Data is the oil of the 21st century. This sentence has been repeated so often that we no longer even wonder about its relevance. However, data is by no means scarce. Worse, they quickly expire. If we had to find them a raw material for comparison, they would be sand. Very abundant, it can be made into deserts as well as glass, concrete or silicon wafers. Beyond their capture, what matters is their treatment and conservation. It is on this ground that the new data war is being played out. And its advanced front is in China.
Last fall, the whole world was surprised by the disappearance of Jack Ma, the iconic founder of Alibaba, for three months. The wildest speculations have run. The data war provides us with a reading grid. To put it coldly, China’s political power fears that the tech giants will use their huge reservoirs of personal data to build alternative centers of power. This is how the financial regulator rejected, at the end of last year, the planned IPO of Alibaba’s financial subsidiary, Ant Financial. This listing will take place in November 2021, but on a valuation of 120 billion dollars against 360 billion initially. The company is now regulated like a bank, with reinforced capital requirements, but will above all have to share its data, starting with social credit data.
The reality of Chinese social credit
To demystify the latter, we must understand that three parallel initiatives coexist in China: a blacklist of bad payers, creditors or fraudsters, maintained by the central government, ie 3 million people; some are prevented from taking the plane or the high-speed lines; experiments, in forty cities, of ratings which vary according to your good or your bad deeds, only two of them providing for sanctions in return, the others offering only rewards; and, finally, a financial credit – as it exists in the United States with the Fico Score – which measures your solvency. The most influential of these programs, Zhima Credit, was developed by Ant Financial. Each user is rated between 350 to 950 points, based on their credit history, expenses, assets, behavior and social relationships, using data from the Alipay payment application. Its impact remains limited, it allows to benefit from advantages from partner companies, such as exemption from deposits when renting a car, but its holistic nature interests the State.
Limited offer. 2 months for 1 € without commitment
This offensive is enabled by two laws, one passed this month and the other under discussion, which puts almost all data-related activity under government scrutiny, relying on the cybersecurity requirement. The companies concerned are domestic, but not only. As early as 2017, Apple made a commitment to store all of its customers’ cloud data in China. So is electric car maker Tesla, which last month made public its decision to build data centers in China in order to keep the information generated by the vehicles it sells inside the country.
One problem, three solutions
To follow the analysis and decryption wherever you are
Download the app
At the same time, the Chinese are increasingly concerned about the confidentiality of their private data. A survey conducted by the Nandu Personal Information Protection Research Center in Beijing in late 2019 showed that nearly 80% of respondents were concerned about the leaks. The Beijing government has decided to respond to this growing demand. A bill on the protection of personal information, modeled on the European Union’s data protection regulation, will limit the types of data that private sector companies can collect. At the end of May, the regulator called to order 105 Chinese or foreign applications. A logic of predominance of the State over private entities therefore appears, different from other blocs.
In the United States, privacy protection is primarily conceptualized as protection against government activities, with consumer-business interactions being regulated by contract. The European Union, for its part, has decided to adopt a high level of data protection from both private entities and the government because this protection is a fundamental right of its legal system. The competition between these governance models will escalate as different countries ask themselves the question of data management.
Diplomacy in all its forms