China’s ‘Social Credit Scoring’ is Expanding Globally, Now Openly Operational in Western Canada

Ryan Pan, a manager with Haidilao Hot Pot in Vancouver confirmed that over 60 surveillance cameras have been installed in the restaurant at the request of the Haidilao corporation, as part of the social credit system in China.

He said that the Vancouver location has 30 tables with two cameras assigned to each table.

When asked specifically why Haidilao required so many cameras to monitor staff and patrons, Ryan Pan said that the cameras were installed to “punish” staff if they didn’t adhere to corporate standards and to “people track”.

Pan also said that the video is sent back to China but declined to say why this was, other than to say the reason for this was “secret.”

Founded in Sichuan, China, the Haidilao opened up at two locations in the Vancouver region, the most recent of which was opened in 2018 in a former Swiss Chalet restaurant in the trendy Kitsilano district of Vancouver.

The location is within walking distance of the home rented by Huawei for staff temporarily re-located to Vancouver to assist Meng Wanzhou, the chief financial officer (CFO) of the telecom giant.

Following her arrest and hearing over a provisional US extradition request for fraud and conspiracy to commit fraud in order to circumvent US sanctions against Iran.

The Haidilao location is no more than 10 minutes to Meng Wanzhou’s mansion and the Peoples Republic of China Consulate.

Haidilao has over 935 locations around the world and more than 36 million VIP members and 60,000 plus staff.

We reached out to Ivy Li, with the Canadian Friends of Hong Kong, who is a well-known public speaker, writer and activist on matters related to China and pro-democracy, to ask why Canadians should be concerned that China’s social credit system is now operational in Canada.

Ivy, who was born and raised in Hong Kong, had this to say in response:

“Not only ethnic Chinese Canadians and residents, and businesses with Chinese ties are put at risk, but the privacy and safety of all Canadians and our society are compromised.

“Customers at a popular ethnic cuisine restaurant, especially in an upscale area, could be diplomats and politicians entertaining their guests, CEOs discussing their business strategies, professionals talking about company projects, journalists conducting interviews, etc., etc.

“Dinners discuss a wide range of subjects, especially after a couple of wine. The dining table in a popular restaurant is one of the best places to eavesdrop on someone and to get the pulse of a society.”

CHINA’S SOCIAL CREDIT SYSTEM

China’s social credit system was officially rolled out nationwide in 2014 with a plan to build “trust” in the marketplace and broader society.

According to a report by USA Congressional Research Service (CRS) in 2020, China’s social credit system has developed into two connected but distinct systems: a system for monitoring individual behaviour, still in early pilot stages, and a more robust system for monitoring corporate behaviour.

The deadline for implementing China’s social credit system was 2020 when it became mandatory for all Chinese citizens to be enrolled in the national database and rated with a “social score” based on different behaviours; these “social scores” are then used to punish or reward.

Praise the Chinese Communist Party (CCP) on social media and you will be given a higher score, potentially leading to benefits such as priority for school admissions, free gym services, shorter wait times at hospitals and other benefits.

Illegally protest against the CCP, forget to pay your utility bill, or knowingly associate with another individual who has a low score, and you might be restricted in accessing public services, excluded from taking transportation, or perhaps your children will be denied entry into the best schools.

A similar model is applied to businesses in China called the Corporate Social Credit System (CSCS) designed to create a single, standardized reputation system for local and foreign firms alike.

The system touches on virtually all aspects of a company’s business operations in China by assessing company performance, making sure they pay their taxes, uphold standard of service and other market entities.

Based on their rating, Chinese authorities will reward or punish businesses that can result in penalty fees, higher inspection rates and possibly even blacklisting.

Companies receiving a high corporate social credit score could result in better tax rate, market access and possibly being placed on what is known as a “redlist”.

That is inside China. What isn’t clear is how China’s social credit system impacts overseas Chinese living in Canada who work for companies with ties to China who are required to be a part of CSCS.

Will the behaviours and actions taken by individuals working in Canada for Chinese companies impact the score of relatives or other employees inside China?

It’s not inconceivable that a person protesting in Canada about human rights abuses in China, may not be hired by a Chinese owned company because they have been blacklisted by China’s social credit system, even if they live in Canada.

What about the impact of China’s social credit system on Canadian employment laws, privacy, and human rights laws?

We know that China has already started to move forward with the creation of an English language corporate social credit system version by Xinhua Credit for non-Chinese firms.

International brands are already punished if they step out of line in and out of China. They must either stay silent or actively support China’s policies if they want future access to the Chinese market.

