China’s central bank chief announced on Wednesday, Nov.3, a series of tight regulations over the financial technology sector to control unauthorized data collection and abuses, Reuters reported.
Meanwhile, CNN published an article on Nov. 3 reminding of China’s ‘unprecedented’ crackdown that stunned private enterprise just one year ago, fearing that private firms’ data collections could outrun the Communist Party.
This time, China has launched a flurry of crackdowns targeting sectors ranging from technology to cryptocurrency, gaming, entertainment, and after-school tuition.
According to Reuters, Beijing will “improve the legal frameworks in the sector and countries should jointly set standards for personal data protection,” citing People’s Bank of China Governor Yi Gang via video at the Hong Kong Fintech Week.
Yi said that data protection is high on the central bank’s agenda, adding that some big tech companies have collected customers’ data without permission or misused such data.
“Going forward, we will continue to improve the legal system for personal information protection in the financial sector and strengthen regulation accordingly,” Yi said.
Yi said that China has preliminarily established a legal system for personal data protection, and government departments will implement supervision.
Even advocators of the Chinese regime have reconsidered their investment plans until more details are known about this crackdown.
China is one of the world’s most unequal major economies, according to the World Bank. Although economic growth is said to increase steadily in the past 4 decades, so has inequality.
International pundits believe that though the concerns for the inequality rate are real, these measures are more connected to the desire for control and the socialist nature of the CCP.
CNN asserted that “for the Chinese Communist Party it’s not about killing the private sector: It’s about taming the excesses of capitalism and embracing the country’s history of socialism.”
Beijing is obviously anxious about the data collection by these private firms. The technology they have created is so popular in Chinese life that they have access to sensitive information about hundreds of millions of people, ranging from where and when they travel to specific ways of spending their money.
“It cannot go unnoticed that the industries and sectors that came under fire are all part of the modern tech economy, controlling vast amounts of individual level data,” said Opper, a professor at Bocconi University in Italy who studies China’s economy and the private sector. She added that data “is an invaluable resource for any government wishing to control all walks of life.”
Beijing’s interest in Big Data was apparent this summer, as the government’s investigation of Didi and other Chinese companies that trade in the United States started. Authorities focused on allegations that those firms mishandled sensitive data about their users in China, posing risks to personal privacy and national cybersecurity, CNN added.
Those regulations “may therefore simply reflect the desire to gain control over the type of data and technology that is currently controlled by China’s most innovative, private technology corporations,” Opper said.
The Communist Party “seems increasingly concerned that China’s tech sector has become so globally prominent that it runs the danger of outrunning the Party itself,” said Rana Mitter, a professor specializing in the history and politics of modern China at the University of Oxford. “The crackdown helps to bring it down to size.”
While the CCP says the set of laws protects the “sovereignty” of its cyberspace, dozens of reports and experts have criticized Beijing for using these regulations to steal intellectual property and collect personal data from its users.