Zhejiang province approves China’s first local law focusing on the digital economy

Coco Feng
·3-min read

Legislators in China’s eastern Zhejiang province, home to tech giants like Alibaba Group Holding and NetEase, have introduced regulations dedicated to the development of the digital economy in the first such regional law for the burgeoning industry.

Titled “Regulations of Zhejiang Province on Promoting Digital Economy”, the document lays out guidelines for the development of data sharing, digital infrastructure and the digitalisation of its industries. The law, which takes effect in March 2021, also clarifies how city governments in Zhejiang should handle data collected by city-level administrative agencies.

The legislation was hailed by tech leaders as a milestone for “governing the digital industry according to the law”.

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It will “fully activate governments of all levels to ensure and boost the development of the local digital economy,” said James Tian Ning, chairman of Hangzhou-based cloud company Panshi Group, adding that he expects more regions in China to roll out similar regulations.

In particular, the law focuses on data as regulators worldwide are seeking a balance between privacy and data sharing.

Alibaba’s home province vows to bring progress to platform economy

The regulation states that local authorities are responsible for the accuracy of public data they collect, and that they must ensure open access in a secure, convenient and efficient manner, and encourage corporations, social groups and individuals to share their own data resources through collaboration and the implementation of new policies.

Zhejiang’s new regulations come amid a countrywide focus on data and digital infrastructure. In July, the central government issued a draft of its Data Security Law which builds on the existing Cybersecurity Law and spells out technical requirements for data protection and rights and responsibilities of different stakeholders and regulators.

In October, the draft of the Personal Information Protection Law was released, proposing limits on how personal data is collected and used and significantly increasing penalties for companies responsible for data breaches.

More recently, on Monday four central government authorities, including the Cyberspace Administration, issued new guidelines to build an “integrated national big data centre and innovation system”, calling data a “national fundamental strategic resource and important production element”.

The digital economy has been Zhejiang province’s calling card for over a decade. The capital Hangzhou is headquarters for big names including South China Morning Post owner Alibaba, its affiliate Ant Group and entertainment giant NetEase.

The province is also a leader in data-driven governance. In February, Hangzhou was the first to adopt a QR code system to help track the whereabouts and health conditions of residents amid the coronavirus outbreak, a model that was later expanded nationwide.

“Data is the most precious resource for companies, but it is also a challenge if it is leaked, stolen or abused,” said Tian, who added that he believed it was important to clarify the rights of corporations and institutions when it comes to data, and have them ask for consent if they collect and process personal data.

Zhejiang is also taking a lead in confronting the power of Big Tech. On Monday, the provincial Communist Party leadership vowed to bring a “new stage of development” to the internet platform economy, answering a call from Beijing to break up monopolies and tame capital expansion.

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