China, with around 1 billion internet users and a vast surveillance network, is fast becoming the biggest part of the “datasphere.” One projection by Seagate a few years ago estimated the nation’s annual data generation would reach 48.6 Zettabyte (ZB) by 2025, or nearly 28 per cent of the global total, Nikkei Asia reported.
The Chinese Communist Party (CCP) and President Xi Jinping are moving to tighten their grip on that data and capitalize on it economically as part of an overhaul of state and party institutions that is likely to change the way China operates for the foreseeable future. Beijing unveiled its plans for stronger control over not only data but also technology development, finance and society as its annual rubber-stamp parliament session. Taken together, the reforms appear designed to further concentrate power in Xi’s hands as he begins his third term as president, Nikkei Asia reported.
Many of the moves are an extension of the power consolidation seen since Xi took office in 2012. They signal Beijing’s priorities in the face of increasing pressure from US export restrictions, risks to financial stability and slowing economic growth.
For decades, China’s bloated state institutions had undergone restructuring every five years alongside changes in the government to bring them up to speed with the modern state and economy. But under Xi, the reforms have typically granted the CCP more muscle. The latest restructuring includes a raft of new entities, such as organizations to oversee China’s financial sector; a CCP-led commission charged with ensuring technological self-reliance; a national data bureau to promote the country’s digital economy; an agency to engage with the general public; and another agency to administer Hong Kong and Macao.
Xi has repeatedly called for reducing dependence on foreign tech, clearly feeling the squeeze from US restrictions on the supply of advanced computer chips to China. To counter this, the CCP will lead a central science and technology commission.
Experts likened the initiative to China’s quest for nuclear weapons, which made it the first Asian nation to successfully test an atomic bomb in 1964.
“The formation of the central science and technology commission means Xi is using the same model as Mao [Zedong] when China possessed nuclear capabilities in the 1960s,” said Deng Yuwen, former editor of the CCP Central Party School’s journal Study Times. The main idea, he said, is “mobilizing nationwide resources to achieve breakthroughs.”
“From Xi’s perspective, if he doesn’t consolidate power, it will be difficult for him to accelerate projects that he prioritizes,” experts say.
The growing trove of zettabytes is seen as another means to gain a global edge.
In recent years, Beijing has introduced laws on data security and personal information protection. Now it believes it is sitting on an economic gold mine. There is little doubt that the digital economy is a bright spot for China. The sector’s growth rate far exceeds that of the gross domestic product.
In 2021, China’s digital economy reached 45.5 trillion yuan (USD 6.6 trillion), double the size in 2016, according to the China Academy of Information and Communications Technology, a government research institute.
It will be up to the new national data bureau to capitalize on this by coordinating the sharing and development of the country’s ever-swelling stockpile of digital information. And it is a critical job, as China looks for a new growth engine to compensate for slower overall investment, consumption and exports.
Before the central bureau was proposed, China saw the creation of dozens of so-called “big data bureaus” or “big data management centres” at the local government level. It is not clear how they will be merged or managed once the new entity is formed. Authorities did say that some staff from the top online watchdog, the Cyberspace Administration of China, and the key economic planner, the National Development and Reform Commission, will be shifted to the bureau.
Another economic project that has caught investors’ attention is the centralization of China’s financial regulation. A new National Financial Regulatory Administration will take over some responsibilities from the banking and insurance regulator, portending stricter oversight.
Observers view the move as a way to streamline the bureaucracy and reduce financial risks at the local government level.
Two new party bodies will also keep an eye on the financial sector, a central financial commission and a central financial work committee, both of which will be responsible for strengthening the roles of ideology and the party in China’s overall financial system.
Beijing’s top office that oversees Hong Kong will be restructured into a new body that reports directly to the CCP.
The new entity, referred to as the Hong Kong and Macao work office of the CCP Committee, will give it more direct control over the cities’ affairs than the executive State Council.
The reform announcement stressed the committee’s mission to “safeguard national security, guarantee people’s livelihoods and well-being, as well as support Hong Kong and Macao to integrate into the national development plan.”
It is not only in Hong Kong that the party seeks to cement that ideology and prevent social unrest. Political commentator Lau said the CCP is concerned about widespread instability as the economy slows, the population greys and geopolitical pressures rise. Discontent is already simmering in China.
