Stuff like this will slowly stop further evolution of society and lock down the status quo. Right now we still have ways to change society peacefully but in a surveillance state either nothing changes or change has to come with force. I think societies with massive surveillance will stagnate until they collapse.
Or more frightening, the Communist experiment is successful long-term and becomes the dominate model for 'stability' globally.
Human societies have evolved a very sophisticated mechanism for moving people up and down hierarchies using a distributed reputation tracking system. This system is interesting in that they’re trying to centralise the reputation tracking system and thereby control it.
To the extent that it replicates what people, on average, think about you I think it’ll work. But planned economies loose to unplanned ones because distributed decision making outperforms centralised decision making. Eventually this system will be misused, make bad decisions, or get ridiculously complex. Then people will loose faith in it. When that happens there’s very little China’s government can actually do to control 1.4 billion people. (That’s not to say that there their remaining options aren’t very worrying though, e.g. tanks)