Yes, it is true. They use a social credit score system and have to scan their phones to open doors to some facilities or to get toilet paper out of a dispenser.

Think "Minority Report" using the cell phone.

If your social credit score drops too low, they block your ability to transact by cutting off your phone. Then, nobody will do business with you for fear of being associated with you and cutoff too.

Probably a combination of both dead and those who have spoken against the government during the pandemic.