China to form a national bureau to manage its troves of data

National People's Congress opening session in Beijing
Chinese President Xi Jinping and other officials applaud at the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China March 5, 2023. REUTERS/Thomas Peter

SHANGHAI, March 7 (Reuters) - China will form a national data bureau that will be responsible for coordinating the sharing and development of the country's data resources, according to a plan submitted on Tuesday to parliament.

The proposed bureau will be administrated by the state planning agency, the National Development and Reform Commission (NDRC), the plan said.

Certain functions of the NDRC and the Office of the Central Cyberspace Affairs Commission, which oversees China's internet, will be transferred to the new bureau whose tasks will include promoting smart cities and the exchange of information resources across industries, it added.

"In today's society, digital resources and the digital economy play a fundamental role in economic and social development, and are of great significance for building a new development pattern, building a modern economic system, and building new advantages in the competition between nations," the plan said.

China has in recent years strengthened oversight over data collected in the country, motivated by fears that unchecked collection by private firms could allow state actors to weaponise information on infrastructure and other national interests, and the belief that data has become a strategic economic resource.

This has included issuing a series of new laws that require organisations with large user bases undergo assessments and obtain approvals when handling data. Some firms are struggling with a deadline requiring them to seek approval to export user data.

One source at a large Chinese tech firm said the initial impression from the plan was that the bureau would be mainly tasked to cultivate the data market and that regulatory functions would continue to sit with bodies such as the Cyberspace Administration of China.

Alfredo Montufar-Helu, head of think tank The Conference Board's China Center, said having one single agency in charge should help address inefficiencies arising from overlapping jurisdictions between agencies and ministries.

This "has been one of the key issues affecting regulatory compliance in China, and which authorities have tried to address over the past years," he said.

But a one-size-fits all solution could be challenging as other large markets have shown, said Alex Roberts, a Shanghai-based lawyer at Linklaters.

"Multinationals will no doubt want to understand how a centralised data regulator will interface with overseas stakeholders."

Reporting by Brenda Goh and Zhang Yan in Shanghai, Eduardo Baptista in Beijing, Josh Ye and Julie Zhu in Hong Kong; Additional reporting by Josh Horwitz; Editing by Andrew Heavens and Raju Gopalakrishnan

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