There’s A Crisis That Is Quietly Creating New Economic Superpowers…
China intends to become a technology superpower
China’s new moves to regulate tech giants are part of a quest to become a tech superpower.
China’s recent moves to tighten regulation of giant tech companies are part of a broader quest to become tech «superpower» – experts interviewed by CNBC think so.
Like the United States and the European Union, China is developing ways to regulate the technology sector in many areas, from data protection to antitrust law. Chinese tech companies have grown, largely unregulated, to become some of the largest in the world.
And there are a number of regulations that have already entered into force or are under development..
And in October, China issued a draft personal data protection law aimed at regulating how companies process user data..
According to Kendra Schaefer, partner of Trivium China, a research firm based in Beijing, all of these regulations are part of China’s broader efforts to transform the country into a major global technology power.
«By all of this, I think China understands that if it is going to become a technology superpower … then it must lay a solid regulatory framework.», – Schaefer spoke on CNBC podcast.
«The country needs to lay a foundation for how companies are regulated, but it also needs to create a foundation in terms of data. In fact, data may be the most important regulation that needs to be established, the expert believes. – All these things are fundamental, and in fact it is just a kind of structure, a springboard from which China can develop and move forward faster».
It looks like Beijing has taken a tougher stance against the country’s tech companies lately. In November, regulators forced Ant Group, Alibaba’s financial affiliate, to suspend plans to hold the world’s largest initial public offering (IPO) while the company was engaged in regulatory changes. Last month, Alibaba and two other companies were fined for failing to fulfill their obligation to inform authorities about their past acquisitions..
But that doesn’t mean Beijing is working against its tech champions, says Emilie de La Bruyere, co-founder of the consulting company Horizon Advisory.
«These multinational technology companies are clearly the instruments of power that China uses to globally spread its information and standards strategy. And that won’t change. We will not see Beijing act with its Big Tech in the same manner as Washington does, – noted La Bruyere in an email to CNBC. – But Beijing is going to ensure that its Big Tech acts in accordance with its rules and regulations, connecting to its platforms and serving its strategies».
China is not alone in making sweeping changes in technology regulation. The European Union was arguably the most aggressive region in the world on this issue. Its iconic “General data protection regulation”, approved in 2016, aims to introduce rules for the processing of user data.
And in December, the EU introduced digital markets law and digital services law, which aim to tighten control over the behavior of tech giants in a number of areas..
The US has yet to take a similar approach in terms of legislation in areas such as personal data.
«We don’t have good data regulation in the US yet, ” said Schaefer of Trivium China. – So, we do not have the basis, those basic fundamental principles on which we can regulate not only our domestic companies, but also foreign companies. I think the lack of such a fundamental data policy is one of the reasons we take this weird, disparate approach to trying to control incoming Chinese apps like TikTok targeting specific Chinese companies because we don’t have universal regulation.».
Schaefer cited Washington’s ongoing saga of trying to get Chinese company ByteDance to sell US business TikTok.