The Surfacing of China’s Big-Data Ecosystem
The adoption of Big Data technology in China is forging ahead at break neck speeds. According to the China Institute of Information Technology, China’s core Big Data industry has averaged yearly growth rate of 38% for the last 5 years. That Big Data has become a national priority is hardly surprising for a country that generates more data than any other in the world, meanwhile is doubling down on new drivers of supply-side reform, for which Big Data is a new engine. Beijing’s strategic positioning of the sector reflects leadership’s understanding of its potential to create opportunities for reshaping China’s national competitive advantage, and perhaps even find a new path of governance along the way.
What’s different about China’s approach to Big Data is not only the strong top-down push to accelerate the sectors development in China (reflecting Beijing’s enthusiasm for tech-related sources of innovation), but also strong emphasis on experimentation and new and unique approaches, on top of the enormous data reserves. Government departments and state institutions are sitting on large amount of data (data silos) — waiting to be unlocked. Finally, China’s late-mover advantage that translated into broad market smartphone usage is paying dividends in the data ecosystem.
Having briefly covered the broader motives and drivers that incentives that drive the Chinese government’s data-related policy making, this article will examine the more specific objectives and policies deployed by Beijing.
From Factor Driven to Innovation Driven Development
Since “Big Data” was first written into the government work report in March 2014, a series of general and big-data specific regulations and have Chinese government has released a series of policy documents to promote the development of Big Data, including “Opinions on Strengthening the Services and Supervision over Market Entities by Means of Big Data Analysis” 《关于运用大数据 加强对市场主体服务和监管的若干意见》and “Action Outline for Promoting the Development of Big Data”《促进大数据发展行动纲 要》both released in 2015. Also tying in with Premier Li Keqiang’s “Internet Plus” five-year roadmap to integrate cloud computing, big data and the Internet of Things with a variety of industries from manufacturing to commerce. The application of Big Data also runs through Made in China 2025, the government’s blueprint for the manufacturing sector.
In March 2016, Big Data was elevated to national strategy level and designated a fundamental strategic resource’ (基础性战略资源) in the Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China 《中华人民共和国经济和 社会发展第十三个五年规 划纲要》. As part of this, Big Data is listed as one of the eight key informatisation projects and proposed the promoting the opening up and sharing of data resources.
The significance of raising Big Data to a national strategy:
- Top level design and overall planning sets a comprehensive, long-term strategy for which all levels of government can mobilise resources;
- Conducive to the establishment and improvement of supporting laws and regulations;
- Encourages sharing and opening-up of government data;
- Spurs the research and development of big data’s key technologies, industrial development and talent training.
Emergence of a localised, industry-Specific national “Big Data strategy”
At the end of 2016 was the first set of granular Big Data goals for China’s big data industries in the Development Plan for Big Data Industries (2016–2020) 《大数据产业发展规划 2016–2020年》。Released by Ministry of Industry and Information Technology, the plan set out foundations for development, specified development principles, goals and weaknesses. This is where we begin to see the identification of the key applications for big data, in particular manufacturing, aerospace, new-energy and health. Alongside, the plan notes the importance of formulating standards for Big Data across China, work supported by the development of Big Data comprehensive pilot zones and industrial clusters. The key target it set out for 2020 was a total revenue of Big Data-related products and services to exceed 1 trillion RMB — 4 years on, and the industry revenue is roughly 675 billion RMB, according to IDC.
Fundamentally, it laid out the backbone for China’s distribution of 10–15 Big Data comprehensive pilot zones several big data industrial clusters as well as Big Data industrial demonstration bases.
Today, China has 8 big data pilot zones, and 5 Big Data industrial demonstration bases. The map below displays the distribtion of China’s national level Big Data pilot zones. Less-developed provinces with ideal climates and environments are leading in data storage (such as Guizhou and Inner Mongolia) and are leveraging this in obtaining government support. More developed provinces with broader funding tend to be leading in R&D. Guizhou (in red) is China’s first national level Big Data pilot zone, while the yellow refers to the regions of the subsequent 7 zones.
Chinese and foreign firms have also invested in creating local data centres in accordance with the 2017 Cyber Security Law requirements for all personal data of Chinese citizens collected over a network to be stored in China.
China’s Big Data Investment Projects
Successive party congress document and government work reports also help us frame Big Data’s development in the eyes of the Beijing. The 2017 19th CPC National Congress report honed in on the linkages between Big Data and other sources innovation and economic drivers. It called for the deeper integration of Big Data with internet, artificial intelligence and the economy in order to generate advances in areas including high-end consumption, low-carbon, sharing economy, modern supply chain, human resources services, etc.
The annual Government Work Reports — setting out China’s high-level economic and social development agenda for the year ahead — also took on a similar slant on harnessing the productive and innovative force of data to bring about efficiencies across health care, pension, education, culture and sports.
The diagram below displays the key linkages in relation to creating innovation and opportunities for Big-Data:
This multilayered, ecosystem approach touches on all firm, industry and economy levels. Whilst each policy action can be highly selective, the interaction among the variety of agents decides the nature of the Big-Data development at the firm level. These key agents — firms, industrial parks, and other local government initiatives — will be discussed in the next article.
