Yep, China is Different...

Here in the U.S. about 90% of American’s have a FICO credit score but in China only about 30% of citizens do. It was initially thought that online spending would be slow to take off in China due to the lack of credit cards and a poor logistics system. Well “China is China” and companies like TenCent and Alibaba have developed incredibly successful cell phone payment systems. China’s #1 online shopping day, November 11, Singles Day, (get it?) now does more business than our Black Friday and Cyber Monday combined.

But still, measuring people’s ability to pay off borrowings is difficult in China. So the government is stepping in with its own system and as you can imagine, it is “Capitalism with Chinese Characteristics.” The government says this new system “will allow the trustworthy to roam everywhere under Heaven while making it hard for the discredited to take a single step.” How do you say, “1984”?

Measuring filial piety as part of a credit score? Well just remember, in China parents over 60 may sue children for not visiting regularly or not ensuring that they have enough food! Better remember Mother’s Day! But also remember, here in the America our credit scores are not as straightforward as we like to think. Facebook toyed with using social media to gauge users’ credit but pulled back in 2016 due to regulatory concerns. And insurance companies have for some years quietly been using FICO scores to ascertain whether you are a good driver, and adjusting premiums accordingly.

In any case, who’s up for finding out what your Chinese credit score is?

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