China proposes social credit blacklist to combat data mishandling in its logistics sector

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A delivery man checks his phone in Beijing on April 9, 2019. (Image credit: TechNode/Cassidy McDonald)

China is looking to crack down on its logistics sector, with plans to add companies that mishandle personal data to a social credit blacklist, according to a document published by the country’s top national planning agency on Thursday.

Why it matters: China’s logistics sector is driven by the world’s largest e-commerce market. Given the volume of personal information needed to collect and deliver goods, there is room for mishandling and leaking private information.

  • Creating a blacklist for the logistics sector is part of a broader initiative to deploy punishments across governmental departments to enforce existing laws.
  • The move is the latest in a series of measures to control rampant data issues that plague consumers in the country.

Details: The draft document released by the National Development and Reform Commission (NDRC) is open for comment until August 14, the government body said in a statement.

  • Companies could be blacklisted for illegally collecting, disclosing, or distorting personal information, as well as providing data to others without consent.
  • Details of blacklisted individuals and companies will be published on the Credit China website, a website for social credit and blacklist information.

Context: China has laid out plans to create an oft-discussed social credit system, the backbone of which is expected to be completed by 2020.

  • The Chinese government is attempting to address issues of data mishandling in the country. Regulators have set up a cross-ministry task force to investigate apps that over-collect data. Numerous tech firms have so far been targeted, including Alibaba’s food delivery arm Ele.me, social e-commerce platform Xiaohongshu, and voice recognition firm iFlytek.
  • The initiative has found that popular financial services apps had not sufficiently protected user data.
  • China is using social credit as a mechanism to enforce laws,  creating cross-departmental punishments, a system in which a company or individual is penalized by multiple government entities if it is blacklisted by one.
  • The Chinese government hopes to gain insights into how people in the country behave and how to control them by aggregating records throughout its ministries and departments.