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China to Regulate Data

As the importance of data has grown in recent years, China has taken steps to develop policies that would promote the effective use and circulation of public, personal, and corporate data following rules, as well as increase governance over data resources. It has also emphasised the importance of developing a system that ensures the unhindered flow of data across the border securely and legally.

A document was released by the Central Committee of the Communist Party of China and the State Council, or Cabinet. The paper outlined strategies for developing the fundamental infrastructure for data governance and effectively utilising data, which will energise the digital economy.

The paper empowers the real economy and allows the public to profit more from digital progress, critical components of the digital economy’s growth. The initiative includes creating a data ownership system, a circulation and trading system, and a method for distributing digital currency.

According to a National Development and Reform Commission official, the new rules are meant to encourage the lawful and efficient use of data to empower the real economy and allow people to share the benefits of the digital economy’s growth. According to the official, the new measures will enable the country to respond to the global technological revolution and industrial transformation while improving its international competitiveness.

Another issue addressed in the document is the importance of lowering the threshold for market participants to gain access to data while strengthening personal information protection and establishing a system for identifying individuals’ and companies’ rights in the production, transfer, and use of data. China will also create an authorisation process for the use of personal data and take steps to standardise the use of this information by enterprises and avoid excessive data collection.

Data is the core element for the growth of the digital economy, according to Ouyang Rihui, Professor of Digital Economics at the Chinese Internet Economy Research Institute at the Central University of Finance and Economics, and the latest policy document has laid the groundwork for making it a critical factor in digital growth.

He explained that the steps would assist in transforming data into development resources and preparing it for market alignment. Notably, the agreement seeks to balance protecting personal information and its research and use.

The policy was set up to encourage the efficient use and circulation of public, personal, and corporate data in accordance with rules and to strengthen data resource governance. The government will coordinate efforts to create efficient, standardised data trading platforms, a single set of trading and security technologies, and infrastructure facilities for data circulation.

Internationally, China will accelerate the development of infrastructure for cross-border digital trade and will take an active part in developing international standards and procedures for data flow, security, certification, and evaluation, as well as digital currencies.

The documents include taking initiatives such as fostering cooperation between Chinese and foreign enterprises and organisations and supporting foreign investors’ efforts to enter newly opened sectors to enhance the orderly two-way cross-border flow of data.

It also emphasised the importance of conducting national security reviews of activities such as data processing, cross-border data flow, and foreign investor mergers and acquisitions. China will reject data hegemony and protectionism and develop compelling answers to some countries’ long-arm jurisdictions.

Yang Qiang, Head of the Computer Science and Engineering Department at Hong Kong University of Science and Technology, wrote in a research paper that China had maintained an advantage in the development of standards for cross-border data flow because of its leading technologies in data security and privacy protection, robust computing foundation, and massive digital economy.

According to Yang, contributing to developing rules and standards for digital technologies will boost China’s discourse power in digital trade, improve its autonomous bilateral and multilateral alliances, and protect China’s interests in the global revenue-sharing process.

A worldwide market with fair competition is in the world’s best interests and that extreme data protectionism is the wrong option. Encouraging foreign enterprises to engage in data services will allow them to explore the value of sharing data, play an active role in newly opened industries, and stimulate the establishment of international rules to ensure fair competition.

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