China’s National Data Administration takes strategic move towards AI dominance

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    20th November 2023 – (Beijing) In a bid to consolidate its digital economy and regulate the burgeoning data landscape, China has established the National Data Administration (NDA), an agency indicating Beijing’s intent to set the pace in the realm of data governance standards.

    As the world closely watches the rapid growth of artificial intelligence (AI), the NDA emerges as a strategic move by Beijing to potentially surpass Western countries such as the United States. The AI implications were a focal point during a recent meeting between Chinese President Xi Jinping and US President Joe Biden in San Francisco, where they discussed the potential risks of AI and the need for improved AI safety measures.

    The NDA, under the supervision of the National Development and Reform Commission (NDRC), China’s foremost economic planner, was first announced in March. The State Council, the Chinese cabinet, detailed its responsibilities in a reform plan, which include taking over several functions from the Cyberspace Administration of China (CAC), the entity previously in charge of web regulation.

    The NDA’s primary role involves advancing China’s digital development by creating comprehensive plans, introducing unified data sharing standards, and supporting public service digitalisation. It will also serve as an intermediary among various government departments and local governments.

    Liu Liehong, ex-chairman of state-owned telecoms firm China Unicom and an IT veteran with over 30 years of experience, heads the NDA. Shen Zhulin, former deputy director of the NDRC’s hi-tech industry department, has been appointed as a deputy head.

    In a recent speech at the Belt and Road Forum in Beijing, Liu expressed that the NDA would lead the “high-standard development” of the Digital Silk Road, a technological offshoot of the Belt and Road Initiative. He also emphasised the agency’s role in fostering cooperation in digital infrastructure, smart cities, and e-commerce development.

    Despite the NDA’s data governance tasks, China will continue to prioritise data security, a domain still overseen by the CAC. This focus on security is particularly relevant in the current international context, given Beijing’s concern with potential vulnerabilities.

    The establishment of the NDA is considered a strategic move by China to optimise its vast data resources. China, which generated roughly 8.1 zettabytes of data in the previous year, second only to the US, is keen to streamline its data, which is currently fragmented across various government departments and industries. Furthermore, the digital economy, valued at around 50.2 trillion yuan ($690 billion) last year, accounted for 41.5 per cent of China’s GDP.

    Despite the digital economy’s rapid growth, issues of regulation and administration persist. A multitude of government organisations, all responsible for data governance, has led to inefficiency in management. With the NDA, China aims to address these issues and meet new challenges imposed by AI.

    China’s involvement in global data governance and the promotion of its data governance framework and standards will undoubtedly shape the global data landscape. The Global Initiative on Data Security, launched by Beijing in 2020, illustrates this ambition. The initiative has been endorsed by several nations and requires data collected locally to be stored locally to protect national security and “data sovereignty”.

    However, the NDA’s journey is not without challenges. The agency is venturing into a relatively new field in China, creating the need for caution and further clarification of its role. Additionally, access to data from other government agencies, particularly those involved in security, presents a significant challenge.

    Despite these obstacles, the creation of the NDA is seen as a critical step towards a centralised data control system in China. As the NDA’s duties include facilitating cross-border data exchange, it will be a vital department for foreign companies to understand and collaborate with.