The Competitive Effects of China’s Legal Data Regime

The global race for data-based technological superiority is on. In a world where “data are the new oil,” data-based comparative advantages may affect not only competition between firms but also the balance of power among jurisdictions. In the past two decades, China has made important strides in gaining such advantages. Some of China’s comparative advantages are natural. For example, its population size creates unparalleled potential for harvesting data. Some are cultural, such as the traditionally low significance of Western-style privacy concerns. This research focuses on a third, often overlooked, source: comparative advantages created by China’s data regime—the system of policies, laws, regulations, and practices that govern or influence the data value chain. The article provides a detailed outline of China’s data regime and offers analysis of its possible competitive effects on China and on other jurisdictions. This analysis also provides a wider context for understanding China’s recent competition law actions against Chinese technology giants, after years of extremely lax policy. Indeed, as this article shows, to fully understand China’s actions, it is necessary to consider not only its competition law enforcement but also other ways in which the government is involved in the data value chain.