We saw the NBA’s Houston Rockets general manager Daryl Morey tweeted in support of the Hong Kong protests and ultimately was forced to apologize.

More recently, the boycott of H&M and other Western brands in China after they spoke out against forced labour in the cotton industry in the Xinjiang region of China.

There is already a punishment-based system for corporations that don’t comply with the CCP regime regardless of compliance with China’s CSCS.

HAVE ANY CANADIAN LAWS BEEN BROKEN?

China’s CSCS operating within Canadian borders all boils down to the safety of workers, human rights, privacy of citizenry and national security, all of which is governed by legislation at a municipal, provincial, and federal level.

The Canadian government is aware that China has implemented the CSCS and has even issued recommendations on how to conduct business inside China now that it has been implemented.

But little to nothing has been done by elected officials to prevent China from implementing the CSCS inside Canada as a way to control foreign workers from China and Chinese owned businesses, or anyone for that matter, who is ethnic Chinese with personal or professional ties to China.

At a municipal (city) level, until recently, commercial security cameras used to be powered from a plug in the wall with a video cable going back to a personal video recorder (PVR).

The City of Vancouver would normally require an electrical permit for this kind of set-up which would have, at the very least, alerted city officials in this case, given the large volume of cameras installed.

However, the Haidilao cameras appear to be more modern cameras powered over Ethernet (POE). Meaning they are plugged into a network that can send video footage live back to China.

They can be installed at any point without a permit. Quite simply, there is nothing stopping the Chinese government from insisting that all businesses in Canada who have ties to China either professionally or personally install a surveillance system as part of China’s social credit system.

British Columbia purports to have strict privacy laws with the Personal Information Protection Act (PIPA) governing how an organization can collect, use, or disclose information on individuals.

When asked if the Office of the Privacy Commissioner was aware of CSCS sending private footage of temporary foreign workers and Canadian citizens back to China, Michelle Mitchell with the Office of the Privacy Commissioner in BC (unrelated to author), stressed that an important component of PIPA is consent and that an organization must have consent before collecting, using, or disclosing personal information, citing three types of consent under PIPA, which is express consent, implied consent, and opt-out consent.

Since many of the staff at the Haidilao restaurant are Chinese citizens and work under the Temporary Foreign Worker Program in Canada, and are already listed in the Social Credit system in China as citizens of China, they aren’t likely to demand privacy under Canadian law.

Even staff members who live in Canada permanently with “permanent resident status” face the same pressure to conform to China’s mandatory CSCS program, because China doesn’t consider individuals with permanent resident status in Canada unless they renounce their Chinese citizenship.

“Consent” isn’t an option in totalitarian regimes.

SAFETY OF WORKERS AND PRIVACY OF CITIZENS

We asked the Minister of Labour in British Columbia, Harry Bains, if he was aware that China’s social credit program was active in BC, and if he had any plans to update labour laws to protect employees — both foreign and domestic — to prevent punishment of overseas employees working in BC.

The Minister didn’t answer the question at all, choosing instead to have Lisa Beare, the Minister of Citizens’ Services in British Columbia, who is in charge of governing PIPA legislation, respond.

Lisa Beare also didn’t respond directly to the question either, instead the Ministry provided a boiler plate response to say that they expect organizations to essentially adhere to the honour system by following current privacy legislation.

“The Province expects organizations to follow Personal Information Protection Act (PIPA) in regards to the handling of British Columbians’ personal information.”

There was no mention by Ms Beare of government plans to update legislation to reflect current privacy concerns around China’s intrusion into the Canadians’ right to privacy.

NATIONAL SECURITY

A more insidious aspect to China’s CSCS is that it can be used to spy on Canadian citizens under the pretence of being a part of China’s social credit program. Canadian authorities may take the approach that CSCS has nothing to do with Canada and our laws.

However, the Haidilao hot pot restaurant manager clearly stated that there were two reasons for the surveillance cameras, for both social credit and state security purposes.

In all likelihood, next-generation data sources — such as information from facial recognition – driven video feeds, cell phone surveillance and e-com purchase history — are being collected from Canadians while they eat and it wouldn’t be the first time that the CCP has filmed Canadians inside Canada.

Over the past couple of years, an ever-expanding collection of surveillance cameras have been added to the Vancouver PRC Consulate, located in the prestigious Shaughnessy district of Vancouver, on the edge of a high traffic road that goes into the City.

The surveillance camera has been installed on the edge of the property, one of which jettisons out into Canadian space, then retracts back.

The street is a frequent place for pro-Hong Kong activists, Uyghurs protesting genocide, Iranians protesting the cooperation pact with China and members of Falun Gong protesting persecution.

