Data Could Let Xi Loosen Grip on China's Economy but Keep Control
Nikkei Asia
The following is an excerpt from Diana Choyleva's op-ed in Nikkei Asia. Diana is a Senior Fellow on Chinese Economy of the Center for China Analysis (CCA) at the Asia Society Policy Institute (ASPI).
In the eyes of Beijing, data will be the critical factor of production in the 21st century economy and will enable it to inject fresh vim into China's development without relinquishing the control that the Chinese Communist Party (CCP) craves. Data is also central to China's strategy for outcompeting the United States in their increasingly fierce contest for technological supremacy.
The insight of the CCP under General Secretary Xi Jinping is, in essence, that a data-driven digital economy will eventually facilitate a bigger role for market forces, rather than central planners, in allocating capital and other resources, and that the resulting boost to efficiency will lift Chinese productivity and growth.
Xi will always prioritize security over growth. And whatever else happens, the Chinese market will continue to serve the party-state, rather than the other way around.
But limitless, detailed data, party thinking goes, will create an economywide panopticon — like the circular prison designed by 19th century English philosopher Jeremy Bentham that could be run by a single guard with a view of every prisoner.
In this model, Beijing would be able to spot problems quickly and correct course with targeted policy interventions rather than the sort of blanket controls that in recent years have stifled sectors ranging from property to after-school tutoring.
In a world of machine learning, the country with the richest databank will be the most powerful economy, Beijing believes.
In China, the CCP can gather data at will: Western preoccupations with data privacy do not apply. Like in the West, Chinese citizens give up their data unwittingly or willingly every day in return for the conveniences that digitalization offers.
Beijing's fearsome security apparatus can also compel personal data harvesting, for example via the spread of facial recognition technology or, notably in the restive western region of Xinjiang, with the forced collection of biometric information.
