👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Factbox-China moves towards digital economy dream with national data bureau

Published 03/08/2023, 04:06 AM
Updated 03/08/2023, 04:18 AM
© Reuters. FILE PHOTO: A man braving the wind walks past the Chinese flag on the Tiananmen Square, before the opening session of the Chinese People's Political Consultative Conference (CPPCC) in Beijing, China March 4, 2022. REUTERS/Carlos Garcia Rawlins
FCHI
-

By Josh Ye and Julie Zhu

HONG KONG (Reuters) - China has announced plans for a national data bureau, describing it as part of an effort to coordinate data resources in the country and to achieve a vision of "digital China" conceived by President Xi Jinping.

Its formation, which is part of a sweeping government reshuffle, is set to be voted by on China's legislature on Friday.

Here's what we know, and don't know about the new bureau:

WHAT IS THE BUREAU IS BEING SET UP TO SUPPORT?

Xi's vision for a "digital China" aims to see the country populated by smart, internet-connected cities and data treated alongside labour and capital as a key factor to drive the economy and help China compete more effectively globally.

While not as well known internationally as his other initiatives such as the Belt and Road, the topic of a digital economy has repeatedly come up during meetings of Chinese leaders over the past decade. Some local media reports say Xi first mentioned the term in 2012.

Since 2014, several cities including Shenzhen and Shanghai have launched data exchanges that allow information sets from coal trading volumes to company credit ratings to be traded.

Such efforts, however, have been considered fragmented and talk of a more unified approach has emerged in recent months.

In December, China's top leadership published an outline of how China should develop basic data systems and utilize the country's data resources. Last week, they unveiled a new plan that aims for the country to lead digital development globally by 2035. 

"In retrospect, recent developments were clearly building toward the inauguration of this new agency," analysts at Trivium China said in a note on Tuesday.

WHAT MAY THE BUREAU BE RESPONSIBLE FOR?

The plan submitted to parliament was scant on detail, saying the bureau would be responsible for "coordinating the integration, sharing, development and application of data resource" and promoting the construction of smart cities.

One person familiar with China's regulatory thinking said the new bureau will create rules for data property rights, circulation, pricing and trading, an effort that could benefit data-rich companies, at least financially, such as the big internet giants. 

Citic Securities analysts said in a note on Tuesday they believed the bureau's formation meant that "China will accelerate the development of the data factor market within the country."

Areas to watch include big data infrastructure, data processing, the digitization of government data as well as data encryption, they added.

WILL THE BUREAU HAVE REGULATORY POWER?

Analysts say no, upon first read. The bureau will be run by the state planner, the National Development and Reform Commission (NDRC), rather than the country's internet watchdog, the Cyberspace Administration of China.

"The new agency seems to be more on the 'data productivity' side, to make and develop data as a strategic strength for China," said Michael Tan, a Shanghai-based partner of law firm Taylor Wessing. "That also explains why CAC remains and this new agency belongs to NDRC."

The CAC has in the past six years rolled out new cybersecurity, data and privacy laws that govern how organizations should handle and transfer data domestically and abroad.

ARE OTHER COUNTRIES DOING ANYTHING SIMILAR?

© Reuters. FILE PHOTO: A man braving the wind walks past the Chinese flag on the Tiananmen Square, before the opening session of the Chinese People's Political Consultative Conference (CPPCC) in Beijing, China March 4, 2022. REUTERS/Carlos Garcia Rawlins

Last year, the World Economic Forum said that India, Colombia and Japan were exploring similar data exchange concepts but not much detail has been available.

Europe has raised the issue of where data is hosted and processed as a matter both of sovereignty and security and in 2020 launched cloud computing platform Gaia-X as an alternative to U.S. cloud computing providers.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.