Protocol | China

China is laying the groundwork to nationalize private companies’ data

New "data exchange" rules could require companies to provide data to the government and other firms.

Beijing high-rise

China's central government sees data as a means of production.

Photo: Zhijian Lyu/Unsplash

China, the land of big numbers, will soon hold the most of yet another precious resource. But unlike its huge labor force, mounds of rare earths and manufacturing prowess, this reserve — its zettabytes of data — is just beginning to be tapped.

Soon, China's central government could lean on private companies, including the country's fintech giants and foreign multinationals, to share more of their data — not just in response to one-off demands, but wholesale.

In recent policy documents, including China's 14th Five-Year Plan, released in March, central authorities have designated data as one of a small number of "factors of production" — national resources that form the backbone of the country's economy. As of April 2020, it has been considered on par with land, labor, capital and technology in its potential to generate GDP. To facilitate this, one Beijing-led initiative would ask private companies and government departments to trade and exchange data with each other.

The goal — outlined in the new Five-Year Plan — is to create digital governance and make everything from factories to cities "smart." One might envision, for example, raw materials being automatically shipped and allocated using privately-owned autonomous vehicles connected to government mapping data and IoT devices that monitor supplies at smart manufacturing facilities.

Beijing's data-trading plan has already seen the emergence of a slew of online platforms that facilitate data exchanges, as well as novel regulations that pertain to technical standards, the categorization of data in certain industries, data ownership and pricing.

This shift is in part an attempt to drive growth in China's digital sector, which is increasingly shouldering the burden of the country's economic growth, as well as an attempt to outpace innovation and standard-setting by the U.S. and Europe. China's digital economy grew 9.7% in 2020 despite the pandemic, several times the pace of China's overall GDP growth, according to the China Academy of Information and Communications Technology. It accounted for 39% of last year's total GDP, and is projected to grow an average of 15% per year, to make up more than half of China's economy by 2025.

According to Kendra Schaefer, head of tech policy at Trivium China, an analyst firm, the push to use data to fuel the Chinese economy is an overarching impetus for several major regulatory shakeups already underway in China's digital space.

One example of this development: Beijing's crackdown on Alibaba on antitrust grounds. Some industry observers have described Beijing as growing weary of the ecommerce giant's refusal to share its vast reams of consumer data with regulators. Big foreign firms like Tesla and Apple have taken heed, and are localizing data storage in response to tightened rules around data security.

"It's a huge deal," Schaefer said during an online policy workshop last month. "We're now seeing the concept [of data as a national resource] appear in almost every conversation that policymakers are having around data, across the board."

Provincial action

In response to China's drive to turn data into an economic resource, about a dozen so-called "data exchange platforms" have sprung up across the country, including in Beijing, Shanghai and Taiyuan, the capital of Shanxi province in Northern China. One, in Guiyang, capital of Guizhou province in the southwest, was set up as early as in 2014, though it now appears to be offline.

Many have backing from city or provincial governments and ministries, and at least several were set up with help from state-owned telecom providers or private corporations such as Baidu and subsidiaries of Wanda Group and JD.com.

These platforms are currently trading data on business and intellectual property registrations, corporate tax and social credit records, COVID-19 vaccination clinic locations, water collection points, judicial or traffic penalty records, foreign investments, images for AI training and audio samples from Chinese people, foreigners and even children — with some listed as "gathered from smartphones." They also offer data services such as searches of Chinese IDs or a phone's network connectivity.

Will the private sector cooperate?

Sources told Protocol that on several occasions, backers of these platforms have approached businesses, including foreign multinationals and chambers of commerce, in an attempt to recruit them. So far, they say, the response from both Chinese and foreign businesses has been tepid. Nearly all data being traded so far appears to come from government departments, not private companies. Chinese businesses Protocol reached out to all declined to comment or did not respond.

A major issue is that there isn't necessarily any means of recourse for companies if legal problems arise in the event of confusion around emerging policies or if data is misappropriated, said Jacob Gunter, senior policy and communications manager at the European Union Chamber of Commerce in China.

He cited the uncertainty companies have over China's still-emerging data governance regime, which includes 2017's Cybersecurity Law as well as the just-finalized Data Security Law and forthcoming Personal Information Protection Law.

Some critics say that these laws give Chinese authorities sweeping powers to look in on a company's data while gating off normal multinational business practices. What's more, Gunter said, the latter regulations already saw enforcement in their draft forms, which were subject to revision, creating compliance headaches for companies.

U.S. businesses that have submitted feedback regarding PIPL and DSL have "by and large" been ignored, even though the Chinese government had requested public comment, according to a senior-level commerce executive familiar with discussions between American companies and Chinese regulators, who spoke on condition of anonymity due to the risk of retaliation from authorities.

In China, regulations are often enforced even as they are being developed, and that is the case here, Gunter said. This is pushing European companies "to take a much more conservative approach to how they handle data," he added. As a result, he and Schaefer said, foreign businesses have been reluctant or unwilling to participate in the data-exchange pilots.

That will be particularly true if more granular rules, now being formulated by specialized bodies and government branches, would require private companies to forfeit ownership of certain types of data to governments, such as in the example of a draft policy for the Shenzhen Special Economic Zone in Southern China, which defines a category for "public data" to include "all kinds" of information "generated and processed by public management and service agencies while managing or serving the public." In other words, the data that private businesses create or handle could become government property.

