This is not good, particularly when China starts exporting this ideology which it appears to be already doing. This social credit system is not just a surveillance system for individuals. It also includes foreign companies who want to operate in China, who are required to participate in this system as part of their operating license.
I had a friend I had been corresponding with for years in China, and she stopped corresponding a few months back when I moved to Taiwan. I wonder if this new system had anything to do with her decision to end our online friendship? My guess is yes.