China’s social credit has pros and cons for firms

Significance

Most commentary outside China focuses on the impact on individuals, but its main goal is to regulate businesses. The corporate SCS differs from the individual SCS in significant ways. Contrary to popular belief, individuals are not given quantitative ratings at the national level. Firms are.

Impacts

• The SCS is exclusively based on existing government information, so businesses will not face added compliance burdens.
• In the near future, any change to the system is most likely to be only incremental.
• The SCS is, and is likely to remain, low-tech in nature.