"Potentially there could be sensitive data or trade secrets," said Camille Boullenois, a cybersecurity-focused consultant at Sinolytics, a Europe-based China analyst firm. "That could be scary for companies."

Correction: This story has been updated to reflect that data has been considered a "factor of production" since April 2020.

Protocol | Enterprise

Meta thinks it can now use smaller data sets to flag Facebook content

Despite the constant deluge of content flowing into Facebook and Instagram, Meta has struggled to get enough data to train AI to spot harmful content, so it’s banking on an emerging approach.

Meta plans to announce that few-shot learning shows promise in its constant battle to weed out disinformation or other content that violates its policies on Facebook and Instagram.

Image: Meta

After a terrorist attack on a mosque in Christchurch, New Zealand was livestreamed on Facebook in 2019, its parent company, now called Meta, outfitted London police officers with body cams while they conducted terrorism training. At the time, Meta said there wasn’t enough video data to train its artificial intelligence systems to detect and remove violent content, so it hoped the body cam project would produce more of that scarce AI training data.

A year prior to that horrific incident, the company acknowledged that it failed to keep up with inflammatory posts from extremist groups in Myanmar. Again, it said the problem was a lack of data — there wasn’t enough content in Burmese to train algorithmic moderation systems to spot more of it.

Keep Reading Show less
Kate Kaye
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign ’08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

In a tight labor market, businesses are competing for top talent, even as employees leave in droves. A record 4.4 million Americans resigned in September 2021 — the highest on record for nearly 20 years — ushering in what some call the Great Resignation. That same month, 65% of U.S. workers said they were looking for a new job.

Business leaders have to respond to mitigate the negative impacts of this disruptive churn, with 36% of CFOs saying they're very concerned about turnover remaining high indefinitely and weighing on revenue growth. The answers to this challenge should be informed by the root causes of employee dissatisfaction as well as retention drivers.

Keep Reading Show less
Suneet Dua, PwC
As PwC’s US Products & Technology Chief Revenue and Growth Officer, Suneet Dua is responsible for driving more than $1 billion in product revenue and executing PwC’s product revenue strategy. He’s focused on driving innovation, delivering world-class, forward-thinking products and digitally upskilling the workforce and society at large. With 20+ years of technology, media and entertainment industry experience, he’s positioned as a catalyst for organizational transformation and delivers on the firm’s promise to solve the world’s most important problems. Additionally, he launched Salesforce and client-focused centers of excellence, such as our Cybersecurity centers in Israel, Singapore and India––all to improve the way PwC serves its clients. During his tenure as US Chief Product Leader, Suneet, and his team, played a critical role in designing and implementing digital tools that upskilled more than 55,000 of its US employees, which led to the development of PwC’s digital learning platform, ProEdge, that addresses the digital skills gap crisis facing today’s workforce. He also serves as a board member of PwC’s Trifecta Consulting (US, China, Japan and Mexico). Previously, Suneet served on PwC’s US leadership team and was Global Client Market Leader for PwC’s Global Network.
Protocol | Workplace

What will work look like in 2022? Glassdoor makes four predictions.

Tech companies will continue to have trouble hiring workers.

According to a report from Glassdoor, local companies will also have to pay more to compete with companies that are offering San Francisco or New York rates to remote workers.

Photo: MoMo Productions/Getty Images

2021 was a difficult but pivotal year for tech workers and employers alike. We’ve got mixed news: 2022 will likely continue to be difficult but perhaps a little more, well, precedented.

Glassdoor released four predictions for the workplace of 2022 Wednesday based on data it gathered from reviews, salaries and conversations happening on its site, as well as economic trend data. Here’s what the career platform sees in the workplace crystal ball.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at mma@protocol.com.

Protocol | Enterprise

COVID-19 kickstarted a war over web accessibility

The pandemic spurred demand for a more accessible web, but experts and practitioners disagree on the best approach to get there.

Experts and practitioners disagree on the best approach to building an accessible web.

Image: alexsl/Getty Images

The pandemic triggered a surge in demand for technology that helps companies adapt their websites for users with disabilities as businesses scrambled to accommodate customers who were now forced to do almost everything online.

This period gave a boost to companies such as AudioEye, EqualWeb and Deque, which offer accessibility services like alternative text that describes images for visually impaired users. But it also sparked a war over the best way to build a more accessible web, with one side arguing the fastest way to achieve change is to put accessible overlays onto existing sites, and the other arguing the web will never be truly accessible until developers build it that way from the start.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporting fellow at Protocol, based out of Los Angeles. Previously, she worked for Ernst & Young, where she researched and wrote about the future of work, emerging technologies and startups. She is a graduate of the University of Southern California, where she studied business and philosophy. She can be reached at acounts@protocol.com.

Hirsh Chitkara

Hirsh Chitkara (@ChitkaraHirsh) is a is a reporter at Protocol focused on the intersection of politics, technology and society. Before joining Protocol, he helped write a daily newsletter at Insider that covered all things Big Tech. He's based in New York and can be reached at hchitkara@protocol.com.

Latest Stories
Bulletins