With opening up, data emerges as a challenge

Source:Global Times Published: 2019/3/26 19:03:40

Illustration: Liu Rui/GT

Editor's Note:

The Center for China and Globalization (CCG) and the Hinrich Foundation released a report "The Digital revolution: How China can capture the digital trade opportunity at home and abroad" last week. The definition of "digital trade" in this study covers "the production, distribution, marketing, sale or delivery of goods and services - domestically and abroad - supported by cross-border data flows." According to the report, digital trade has created significant economic benefits and enabled many Chinese firms access to overseas markets. The Global Times selected opinions of four experts present at a roundtable discussion.

Ouyang Cheng, director of Ali Cross-border E-commerce Research Center of Alibaba Group

In the domain of digital trade and digital economy, China provides the world three great opportunities. The first is China's huge market. 

Currently, China is the second largest consumer market. There are 10 Chinese cities among the top 100 global consumer centers. It is predicted that in 2019 China will surpass the US to become the biggest retail market in the world. 

Second, China is opening itself more with measures like setting up the Shanghai free trade zone and passing the foreign investment law. Building over 30 comprehensive cross-border e-commerce pilot zones also shows renewed focus on opening-up. 

Third, China is undergoing a rapid digital transformation in both domestic and international trade. According to McKinsey Global Institute, in 2017, China accounted for 42 percent of global e-commerce market. With the potential to be the largest consumer market across the world, in the near future, over half of e-commerce transaction may take place in China. 

Both industries and the government are pushing for a rapid digital transformation. Most of top 500 global companies enter China by the means of digital trade, such as via the Alibaba platform. 

By directly connecting Chinese consumers, digital trade helps these traditional overseas brands realize digital transition. These companies know Chinese consumers through digital trade so that they can innovate in their products. 

We predict countries and regions like India and the Middle East would be rapidly growing markets in digital trade. China's today may be their tomorrow. If digital trade succeeds in China, it will also be successful across the Asia-Pacific region.

We are aware that digital trade is a trend and it can bring values for all. We should be more proactive to embrace it. Furthermore, we should offer assistance to developing countries, narrowing their gap to develop digital trade. 

Moreover, policies on digital trade should be driven by market, based on consumers' demands. 

We also have to keep the flexibility of relevant laws and policies. Digital trade differs from traditional trade in the industrial age, as it is changing fast, including its technological innovation and business model. 

Peng Lihui, secretary-general of China Electronics Chamber of Commerce

Since the EU proposed the General Data Protection Regulation (GDPR), which aims to protect data and privacy for all people in the EU and the European Economic Area, in the field of cross-border data flows and privacy protection, many countries tend to be more conservative. We agree with the claims in the GDPR on protecting privacy. If firms violate the terms, they would face a penalty. However, this will restrict the innovation of digital companies. 

When we communicated with the US in Washington, we shared our concern on this issue. The common idea of both China and the US is to encourage firms to transform. In the future, we need to provide an enabling environment to encourage companies to innovate. We have to explore some approaches on how to grasp the freedom of cross-border data flows.

Xu Chengjin, PhD at the Institute of Economy, Trade and Law, Center for International Economy and Technology Cooperation, Ministry of Industry and Information Technology

How the government should collect, use and protect data is a tough challenge for China in data management.

From the perspective of digital trade and digital economy, almost every country hopes data could flow into it, as it's a crucial means of production. When delivering the Government Work Report on March 5, Premier Li Keqiang emphasized opening up based on rules and related institutions. How would such opening-up manifest itself in terms of data governance?

Some criticism against China from abroad involves rules such as the challenges Huawei is facing. Foreign countries suspect how the Chinese government uses and protects data or whether the government would share the data with intelligence departments. 

According to China's laws, there are terms on restraining the government's moves on using data. For example, Article 30 of China's Cybersecurity Law says, "Network and Information Department and relevant information acquired in the performance of network security protection responsibilities, only for the need to maintain network security, shall not be used for other purposes." But related laws tend to be lax and China has not made them effective.

Wang Huiyao, CCG president 

China has entered the era of big data. The country will have plenty of opportunities in this field. In the meantime, many international challenges that China is confronting, such as the experience of Huawei, are related to this domain.

Companies involve flow of capital, goods, and talent. Data can flow as well. With more than 1 billion smartphone users, China has great benefits to explore. Data can be like China's new "gold mine." 

I just wonder whether all data should be protected and whether we can share some. I think we could be more open toward this issue.

Posted in: VIEWPOINT

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