China issues new guidelines to curb privacy risks in social-credit rollout

China’s cabinet on Thursday set fresh rules for its nationwide social-credit system, promising tighter control over personal data and stronger penalties for fraud as it seeks to ease public fears of surveillance.

The State Council said it would “promote high-quality development” of the ratings scheme, which scores firms, officials and citizens on their trustworthiness, by creating a long-term deterrent to dishonest conduct.

Under the guidelines, any records of wrongdoing—and the sanctions they trigger—must be collected, stored and shared strictly in line with Chinese law. Officials pledged that public credit disclosures would protect commercial secrets and individual privacy, while serious breaches could still bar offenders from loans, subsidies or public procurement.

Responding to criticism that the system harvests data with scant oversight, Beijing vowed to learn from international practice and to tread cautiously in areas that have raised “significant public concerns.”

Financial institutions, credit-rating agencies, internet platforms and data brokers will face closer scrutiny over how they gather, process and release personal information.

China began building the social-credit framework in 2014 to combat tax evasion, loan defaults and counterfeit goods. But weak regulation and enforcement have fuelled anxiety that the programme could become intrusive, prompting Thursday’s attempt to tighten safeguards while preserving the goal of a “fair and honest market environment,” the cabinet said.

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