China Plans New Data Regulatory Agency

China plans to create a national bureau to manage the country's data, The Wall Street Journal reported.

The agency, expected to be discussed and approved at the National People's Congress (NPC) during its annual session, will become the top Chinese regulator on various data-related issues, WSJ reported.

This year's NPC will run through March 13.

Currently, multiple ministries – including the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the National Development and Reform Commission – share oversight of data.

The new agency will hold a similar status as the State Anti-Monopoly Bureau (SAMB), which is headed by a deputy-minister-level official, sources told WSJ.

After SAMB was elevated in 2021 from a small department, it was able to access resources across various government agencies to scrutinize mergers and acquisitions.

Chinese proponents of the new agency want to address data-security practices by businesses and streamline its regulatory structure.

The new regulator would rule on whether multinational companies can export data generated by their operations in China, and set and enforce data-collection and sharing rules for businesses, WSJ reported.

Sources told WSJ the new agency would check for potential national security breaches by preventing companies from collecting certain kinds of consumer data, or by vetting the data that domestic companies plan to share with foreign business partners.

The new data regulator also would probe issues in the digital domain, such as the use of algorithms for data manipulation or for inducing internet addiction among minors, WSJ reported.

It also would identify data-security vulnerabilities prone to cyberattack.

Technology executives familiar with the plans have expressed concern on whether the new agency would suppress innovation.

China already has introduced various laws and regulations to oversee handling of data held by internet companies amid growing consumer concerns around data privacy.

Beijing has curbed data collection by technology companies, and has forbidden certain data from leaving China, especially that which it considers critical to national security.

Not only has regulatory approval been required for dispatching certain data overseas, internet companies have been compelled to share some algorithms.

Companies such as Apple and Tesla have incurred growing compliance costs. That has led to the companies setting up new data centers in China to store more data locally.

Digital activity has forced other countries to focus on regulation.

Europe in 2018 began enforcing a robust privacy law known as the General Data Protection Regulation, and the Federal Trade Commission in the U.S. has been exploring new regulations to enhance online privacy protections.