"This is true in the west as well. Especially now in 2018, if someone you're even tangentially connected to does something deemed to be unsavory you are expected to immediately and forcefully disavow them or face the social consequences. Even then, you still may be tainted by association."

No, this is generally not true.

Unless you're a public figure and only then in specific circumstances.

Almost nobody holds people accountable for what their friends do.

Bill Clinton's brother was a drug dealer.

Barak Obama's father was a kind of unsavoury deadbeat dad.

I suppose both of them would have had nary enough 'social credit' to become President.

Also - it's borderline shocking to hear a casual defence of this system. Theoretically yes, I can see a rhetorical argument, but in practice it's pretty scary. In America people do have 'credit scores' but that's generally a more open thing, and you still get to vote and ride the subway if you have low credit score.