As China deepens the commercialisation of its vast troves of data, the United States needs to develop its own national data strategy that treats data as an economic asset to better position itself to prevail in emerging technologies such as artificial intelligence and robotics, a key US congressional advisory body has said.
In a report published on Tuesday, the US-China Economic and Security Review Commission (USCC) warned that the US risks ceding global leadership in setting global data standards to China, which would give Chinese firms an advantage over their US counterparts in industries where data is a central pillar of development.
“Standards are difficult to revise once adopted,” the report said. “Engaging now would be more effective than seeking to unwind an established standard later.”
In 2020, Beijing designated data as a key factor of production, elevating the resource to a core strategic asset at the centre of the country’s economic, industrial and military development.
Since then, China’s data economy has begun to “flourish” through the establishment of thousands of data exchanges nationwide and the introduction of pilot programmes that treat data as a resource to be shared and traded, the report said.
It described Beijing’s approach to data as the same “top-down” industrial policy approach that has made China a leader in other industries such as advanced manufacturing.
“Rather than leaving the development of a data economy up to market forces, China is building infrastructure where participants can exchange data – fostering third-party services like data valuation, analytics, and financing and encouraging wider participation in the data economy,” the report said.
“[The] mandate to build a data market and leverage data as a productive resource coexists with a regulatory framework that ensures state access, limits foreign control, treats a wide and morphing range of data as sensitive to national security, and censors politically contentious data.”
The report warned that China’s more developed national data strategy also benefits its firms in the fiercely contested spheres of AI and robotics.
As AI developers globally exhaust the open web as a source of data to train cutting-edge AI models, private data held by firms and institutions is becoming increasingly valuable.
In the US, leading AI companies such as Anthropic are spending tens of millions of dollars acquiring physical books to scan and turn into new training data, according to court filings reported by The Washington Post in January.
Meanwhile, Chinese researchers and scholars are calling for greater coordination to increase the availability of Chinese-language data sets, amid a global data ecosystem still overwhelmingly dominated by English-language data.
“China’s commercialisation push is aimed at these categories, which is what distinguishes it from general data accumulation,” the report said, highlighting the country’s early focus on promoting data sharing among public and private actors in robotics.
Established by the US Congress in 2000, the USCC is an independent panel that advises lawmakers on the national security implications of the US-China economic and trade relationship.
Its latest report warns that US firms seeking to participate in China’s emerging data economy risk running afoul of China’s “strict” data regime, amid growing Chinese national security concerns.
“US firms are increasingly in the dark about where the boundaries lie between permissible commercial activity and information falling under the national security umbrella,” the report said.