Canada is a multicultural country that has opened its doors to countless refugees fleeing persecution and promotes equality and the right to free speech as a core value.

Yet Canada’s elected officials have done little if anything to ensure that the very people we have invited into Canada are promised a safe haven from the oppressive regimes they fled from in the first place.

The cameras used by the PRC consulate are the same cameras that the US banned the purchase and use of under the National Defense Authorization Act (NDAA) as a cyber security threat.

In 2019, Global Affairs, the department of the Government of Canada that manages Canada’s diplomatic and consular relations, also doesn’t appear to concerned that the Government of China is spying on Canadians with cameras installed on embassy grounds that jettison out into Canadian space, naively suggesting that addressing the matter is left to the Peoples Republic of China and the “honor” system of having a duty to adhere to Canadian laws.

“Diplomatic and consular representatives have a duty to respect local laws, and there is a similar expectation for the manner in which foreign missions operate.

“In Canada, there is an expectation that foreign missions comply with federal, provincial, and municipal laws and regulations, including those that governs the use of physical security equipment, such as cameras, fences, and lights.”

WHY MAKE IT SO OBVIOUS?

Why install over 60 security cameras in a restaurant if you don’t want customers to ask questions?

Restaurant manager Ryan Pan did say that the company had a very strict food safety discipline.

The chain suffered an embarrassing public incident at one of its Beijing restaurants a number of years ago that could be used to justify as an overreaction to installing so many cameras.

However, there is little doubt that Chinese surveillance within Canada can be correlated to the CCP’s need for control of its citizens.

By establishing this capability within Canada, through what is believed to be capitalist corporate enterprise, the Chinese are able to identify Canada’s response.

The restaurant in this case, with its “over-the-top” large volume of surveillance cameras could actually be a penetration test that measures vulnerability, as well as the reactions Canadian law enforcement and general public display.

Passive responses by Canada’s elected officials, law enforcement, and security intelligence agencies only serve to embolden influence operations, which have historically been the standard by which the Chinese base their tactics.

The potential for further technology-based exploitation inside Canada will most assuredly increase.

In a rare public statement made on 9 February 2021, Director David Vigneault of Canada’s Security Intelligence Service (CSIS) had this to say about the threat to Canada’s National Security by the Government of China:

“To be clear, the threat does not come from the Chinese people, but rather the Government of China that is pursuing a strategy for geopolitical advantage on all fronts-economic, technical, political, and military-and using all elements of state power to carry out activities that are a direct threat to our national security and sovereignty. We must all strengthen our defenses.”

Despite Canada’s security intelligence agency warning Canadians and elected officials about the threat to Canada’s national security, Canada’s Prime Minister, Justin Trudeau, has enjoyed the benefits of a very cozy relationship with China and isn’t likely to implement any significant changes to law that might affect that relationship.

We asked the Prime Minister’s Office (PMO) if Prime Minister Trudeau was aware that China’s Corporate Social Credit System is now operational in Canada and if he was aware that Canadian citizens were having their biometric information taken via video surveillance and sent back to China.

We also asked, what if anything did he intend to do legislatively to address CSCS in Canada.

The Prime Minister’s Office did not respond by deadline.

Ivy Li said this in response to the Prime Minister of Canada’s apparent lack of concern over China surveillance of Canadian citizens:

“What is most chilling as a Canadian is that, knowing the Chinese Communist Party ‘Social Credit System’ is able to operate in Canada openly, yet our governments at all levels have no measures to stop it, to prevent it from replicating across the country, and to protect Canadians from being spied on directly through private companies by a dictatorial regime who is currently committing genocide, forced-labour, on-demand organ harvesting, and crushing the basic rights of Hong Kong citizens. That regime is coming for us.

“CCP’s social credit system should be made illegal in Canada, and sharing our information live with a foreign regime’s suppressive surveillance system by a private business should be a criminal offence. Official policy must be brough in ASAP to stamp out such practices.”

The ultimate question is: how many companies in Canada have installed surveillance systems at the behest of the CCP for the purpose of fulfilling their obligation to the Corporate Social Credit System?

Is this just the start or is the system already well underway?

Is Canada prepared to address China’s Social Credit System operating inside Canada from a labour, human rights, privacy, and national security perspective or will Canada’s elected officials just wish it all away and appease the CCP instead of protecting its citizens and living up to best practices under the eyes partnership alliance?

Scott McGregor is an Intelligence Expert and Consultant. He is a former Canadian Armed Forces Intelligence Operator and Intelligence Advisor to the RCMP’s E-Division Federal Serious Crime. Ina Mitchell is an Investigative Journalist.