TLDR: "China has enforced a “real-name registration” system for over a decade, meaning that Chinese internet companies almost always know the true identity of users who are, say, ordering a dress online, leaving a social media comment or playing a video game.

With the new centralized ID system, the Chinese government will take over the process. Users who submit a trove of personal information — including scans of their faces — will receive a unique code to access online accounts.

This means that companies, like social media site Weibo or online shopping behemoth Alibaba, will no longer be able to see the personal information of their users with digital IDs — but Chinese authorities will be able to see the real identity behind online accounts across a range of sites."