The real danger isn't what this does to china, though that already would be bad enough, but what this implies.
This system in china is a prototype of a new incredible potent form of mass manipulation. The big danger is that other systems, be it goverments, religiions or corporates, adapt that system and further develope it, getting a smarter and way more suptile aproach than china.
Edit:
After further research, it appears that Sesame Credit is not more than a chinse version of FICO-Rating or Shufa. So a raw credit-rating with no political intentions.
( a good article on this subject: http://qz.com/519737/all-chinese-citizens-now-have-a-score-based-on-how-well-we-live-and-mine-sucks/)
However, the chinise goverment is indeed planeing a social credit score for 2020, haveing a competion of serveral credit scores as pilot projects for the governmental credit score, with the most prominent one beeing sesame credit.
So while sesam credit atleast for now is a raw credit rateing system, it probably will serv as fundation for a govermental system.
There is actually not much known about that govermental system besides the directive.
The problem is that the directive is very vague, while it does not directly state that data is used as implyed by extracredits, it also does not say thatz it will not.
from the directive:
....establishing the idea of an sincerity culture, and carrying forward sincerity and traditional virtues, it uses encouragement to keep trust and constraints against breaking trust as incentive mechanisms, and its objective is raising the honest mentality and credit levels of the entire society.
(....)
Government promotion, joint construction with society. Fully give rein to the organizational, guiding, promoting and demonstration roles of government. The government is responsible for formulating and implementing development plans, completing regulations and standards, fostering and supervising credit service markets
(....)
foster good habits of sincerity and trust-keeping,
(...)
...and guide toe construction of professional ethics and behavioural norms.
I think the main problem is that in this context, the definition of terms like 'honest mentallity', 'professional ethics' and 'behavioural norms' is not given. Combined with the frequent mention of 'Government promotion', this certainly hints to the possibility that the definitions of 'good habits of sincerity and trust-keeping' and such will be up to the goverment, and while the directive does not push one to interpretations such as the one in extra credits, it certainly does allow for such interpretations, and the though of it isn't far fetched.
i'm still very skeptic towards what happens in china,as they are creating a social credit rateing(and actually serveral credit rateings for everything, includeing rateing systems) with reward/punishment systems, and they use lots of data for that, which gets suppostly provided by alibaba(though this isn't confimed by alibaba) weehboo and so on(though that doesn't really differ much from the western world, only that china is more open about data collection) but it's not as bad as extracredits makes it look like, especially in how far tencent is involved on it.
However, the idea of an establishment useing gameification in a similar way as presented by extracredits remains most unsettling.
Disclaimer: I only did skim the directive and i am by far expert for such things, so take this with a grain of salt and look into the directive your self.