encouragement and dishonesty", and claims that its goal is to raise the "integrity consciousness and credit level of the whole society".

Wang Zhicheng, a professor specializing in credit risk research at Guanghua School of Management (Guanghua School ofManagement) of Peking University (Peking University), said the project was born in today's "moral crisis" in China.

He said: "people do not believe that credit or honesty is important.

This is the intention of this (more comprehensive) system to raise the cost of immoral behavior.

However, he said that marking people based on big data may not be easy. China's Internet is full of forged data, profiles and pactions.

"There is still a long way to go for China to score for everyone.

If China wants to do so, it is necessary to improve the accuracy of these data.

The current situation is "getting in is garbage and garbage is coming out."

Laboratory mice

Critics say China's Internet is rapidly becoming a laboratory.

Here, big data comes to "big brother": the combination of technological progress and interest driven private enterprises, authoritarian politics and weak civil liberties is giving birth to a toxic combination.

Some people say that if there is no checks and balances, the "social credit" system may be used to score "performance" for every citizen according to the "patriotic" standard, such as whether to purchase imported products or post social media posts.

Yang Sian, director of J Capital Research, Beijing, said that the system seemed to aim at achieving an important goal set forth by China's president Xi Jinping: strengthening social control and promoting public morality.

In a research report, she claimed that the goal of the "social credit" rating was to restart the kind of personal surveillance that was common in China between 50s and 70s.

At that time, under the Mao Zedong system, everyone had files maintained by the work unit, and every neighborhood had good people constantly reporting details of daily life to the relevant departments.

Higher mobility and decentralization mean that China's "archives" system is no longer the complete record from cradle to grave in the past.

However, the big data collected by Chinese Internet users by major Internet groups may be a very close substitute.

According to the latest estimates from the government last year, the number of Internet users in China reached 668 million.

For the Chinese government, collecting such data has become a top priority.

According to the official Xinhua news agency, a number of district level governments have set up the "data co ordination bureau", which aims to integrate the post office and data pool into one, maintaining tens or even hundreds of databases.

Rogier, Creamer J, a political lecturer at Oxford University, China, said: "I think the Chinese government realizes that people's mobile phones are..." (University).

And the smart watch is generating all the data, and the government thinks, 'Hey, I want some data.'

The government's security department has had a huge Internet censorship and surveillance machine known as the "the Great Wall firewall" (GreatFirewall), monitoring and blocking social media posts on the Xinjiang ethnic issues or the 1989 Tiananmen square.

Creamer J insists that it is too early to judge the new social credit system.

The system seems to combine large-scale surveillance with algorithms to determine the correlation between social behavior and Internet data.

He said it is not clear whether the Chinese government's project is related to the experimental credit scoring project of private enterprises - Alibaba sesame credit (SesameCredit) and Tencent's ongoing projects.

'reputable people'

There is a lot of doubt about which data is based on these credit ratings.

China RapidFinance, a P2P lending company using Tencent data to calculate credit scores, says it uses online shopping data to determine borrowers' credit reliability.

According to the company's scoring system, diving equipment helps to improve credit scores, while photographic equipment is not conducive to credit scoring.

Alipay smartphone (Alipay), a Alibaba affiliate operating sesame credit, has told users that the airline tickets they buy or the hotels they book online will affect their credit scores.

In addition, the application also says, "we will consider your influence in interpersonal interaction and the credit status of your friends" to determine the credit score of 900 points.

A spokesman for Alipay AntFinancial, a parent company, denied that a friend's score would "affect your own sesame score".

But a senior member of another Chinese Internet company pointed out that it is reasonable to consider personal online relationships when grading users.

When asked to explain the credit scoring algorithm, a senior executive of a Chinese Internet company said: "we can assume that reputable people are also good reputable people, and trustworthy people who make friends online are also credible people."

The lack of public information in the credit scoring algorithm of private enterprises has aroused the curiosity of analysts. They question the use of these systems for their main purpose, predicting default.

Mark Natkin, director of Marbridge Consulting in Beijing, said: "when I mention credit scoring, what I think of is the ability to repay loans." (MarkNatkins)

In the eyes of some of these enterprises, they seem to think that the goal is to evaluate users' quality in a broader sense.

Creamer J, of University of Oxford, says this credit scoring system represents a mixture of two utopian visions, one of which is the vision of Silicon Valley and one of the vision of the Chinese Communist Party.

"The Chinese government, Chinese Internet companies and Silicon Valley seem to be working on a paternalistic way of improving the human condition," he said.

He refers to a rapidly expanding book whose typical representative is Nudge, published in 2008. The book says technology can create basically imperceptible incentives to promote people to improve themselves.

He said: "Silicon Valley and Beijing have this view that we can use technology to shape or reshape all kinds of incentives to motivate people to improve their behavior, and the definition of" improvement "is determined by" we ".

Data Furnace

Creamer J claims that China's social credit system is an extreme example. Its starting point is that smart phones reward the owners who climb stairs instead of elevators, and users of TripAdvisor are trusted assessors by evaluating other people's comments.

China is not the only country that wants to use the Internet to monitor its power.

Edward Snoden, Edward Snowden, broke the news in 2013, disclosing the participation of American businesses and intelligence agencies in certain projects, which enabled the government to access personal data.

Credit rating agencies in the United States have begun experimenting with internet data, such as where someone is shopping, as a scoring indicator.

According to some people, this approach is close to the illegal "circle red line" behavior: the red line of the poor areas will be lent to residents of these areas.

The growing distrust of Google (Google), Facebook and other Western hi-tech groups highlights the unease of these companies holding large amounts of personal data.

Analysts say that in China, the cooperation between big data and big brother is more ambitious. This cooperation takes place in the vacuum of law, and is promoted by authoritarian countries, and there is no civil protection mechanism for privacy.

Hu Jia, a Chinese social activist and dissident, said: "outwardly, this system may be like a way to promote trust and enhance people's credibility. It should be progressive.

But in a authoritarian state, the information they can get is unlimited, and there is no law to protect those victims. "

Some involved enterprises (many of them need to maintain their international reputation) are taking preventive measures.

A senior executive of a company that has obtained a credit permit admits frankly: "there is no clear regulation for data types and unauthorized data available to private enterprises."

The executive said that as part of his partnership with China's telecom operators, his company could access massive mobile phone records without legal restrictions on its use.

However, he said that because of concerns about privacy within the company, the company chose not to collect such data.

"Our standards of behavior are more stringent than some of our competitors," he said.

Zhao Zhanling, a lawyer in Beijing who specializes in intellectual property and privacy, said the relevant laws are full of loopholes. Regulations governing the unofficial credit scoring system include a list of data that needs to be sought. However, the regulations do not clearly define "personal information" and there is no legal definition of what "consent" means on the Internet.

Even the helm of China's big data revolution seems to be worried about the potential impact of its plan.

Last year, Xinhua quoted Wang Xiaolei, deputy director of the PBoC Credit Reporting Center (the new social credit system) to be criticized by the deputy director of the center, criticizing China for its lack of legal protection for personal data.