China’s Social Credit System Raises Data Security Fears
Companies doing business in China should review their compliance efforts as well as risks to their data in the context of China’s Corporate Social Credit System (SCS), a new study[pdf] by the European Union Chamber of Commerce in China concludes.
The Corporate SCS is a new system that will mandate companies operating in China to provide large amounts of data to the government. Beijing will use the data to calculate a corporate social credit score that can greatly impact businesses operations, with high scores leading to preferential treatment, while low scores could lead to reputational damage, make it harder for firms to do business, or even result in blacklisting.
The report states that “taken individually, most of the transferred data points are not highly sensitive information,” yet “the integration and systematically cross-cutting use of data on the government’s side can become a challenge,” because “it provides the government with a full picture of the detailed performance and capability of a company.”