The Score That Does Not Exist

The single nationwide citizen score is a Western invention about China, not a Chinese invention about citizens.

I spent years watching Western coverage describe a dystopia where every Chinese citizen carries a number that opens or closes their life. Then I read the people who actually study the system. Vincent Brussee at MERICS, in his February 2022 analysis, calls the citizen-score narrative “more bogeyman than reality” and documents a system that is lowly digitalized, highly fragmented, and aimed primarily at businesses. Jeremy Daum of Yale Law School’s Paul Tsai China Center, who has translated the underlying Chinese regulations for years at China Law Translate, finds that meaningful restrictions attach almost entirely to one instrument: the court judgment-defaulter list, which is a debt-enforcement tool, not a behavioral score. MIT Technology Review in 2022 and WIRED in 2019 independently reached the same conclusion.

Here is the part the coverage skips. There were real consumer scoring programs in China. They were private. In 2015 the People’s Bank of China permitted eight private firms, including Ant’s Sesame Credit and a Tencent unit, to pilot personal credit scoring. In 2017 to 2018 the PBOC reviewed the pilots, cited conflicts of interest, and refused to license any of them, creating the state-backed Baihang Credit instead. Tencent’s consumer score was pulled almost immediately after a brief launch. Sesame Credit survives as what it always functionally was: a loyalty and rewards program.

So the one entity in this story that examined a commercial citizen-scoring product and said no was the Chinese central bank. Hold that thought, because the next question is where the scoring-and-lending machinery came from in the first place.

Reputation-scored peer lending is a Western fintech invention that reached China two years after San Francisco.

The world’s first peer-to-peer lender was Zopa, launched in London in March 2005 by a founding team out of Egg, the internet bank Prudential plc created. Prosper launched in San Francisco in 2006, and its original model was precisely the thing Western audiences would later fear from Beijing: borrowers carried ratings and reputation data, and strangers priced their access to money against it. LendingClub followed in 2006 to 2007. China’s first P2P platform, PPDAI, appeared in 2007.

The timing matters. These platforms scaled into the 2008 crisis and its aftermath, when households on every continent needed credit and regulators were busy elsewhere. The algorithms were complex, the capital requirements were nonexistent, and the lenders had no skin in the game. The United States eventually forced its platforms under securities regulation. The model kept moving.

China’s big tech platforms were seeded, staffed, and structured by Wall Street, a fact recorded in their own SEC filings.

Henry Paulson ran Goldman Sachs as chairman and CEO from 1999 to 2006, and the Daily Telegraph reported in July 2008 that he had visited China more than 70 times in that career, building relationships with the Chinese elite. He was sworn in as US Treasury Secretary on 10 July 2006 and served to 20 January 2009, pressing China on financial opening through the Strategic Economic Dialogue he founded. His March 2008 “Blueprint for a Modernized Financial Regulatory Structure” was a domestic reorganization plan; the China-facing push ran through the Dialogue. Precision matters here, and the precise version is damning enough.

Goldman led Alibaba’s first institutional round in October 1999, roughly $5 million for a stake reported between 28 and 33 percent, with SoftBank’s separate $20 million following in early 2000. Alibaba Group Holding Limited is, per its own SEC filings, an exempted company incorporated under the laws of the Cayman Islands on 28 June 1999. Tencent Holdings is likewise a Cayman Islands exempted company. Tencent’s president, Martin Lau, came from Goldman Sachs Asia investment banking, where he was an executive director and COO of the telecom, media and technology group, and before that from McKinsey & Company. Alibaba’s president since August 2015, Michael Evans, was a Goldman Sachs vice chairman from February 2008 to December 2013 and chairman of its Asia operations.

McKinsey, for the record, paid $573 million to 47 states, DC, and five territories in February 2021 and $650 million to the US Department of Justice in December 2024 over its work turbocharging Purdue Pharma’s OxyContin sales, with a former senior partner pleading guilty to obstruction. Lau had no role in that work. But when someone tells you China’s tech giants are alien to the Western financial system, the org charts and the incorporation papers say otherwise. They are the Western financial system, offshore edition.

Faced with a metastasizing predatory lending sector, Beijing regulated it out of existence and stopped the largest IPO in history to do it.

