China's data approach held up as pioneering

China's approach to data governance may significantly influence the international system as the country becomes a global rule-maker, experts said.

In a webinar hosted by the Institute for China-America Studies, or ICAS, panelists discussed China's legislative actions on data governance, which show a pivot toward a comprehensive, economic approach.

Kendra Schaefer, partner and head of technology policy research at Trivium China, said China has focused on data classification to build a framework for the data market, seeing data as the most critical resource for economic development.

"If the digital economy is one of the key engines maintaining China's forward momentum, then as we know, data is the gas that powers that engine," Schaefer told the forum, which was held on March 2.

Sourabh Gupta, a senior fellow at ICAS and leader of the discussion, compared the different approaches to data governance in the United States and China. He said the US used "a laissez-faire approach to data flows with narrow, adversary-oriented exceptions".

In contrast, China's approach is "comprehensive, concerted and state-managed", he said.

Paul Triolo, senior vice-president for China and technology policy lead at Dentons Global Advisors-Albright Stonebridge Group, said that it is important to "retain interoperability or develop new ways to interoperate between countries and regions with very different legal systems and drivers" to conduct data governance.

The US, in his view, has a "very messy system".

"We have no single US federal law that comprehensively regulates the collection and use of consumers' personal data. Congress has enacted a number of laws designed to protect individual personal information, but it uses a sectoral approach," Triolo said.

"The lack of an overarching law is complicating the US relationship with the EU over issues such as Privacy Shield (a data-protection effort between the US and the EU and Switzerland), as well as creating difficulties, as the administration addresses connected apps such as TikTok," Triolo said.

He notes that China is going its own way. "China is trying to sort of chart its own middle ground between the EU approach and the US approach," said Triolo.

China finalized its data governance regime last year by releasing the Data Security Law and the Personal Information Protection Law, setting up some basic categories for high- and medium-risk data.

"This is the big-picture economic thinking underpinning the data classification schemes," said Schaefer, calling China's move an ambitious project "that hasn't been done by any country anywhere in the world".

Denis Simon, a senior adviser to the president for China affairs and a professor at Duke University, said:"The one thing that seems to be sure is that the entire landscape of global governance and management of data have already become more challenging than we expected.

"As the emerging global rule-maker, China's bilateral and multilateral engagement on data governance is going to have a huge influence on the trajectory of other countries."

Simon agrees that China's data governance is "innovative and creative", but said he was concerned about "some challenging times ahead" as China's relations with the US and the West are "likely to remain problematic for a while".

Gupta said that he hoped "everyone perhaps can gravitate to a common platform rather than actually move out in a decoupling way on data".