China Plans to Create New Regulator for Data Governance

China Plans to Create New Regulator for Data Governance
Photo: 07.03.2023 135

China is set to create a new government agency to centralize the management of the country’s vast stores of data,The Wall Street Journal (WSJ) reported. The new agency will be discussed and approved at the National People's Congress during its annual session on March 13.

According to the WSJ, the new regulator would set and enforce data-collection and sharing rules for businesses and decide whether multinational companies can export data generated by their operations in China.

In addition, the new agency would be tasked with identifying cybersecurity vulnerabilities as well as various digital issues, such as the use of software algorithms to manipulate data or encourage internet addiction in minors. All of these issues are now handled by different PRC agencies, making it difficult for the government to control the field. 

The request for more centralized data management is long overdue: China is blocking IPOs due to cybersecurity issues, is negotiating hard with the PCAOB on disclosure of audit reports, and is tightening checks on data exports, says Maria Belyaeva, expert at the BRICS Competition Law and Policy Centre.

"For sure, the new regulator will also deal with the regulation of AI: for example, many Chinese companies have now started to develop ChatGPT analogs, but the issues of such programs' data handling, their subordination to censorship, etc. remain unresolved," 

says Maria Belyaeva.

She emphasizes that the status of the new agency is still unclear: It is assumed that it will be similar to the National Antimonopoly Bureau (the sub-ministerial level). However, although the bureau was established late in 2021, its field of activities is still not clearly delineated from the tasks of market regulator SAMR. All three departments of the National Antitrust Bureau (abuse and anticompetitive agreements, review of M&A applications, international cooperation) are officially listed as part of SAMR's structure. 

In any case, to find out more details about the new regulatory structure, we will have to wait until the end of the ongoing session of the National People's Congress, the expert says.

digital markets  China 

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