By 2015, China had over 6,000 P2P lending platforms. The sector produced the Ezubao fraud: a Ponzi scheme that raised over 50 billion yuan, roughly $7.6 billion, from about 900,000 investors before collapsing. Founder Ding Ning received a life sentence on 12 September 2017. The regulatory response escalated from registration requirements to a November 2019 order converting P2P lenders into small-loan companies, and by November 2020 Chinese authorities reported the number of operating P2P platforms at zero. Not reduced. Zero.

Then came the main event. Ant Group’s dual Shanghai and Hong Kong listing was set to raise between $34.4 and $37 billion, the largest IPO ever attempted. Ant’s consumer lending arms, Huabei and Jiebei, were generating nearly 40 percent of its revenue in the first half of 2020, and Ant was funding only about 2 percent of the joint loans it originated with banks. The risk sat on the banking system; the fees sat with Ant. On 24 October 2020, Jack Ma stood up at the Bund Summit in Shanghai and attacked Chinese banking regulation and the Basel framework. On 2 November, regulators published draft rules requiring online micro-lenders to fund at least 30 percent of joint loans from their own capital. On 3 November, the Shanghai Stock Exchange suspended the IPO, days before listing. Ma then largely disappeared from public view for months.

You can read that sequence as authoritarian caprice, and much of the Western press did. Or you can read the rule: if you originate the loan, you hold real capital against it. That is not exotic. That is what bank regulation is for, applied to entities that had been enjoying bank economics without bank obligations.

The same predatory model China shut down continues to operate in the West, run in part by the officials who managed the 2008 crisis.

Timothy Geithner was president and CEO of the Federal Reserve Bank of New York from 2003 to 2009 and Treasury Secretary after that. In March 2014 he became president of Warburg Pincus, the private equity firm whose fund acquired Mariner Finance, a subprime installment lender, in 2013. The Washington Post’s investigation of 1 July 2018 documented Mariner’s model of mailing unsolicited live checks to cash-strapped households and quoted a former manager trainee’s description of the business, cited in the summary above. Mariner disputes the predatory characterization. The Post’s reporting, and the business model it describes, are on the record.

The reference case for the machine’s behavior when unregulated remains Goldman’s Abacus 2007-AC1: the SEC alleged Goldman failed to disclose that the hedge fund helping select the mortgage portfolio was betting against it, and Goldman settled on 14 July 2010 for $550 million, then the largest SEC penalty against a Wall Street firm, acknowledging its marketing materials contained incomplete information. Sixteen years ago to the day, as it happens. Meanwhile buy-now-pay-later lending has spread through Western checkout pages with a fraction of the scrutiny China applied to Ant.

One more thread, worded exactly. The G7 launched the Partnership for Global Infrastructure and Investment in 2022 as its explicit answer to the Belt and Road. In March 2025 a BlackRock-led consortium agreed to acquire CK Hutchison’s Panama ports and a 43-port global portfolio at a $22.8 billion enterprise value, a transaction Washington framed as reclaiming the canal from Chinese influence; Beijing pushed back, and by early 2026 Panamanian court action had annulled the concessions. The West’s answer to Chinese infrastructure lending was to have an asset manager buy the infrastructure. The deal did not hold. The instinct is instructive.

China’s escape from both shock therapy and platform-lending capture came from the same habit: test small, verify, then scale.

Isabella Weber’s 2021 book How China Escaped Shock Therapy documents how close China came in the 1980s to big-bang price liberalization, and why it pulled back in favor of gradual dual-track reform. The famous phrase, crossing the river by feeling for the stones, is popularly credited to Deng Xiaoping; Weber traces its economic use to Chen Yun as early as 1950. Chen’s birdcage economy captured the same idea: the market bird flies freely, inside a frame that keeps it from flying into the window. The P2P shutdown and the Ant capital rule are the same method applied forty years later. Run the experiment. Watch what it does to people. Keep what works. Kill what preys.

Contrast the prevailing Western doctrine. Peter Thiel’s 2014 Wall Street Journal essay, adapted from Zero to One, is titled “Competition Is for Losers” and argues that monopoly is the condition of every successful business. China’s technology sector runs the other way: when DeepSeek released its R1 model on 20 January 2025, it was one of at least eight serious frontier AI labs in China, alongside Alibaba’s Qwen, ByteDance, Zhipu, Moonshot, Baidu, Tencent, and others. On 27 January 2025, Nvidia fell 17 percent in a single day, erasing roughly $589 to 593 billion in market value, the largest one-day loss for any company in history, in a selloff widely attributed to DeepSeek’s release. The country the West calls a monolith runs on brutal internal competition. The economy the West calls free is run by men who write essays against competing.