From Cyberspace IDs to Digital Yuan: Communist China’s Expanding Grip on Online Freedom

From Cyberspace IDs to Digital Yuan: Communist China’s Expanding Grip on Online Freedom
A tower of security cameras (center L) are seen on The Bund past the Lujiazui financial district in Shanghai on May 23, 2023. Hector Retamal/ AFP via Getty Images
Antonio Graceffo
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Commentary

China already has some of the most extensive surveillance and social control systems in the world, and recent advancements have moved the Chinese Communist Party (CCP) closer to total control over both the cyber and physical worlds.

The CCP now controls and monitors 700 million CCTV cameras across the country, capable of recognizing citizens not only through facial recognition but also by the way they walk, known as gait recognition. This system is integrated with a social credit system, which rates citizens based on their compliance with CCP dictates. A downgraded score can reduce access to essential aspects of digital life under CCP control, including bank accounts, travel, shopping, employment, and even housing. It also affects social and dating life, as associating with someone with a low social credit score can negatively impact your own.
In addition to the broad network of surveillance cameras known as Sky Net, the Great Firewall of China blocks nearly all foreign news media, preventing international news from entering the country. Domestic media outlets are state-controlled, limiting citizens to only CCP-approved news. Gmail and foreign social media are blocked, while domestic platforms are closely monitored. Posting or even sharing forbidden content privately can have severe consequences, giving the CCP control over who you communicate with and what you say.
The CCP already monitors everyone, controls what they read, what they say, who they interact with, and, until recently, even how many children they could have. But the CCP’s desire for control doesn’t stop there. This year, the social credit score is being expanded into a nationwide system, as outlined in the CCP’s publication “Opinions on Completing the Social Credit System with Chinese Characteristics.”
Other initiatives of increased control include a crackdown on VPNs, which many use to bypass the Great Firewall and access foreign and forbidden content. Only state-approved VPNs are legal now, and most app stores no longer offer nonapproved options. These approved VPNs are required by cybersecurity and national intelligence laws to provide Beijing with user data upon request. Additionally, they are equipped with safety protocols that may restrict access to banned content. Thus, using a state-approved VPN not only fails to undermine the CCP’s dominance in cyberspace but actually strengthens it.
In May, the National Information Security Standardization Technical Committee released the “Cybersecurity Technology—Basic Security Requirements for Generative Artificial Intelligence (AI) Service,” regulating AI-generated content to ensure that all digital media aligns with state-approved values and does not undermine national unity.
The regulation also controls training data, stipulating that they must contain no more than 5 percent “illegal” or “harmful” content—in which “harmful” refers to anything that undermines the CCP, and “illegal” covers content already banned under existing censorship rules. This includes information from foreign history textbooks, news media, or anything regarding Taiwan or Tibet’s independence. This move is part of a broader strategy to control the narrative within China, ensuring even automated content production remains under CCP oversight.
The digital yuan, a central bank digital currency that trades 1:1 with the physical yuan, is still being rolled out but will add another layer of CCP control over both the digital and real worlds as transactions become more closely tracked. While the system includes privacy tiers, users must register with their phone number and ID, eliminating any hope of anonymity in digital transactions.

If the country eventually goes fully digital, cash payments would disappear, meaning that every payment would be recorded. This means that anyone who runs afoul of the CCP could have their digital wallet shut down, effectively cutting off their ability to spend money. Additionally, since both the sender and receiver of funds are known to the CCP, if one is suspected of wrongdoing, such as affiliation with a banned group, both could be brought in for questioning. Compliance would be ensured by making the restoration of the digital wallet contingent on the quality of information provided to authorities.

One of the most recent advancements in CCP control is the cyberspace ID proposal, which is already being tested by several popular apps. Chinese internet users are already required to register with their real identities, and platforms such as Weibo, Xiaohongshu, and Douyin already display users’ locations alongside their posts. Existing regulations link personal information to online activities, and introducing a national digital ID would only strengthen the CCP’s grip on citizen activity. This cyberspace ID would likely be tied to the social credit score, allowing authorities to suspend internet privileges for those being punished.
Beijing justifies these restrictions as necessary measures to reduce crime, enhance cybersecurity, and limit data collection by private companies. However, the combination of these controls, soon to be augmented by the digital yuan and cyberspace ID, would enable the CCP to assert complete dominance over the cyber world.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Antonio Graceffo
Antonio Graceffo
Author
Antonio Graceffo, Ph.D., is a China economic analyst who has spent more than 20 years in Asia. Graceffo is a graduate of the Shanghai University of Sport, holds a China-MBA from Shanghai Jiaotong University, and currently studies national defense at American Military University. He is the author of “Beyond the Belt and Road: China’s Global Economic Expansion” (2019).