China has unveiled the National Data Administration (NDA), signalling its commitment to advancing the digital economy and effectively managing its expansive and rapidly expanding data resources. Established under the National Development and Reform Commission (NDRC), the NDA aims to outpace Western counterparts, particularly the United States, in shaping norms and standards for data governance. The surge in artificial intelligence (AI) development is cited as a significant catalyst behind this move.
The NDA is tasked with overseeing China’s digital development by creating blueprints, introducing unified standards for data sharing, and supporting the digitalization of public services. It will serve as a coordinator among various government departments, fostering collaboration for efficient data utilisation. Headed by Liu Liehong, a seasoned industry veteran, the agency will play a crucial role in streamlining China’s vast and fragmented data resources, totaling about 8.1 zettabytes last year, second only to the United States (US).
The NDA’s establishment is seen as a response to the challenges posed by the rapid growth of China’s digital economy, estimated at 50.2 trillion yuan (US$690 billion) in 2022, constituting 41.5% of the country’s GDP. Currently, data regulation involves around 15 government organisations, resulting in bureaucratic inefficiencies. The NDA aims to address this by centralising data and setting standards, particularly crucial for artificial intelligence (AI) development.
While emphasising the agency’s focus on serving China’s development, a government source highlights that data security remains a top priority, distinctively managed by the Cyberspace Administration of China (CAC). The NDA’s role extends to promoting “high-standard development” of the Digital Silk Road, a technological arm of the Belt and Road Initiative, and fostering global cooperation in digital infrastructure, smart cities, and e-commerce.
Internationally, the NDA is poised to become a key player in shaping global data governance norms, presenting a formidable challenge to those advocated by the US and the European Union. The initiative has garnered support from various countries, emphasising the importance of local data storage for national security and data sovereignty.
However, challenges lie ahead for the NDA, including the coordination of policies among numerous government agencies responsible for the digital economy. The agency must also navigate relationships with powerful entities like the CAC, ensuring collaboration on data security while facilitating data exchange.
As the NDA begins its operations, it faces the intricate task of sorting out ownership of vast volumes of data generated by public institutions and private companies. Persuading entities to share their data, particularly public bodies, presents a significant hurdle. Additionally, the agency must work towards easing cross-border data circulation, making it a crucial department for foreign companies seeking clarity on data exchange rules in China.
The NDA’s establishment reflects China’s commitment to centralised data control, aligning with President Xi Jinping’s national security narrative. While the agency aims to propel China’s digital economy and AI capabilities, its success will depend on effective collaboration with existing government entities and addressing the complexities of data ownership and security.