China’s creation of market for trading data to help achieve ‘common prosperity’ goal, country’s top economic planner says

 

·         How data will play a role in wealth distribution marks ‘a major theory innovation and breakthrough by the Chinese Communist Party’, the NDRC says

·         ‘Common prosperity’ emerged as a high priority in Beijing’s economic agenda during the 20th Party Congress held in October last year

Xinmei Shen

Published: 7:00am, 5 Jan, 2023

Data exchanges have already been launched in major cities across China. Photo: Shutterstock

Building a market for trading data represents a “key measure” for China to move forward its “common prosperity” strategy, according to the country’s top economic planning body, as Beijing boosts efforts to develop the nation’s digital economy by applying commercial rules to information exchange.

“The idea that data should play a role in wealth distribution is a major theory innovation and breakthrough by the Chinese Communist Party,” the National Development and Reform Commission (NDRC) wrote in an article published in the latest edition of Qiushi, the party’s official journal.

While China’s data trading experiment is still at an early stage, it “brings new opportunities” that will allow people to share the benefits of a digital economy, according to the NDRC. In April 2020, policymakers added data as a new production factor that is in the same category as land, capital and human labour.

Common prosperity, an ideal about economic equality, was revived by President Xi Jinping in August 2021 as a means to “properly deal with the relationship between efficiency and fairness”. It emerged as a high priority in Beijing’s economic agenda during the 20th Party Congress held in October last year.

The Shenzhen Data Exchange, where companies can buy and sell data the way they do with regular commodities, held its inaugural ceremony and started trading activities on November 15, 2022. Photo: Xinhua

Since there are currently no tried-and-tested schemes for China’s data market, the central government is willing to explore possible solutions. On data ownership, NDRC said all parties involved in the areas of data collection, processing, trade and application should each be entitled to certain rights.

The NDRC also indicated that the country’s data market will push to grow communities of traders and third-party service providers, while exploring cross-border data flows as well as “offshore data operations and outsourcing”.

The NDRC article reflects how Beijing wants to unlock the potentially huge economic value of the massive troves of data generated by companies involved in the digital economy, such as the major internet platform operators.

Data exchanges have already been launched in major cities across China. In November, trading kicked off at the state-run data exchange in the southern tech hub of Shenzhen, allowing companies to buy and sell data the way they do with regular commodities.

The Central Committee of the Chinese Communist Party and the State Council, the country’s cabinet, last month released guidelines that lay the groundwork for what Beijing calls a “fundamental data system”, covering areas such as defining the data rights of different entities, management and supervision of information, and trading and profit distribution in the data market.

These new guidelines impose a strict review of data processing, cross-border data transfers, and mergers and acquisitions activities involving foreign capital that could affect national security.

But Alex Roberts, counsel for technology, media and telecommunications at international law firm Linklaters in Shanghai, told the Post last month that this new requirement is worrisome for international businesses in China, “given the current uncertainty about review processes under existing data rules”.

https://www.scmp.com/tech/policy/article/3205599/chinas-creation-market-trading-data-help-achieve-common-prosperity-goal-countrys-top-economic?module=perpetual_scroll_1&pgtype=article&campaign=3205599

More than a dozen Chinese government bodies have jointly released guidelines on developing the country’s data security sector

As China pushes forward with efforts to use data to drive economic growth, it is also tightening control over its storage and access

Ben Jiang in Beijing

Published: 8:30pm, 16 Jan, 2023.

China plans to significantly shore up data security across major industries ranging from telecommunications to finance, as Beijing seeks to unlock the economic potential of the massive amount of data generated by its digital economy while protecting national security.

As data becomes an important production factor and a key engine of economic growth, data security is also becoming an integral part of the country’s national security, the cybersecurity unit under the Ministry of Industry and Information Technology (MIIT) said in an online Q&A published on the agency’s website on Sunday.

The Q&A was designed to elaborate on guidelines jointly issued on Friday by 16 Chinese governmental bodies – including the MIIT and the Cyberspace Administration of China (CAC) – which set a target for the country to grow its data security industry by 30 per cent each year, to more than 150 billion yuan (US$22.4 billion) by 2025.

During the same period, the government plans to build five provincial and state-level data security labs to achieve breakthroughs in key technologies and products. It also wants to establish five national data security industrial estates and develop several “little giants” – smaller businesses with special products and know-how in the sector – that are globally competitive.

Industries ranging from telecommunications and transport to finance and healthcare should present at least eight applicable use case scenarios in the next three years, according to the guidelines.

By 2035, China’s data security sector is expected to mature and “enter a prosperous period”, bolstering the national digital economy.

Other notable agencies involved in Friday’s guidelines include the National Development and Reform Commission (NDRC), the Ministry of Public Security, the People’s Bank of China, the State Administration for Market Regulation, and the China Securities Regulatory Commission.

The new directive came days after the NDRC wrote a piece in the Chinese Communist Party’s official journal Qiushi, calling “the idea that data should play a role in wealth distribution” a “major theory innovation and breakthrough” by the pary

Chinese policymakers added data as a new production factor in April 2020, putting it in the same category as land, capital and human labour.

Developing the data security sector – which will involve collaboration among research facilities, universities and companies – will improve practices across industries, laying the groundwork for building up the country’s digital economy, according to the MIIT’s Q&A on Sunday.

As China pushes forward with efforts to use data to drive economic growth, however, it is also tightening control over its storage and access.

The Data Security Law, which came into effect in the country in September 2021, treats some domestically generated information as a matter of national security and requires each government body to supervise data security in their own realms.

Since then, Beijing has released a raft of rules governing the export of Chinese data.

Last month, the MIIT passed new rules mandating that important industrial data be stored within the country, covering areas including industry, telecoms and radio waves.

Since early last year, Chinese companies seeking initial public offerings overseas are required to go through a cybersecurity review if the business involves the data of more than one million Chinese consumers.

Authorities have also increased scrutiny over the data practices of Chinese technology companies.

In July 2021, the CAC launched an unprecedented cybersecurity investigation into ride-hailing giant Didi Chuxing “to prevent risks regarding national data security and to maintain national security”.

That probe marks the first time Beijing has publicly cited national security as a reason for launching an inquiry into one of the country’s tech giants. Didi was later found to be responsible for various data protection violations, resulting in a US$1.2 billion fine last year

https://www.scmp.com/tech/policy/article/3206997/china-unveils-plan-boost-data-security-key-industries-bet-data-driven-economic-growth