China will speed up the building of a market for data, dubbed the new oil of the digital economy, so that it can be priced and traded like regular commodities, according to a detailed plan that lays out how the country wants to build a modern market system of “high standards”, released by Beijing on Sunday evening.
While the plan does not specify who owns the data, what kind of data can be traded or what the trading mechanism will be like, last year Beijing listed data as a new production factor, along with land, labour, capital and technology.
At the time, Shenzhen was asked to take the lead in establishing data trading. However, the issue turned out to be so complicated that data regulations drafted by the city last summer, which attributed the ownership of personal data to individuals and public data to the state, triggered huge controversy.
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After the solicitation of opinion ended in August, the draft was submitted to Shenzhen’s legislature for approval but it remains under discussion.
Under Sunday’s new action plan, issued by the ruling Communist Party and the State Council – China’s cabinet, authorities will study ways to accelerate the formation of a data market and create norms on data property rights, trading, transmission and security.
Authorities will also draw up a list of responsibilities to strengthen the sharing and exchange of data among regions and government departments. China is expected to actively participate in the formulation of international rules and standards on data, according to the plan.
Beijing’s exploration in making data a new tradeable asset can have far-reaching implications for China’s technology companies, which have accumulated huge volumes of user data based on which business decisions are made and new services are developed.
Besides data trading, the government also laid out its plan to promote the trading of intellectual property rights (IPR), as well as scientific and technological research findings.
The China Technology Exchange in Beijing, along with the Shanghai Technology Exchange and Shenzhen Stock Exchange, will carry out nationwide trading of IPR and licenses, according to the document.
China has been stepping up its protection of intellectual property as the country aims to achieve breakthroughs and lead the world in science and technology. The issue has been a central focus in Beijing’s ongoing trade war with Washington, with the Trump administration accusing China of stealing American tech secrets and forcing US companies to transfer critical technology to Chinese partners.
One challenge that Beijing is trying to overcome is the commercialisation of scientific and technological knowledge originating from academia. To encourage input, authorities plan to grant researchers permanent ownership and long-term use of the rights to their achievements.
China urgently needs to shift its focus on IPR pursuit from quantity to quality, said Liu Wenjie, a law professor at the Communication University of China. “With China’s transition to a middle-income economy, economic and social development is increasingly dependent on innovation.”
“China’s intellectual property trading market has not been fully cultivated, and trading methods and trading platforms are relatively lacking, causing many inventions and innovations to stay on the shelf … The technologies will need to be commercialised in the market to fulfil their real values,” he said.
Meanwhile, China will also accelerate investment in “new infrastructure”, including telecommunication projects in areas such as 5G, internet of things (IoT) and industrial internet, according to the plan. Other areas of tech investments include artificial intelligence (AI), cloud computing, blockchain and data centres.
By the end of last year, China was home to the world’s largest 5G network with about 720,000 5G base stations, according to the latest data from the Chinese Ministry of Industry and Information Technology (MIIT). The country now has at least 200 million 5G-compatible devices, including smartphones, and 1,100 5G-enabled industrial internet projects, MIIT officials said last week.
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