China’s annual parliamentary meeting was held last month, “confirming President Xi Jinping for a historic third term and appointing a new batch of other top leaders, the government also approved a restructuring plan for national ministries, as it typically does every five years”, including a proposal for the creation of a new regulatory body: The National Data Administration (NDA), designed exclusively to mine data in a centralized state-run fashion to foster economic growth.  

Translation: Establishing the National Data Administration (March 2023)

According to a Chinese language primary source document, translated by The DigiChina Project (a collaborative effort to understand China’s technology policy developments, primarily through translating and analyzing Chinese-language sources and based at Stanford University, housed within the Program on Geopolitics, Technology, and Governance of the Cyber Policy Center at the Freeman Spogli Institute for International Studies).  

This short translation is an excerpt from the proposal for the reorganization of the State Council submitted to the National People’s Congress, signed by Premier Li Keqiang on March 5, 2023. It is accompanied by an “explanation” attributed to the State Councilor and General Secretary of the State Council Xiao Jie.

From the reorganization plan – translation

VIII. Establishing the National Data Administration.[1] Responsible for the coordination and advancement of building the data factor system; for overall planning of the integrated sharing and development and use[2] of data resources; for overall planning of the advancement of Digital China, digital economy, and digital society plans and construction, etc.; and managed by the National Development and Reform Commission.

Duties undertaken by the Office of the Central Commission for Cybersecurity and Informatization [i.e., the Cybersecurity Administration of China] such as researching and formulating a program for building a Digital China; coordinating the promotion of informatization in public services and social governance; coordinating the advancement of smart city construction; coordinating national important information resource development, use, and sharing; and advancing cross-industry and cross-department interlinkage and exchange of information resources; as well as duties of the National Development and Reform Commission such as overall planning for the advancement of digital economy development; organizing and implementing a national big data strategy; advancing the building of a basic system for data factors; and advancing the layout and construction of digital infrastructure; are to be assigned to the National Data Administration.

This translation includes the sections relevant to the establishment of a National Data Administration. It is based on a source document made available by NPC Observer.

From the ‘explanation’ – translation

VIII. Establishing the National Data Administration. In today’s society, information resources and the digital economy serve foundational functions in economic and social development. They are of great significance to building a new development pattern, building a modernized economic system, and constructing a superior new national competitiveness; it is imperative to strengthen the management, development, and use of data. Under the precondition of overall stability in the setup of data security, industrial data supervision, informatization development, building digital government, and other such active work; assembling the duties relevant to the integrated sharing, development, and use of data resources; the National Data Administration is to be established as a national administration managed by the National Reform and Development Commission; to plan overall the advance the planning and building of a Digital China, the digital economy, and digital society.

Duties undertaken by the Office of the Central Commission for Cybersecurity and Informatization such as research and formulation of a program for the building of a Digital China, coordinating the promotion of informatization in public services and social governance; coordinating the advancement of smart city construction; coordinating national important information resource development, use, and sharing; and advancing cross-industry and cross-department interlinkage and exchange of information resources; as well as duties undertaken by the National Development and Reform Commission such as overall planning for the advancement of digital economy development, organizing and implementing a national big data strategy, advancing the building of a basic system for data factors, and advancing the layout and construction of digital infrastructure; are to be assigned to the National Data Administration. (1) 

The NDA will be in charge of: 

• Advancing the development of data-related fundamental institutions
• Coordinating the integration, sharing, development; and
• Application of data resources, and pushing forward the planning and building of a Digital China, the digital economy, and a digital society.

In plain words, the NDA will help:

• Build smart cities in China
• Digitize government services,
• Improve internet infrastructure; and
• Make government agencies share data with each other.  (2) 

What Next? 

As reported by Zeyi Yangarchive at the MIT Technology Review:

• The big question mark is how much regulatory authority it will exert. At the moment, many different governmental groups in China have a hand in data regulation (last year, one political representative counted 15), and there is no government body that has an explicit mission to protect data privacy.
• The closest the country has is the Cyberspace Administration of China (CAC), which was originally created to police online content and promote party propaganda.
• “It makes sense to set something [like NDA] up, given how important data is,” says Jamie Horsley, a senior fellow at the Paul Tsai China Center at Yale Law School, who studies regulatory reforms in China. “But the problem anytime you try to streamline government is that you realize every issue impacts other issues. It’s very hard to just carve out something that’s only going to be regulated by this one entity.”
• For now, it seems this new department is part of an ongoing effort by the Chinese government to drum up a “digital economy” around collecting, sharing, and trading data.  
• We may not get clarity on NDA’s full scope of authority until the summer when its organizational structure, personnel, and regulatory responsibilities are expected to be put down in writing. But analysts think that it’s not likely to replace the CAC, which has risen up in recent years to become the “super-regulator” of the tech industry. 

Local Chinese Big Data Bureaus are Local Data Economies

In fact, the new national administration greatly resembles the Big Data Bureaus that Chinese provinces have been setting up since 2014. These local bureaus have built data centers across China and set up data exchanges that can trade data sets like stocks. The content of the data is as varied as cell phone locations and results from remote sensing of the ocean floor. The bureaus have even embraced and invested…the metaverse. 

Those bureaus tend to view data as a promising economic resource rather than a Pandora’s box full of privacy concerns. Now, these local experiments are being integrated and elevated to a national-level agency. And that explains why the new NDA is set up under China’s National Development and Reform Commission, an office mostly responsible for drawing broad economic blueprints for the country.

The CAC Still has Sway- with some Interesting Caveats

“Although CAC will lose a few things, its core power has not been significantly undermined,” wrote Tom Nunlist, a senior analyst on tech and data policy at the analytical firm Trivium China. Likely, it will keep exerting control in many of the areas it has been regulating for years:

• keeping big tech companies in check; 
• ramping up internet censorship; and
• scrutinizing multinational companies for security issues related to data transfer.
• But the creation of the NDA could mean CAC won’t have total reign over China’s internet. That could be a boon for transparency. Because CAC is a branch of the Chinese Communist Party rather than the government, it is subject to fewer disclosure requirements when it comes to its budgets, duties, and rule-making processes. It’s also likely to focus on policies around ideological governance and national security rather than on economic development.
• Making the NDA a government agency is a big move, given how party-centric China’s leadership is today, Horsley says: “[China is] a party-state, but the state piece of it is still very important … Of course, it’s supposed to be loyal to the party, but it’s also supposed to deliver [on economic development goals].”  (2)