By Zhang Lijuan

The National Data Administration was officially unveiled in Beijing on October 25,2023.(VCG)

China establishes National Data Administration to unleash the potential of a promising market

The National Data Administration(NDA) was officially unveiled in Beijing on October 25.The new organization is responsible for advancing the development of data-related fundamental institutions,coordinating the integration,sharing,development,and application of data resources,and facilitating the planning and building of a Digital China,the digital economy,and a digital society,among other tasks.It is administered by the National Development and Reform Commission,the country’s top economic regulator.

Reasons

The NDA has drawn widespread attention since plans for its establishment were announced this March as part of the Party and State institutional reform,leading to heated discussions on the reasons for its establishment.

“The establishment of the NDA is a response to the needs of the digital economy and constructing a data factor market,” said Wu Shenkuo,a doctoral tutor at the College for Criminal Law Science and Law School of Beijing Normal University and deputy director of Research Center of the Internet Society of China.“The move is also intended to promote the establishment of a long-term mechanism for the strategy to construct a Digital China as a toplevel design and align with the trends of global governance on data-driven development.”

China’s digital economy has entered a stage of deepening application,standardizing development,and sharing benefits.Thus,developing a data factor market and unleashing the value potential of data factors are of strategic importance for strengthening,optimizing,and expanding China’s digital economy.It is a holistic and systemic project.

“The establishment of NDA is a major initiative to meet the laws and requirements of the digital economy and accelerate the cultivation of a national data factor market by promoting data resources management,building basic systems for data,constructing the application system,and facilitating international cooperation,” said Gao Yingmai,director of the Digital Transformation Research Office at the Institute of Information and Software Industry of China Center for Information Industry Development (CCID).Gao predicts the NDA to boost the development of the digital economy,particularly in terms of system guarantee and application promotion.

In terms of system guarantee,the NDA,as the leader in building a national data factor market,is obliged to strengthen the construction of basic systems for data,create a standardized,orderly,and safe market environment,and promote the circulation and utilization of data elements.In terms of application promotion,the NDA will take the lead in promoting the construction of a unified working system from the central to the local level,integrate and deploy resources and tasks that were previously scattered among various competent departments,and coordinate the development of major application projects and key areas to foster synergy in digital economic development.

Unlike traditional factors of production such as land,capital,and labor,data is confronted with difficulties in terms of development and governance,opined Wu Hequan,academician of the Chinese Academy of Engineering.For example,its reproducibility and immunity from damage can lead to difficulties in defining the property rights of the data and the boundaries of security management.The establishment of the NDA seeks to advance technological innovation,utilization,and governance of data factors to contribute to the construction of a Digital China.

The Digital China Development Report (2022)released by the Cyberspace Administration of China showed that China’s data output increased 22.7 percent year on year to 8.1ZB in 2022,accounting for 10.5 percent of the global total and ranking second in the world.

Primary Tasks

China is the first country in the world to classify data as a factor of production.Enabling a huge data volume to play a significant role in productivity requires removal of many barriers hindering the development of the data industry in terms of asset ownership,circulation and trading,as well as security and privacy,which will largely rely on the functionality of the NDA.Elaborating on the functionality and main tasks of the new organization,Wu Shenkuo pointed to accelerating the establishment of rules and regulations concerning basic systems for data,optimizing law enforcement related to the flow and utilization of data,improving the governance and compliance of data elements including public data,and fostering welcoming environments for the governance of the data ecosystem.

According to CCID President Zhang Li,in the current context,the primary tasks of the newlyfounded NDA are building basic systems for data,establishing a system of rules for the era of the digital economy,striking a balance between data compliance and data value realization,and tackling the difficulties in unleashing the potential of data elements,with an aim to coordinate the planning and construction of a Digital China,the digital economy,and a digital society from the national level and promote the standardized and efficient development of the digital economy.

The Global Digital Economy Partner City Cooperation Initiative is launched at the Global Digital Economy Conference 2023 in Beijing on July 4.(TIAN YUHAO)

In fact,many Chinese provinces and cities have already established agencies performing big data management,but a lack of unified deployment at the national level has caused difficulties in coordinating data elements across departments,industries,and regions,restricting the healthy development of China’s data management and application.

“The NDA will focus on the governance and exploitation of data resources and promote the planning and construction of a Digital China,the digital economy,and a digital society through top-level design and institutional coordination,”said Gao Yingmai.“Establishing basic systems for data,promoting the development and utilization of data resources,and advancing international cooperation in the digital economy will be high on the agenda.”

For starters,the NDA will establish rules and regulations to facilitate the construction of a nationally integrated market system for data factors and clarify the detailed programs and implementation rules for data validation,asset evaluation,revenue distribution,compliance transactions,and crossborder circulation to promote orderly circulation of data,Gao said on the three main tasks.

Second,to revitalize the market for the development and utilization of data resources,the NDA will focus on concurrently developing digital industrialization and industrial digitization,coordinating the deployment of major projects,pilot demonstrations,and regional development of the digital economy,promoting data application innovation,and stimulating new momentum for the digital economy.

And third,the NDA will collaborate with relevant departments to build platforms for international cooperation on the digital economy.It will make joint efforts with the government,companies,and non-governmental organizations to facilitate the establishment of bilateral and multilateral cooperation mechanisms and platforms in areas such as infrastructure,digital trade,digital transformation,and smart cities.

Market Potential

Today,the digital economy has become an important engine for economic growth in countries around the world,and its role is even more prominent in driving the national economy in China.The Digital China Development Report (2022) released by the Cyberspace Administration of China showed that China’s data output increased 22.7 percent year on year to 8.1ZB in 2022,accounting for 10.5 percent of the global total and ranking second in the world.Industry analysts suggest that deepening the reform of marketoriented allocation of data elements will cause the scale of China’s data elements market to range between 500 billion yuan (US$68.59 billion) and 1 trillion yuan (US$137.19 billion) during the 14th Five-Year Plan period (2021-2025).

“In the era of the digital economy,data is as indispensable to the survival and growth of enterprises as oil is to industry,” said Wang Jiandong,deputy director of the Price Monitoring Center of the National Development and Reform Commission.“A one-trillionyuan data element market means tremendous opportunities,and the key to tapping the opportunities is to establish a ‘closed loop’ of data registration,evaluation,valuation,and asset documentation policies.” From a short-term perspective,the basic systems for data will facilitate a data trading market of 300 billion yuan (US$41.16 billion) to 500 billion yuan (US$58.59 billion);from a medium-to long-term perspective,the potential market size for data assets can top 60 trillion yuan(US$8.23 trillion).An abundance of data resources is undoubtedly wealth,but fulfilling potential is no easy task.Careful consideration is needed to determine how best to utilize massive data resources.

Zhang Li attributed the challenges of the digital economy such as data validation,data circulation,and data security to imperfect institutional mechanisms in operation as a result of mismatch between productivity and production relations.He said that the newly-established NDA will supervise and coordinate data resource management at the national level.Focusing on the development and utilization of public data and data application in key areas,it will work to strengthen data compliance supervision,enhance data awareness and data management service capabilities,create a data industry ecosystem,and promote the development of a data factor market.

“The official operation of the NDA will add a strong impetus to the construction of a Digital China and the cultivation and improvement of a data factor market,”Wu Shenkuo added.

Minsheng Securities analysts suggested that continued policy improvements would foster more future benefits in terms of data governance,data validation and principles of use,authorized operation of public data,and key industry data elements usage and that leading companies’explorations of relevant models and pilot demonstrations would likely lead the data element industry to a period of accelerated development.