The People's Republic of Data: How China Is Turning Data into Capital
The U.S.-China Economic and Security Review Commission (USCC) today released a new staff issue brief, “The People’s Republic of Data: How China Is Turning Data into Capital,” examining how Beijing is transforming data into a strategic economic asset through state-directed commercialization policies. The paper analyzes China's efforts to build a national data economy while advancing broader objectives related to artificial intelligence, technological competition, and traditional industries.
The Commission first flagged the valuation problem in its 2024 Annual Report to Congress, which documented Chinese local government financing vehicles recording data as balance sheet assets and pledging it as collateral while noting that the value of those datasets and the degree to which they can be monetized are difficult to determine. This issue brief develops that finding.
“China increasingly views data not simply as information, but as a strategic asset that can drive economic growth, accelerate artificial intelligence, and strengthen national power,” said Chair Randy Schriver. “This report explains how Beijing is building the institutions and policies to transform data into a source of long-term economic and strategic advantage.”
“China declared data a factor of production. Then it wrote the accounting rules to put data on corporate and state-owned balance sheets. Now it is taking those rules to international standard setters,” said Vice Chair Mike Kuiken. “Our government, our companies, and every American household are producing enormous value that no one counts. What's more, assets that aren't valued aren't protected. Data belongs on the balance sheet.”
The issue brief explores how China is constructing a nationwide system of data exchanges, valuation frameworks, accounting rules, and regulatory mechanisms designed to encourage data sharing and monetization while maintaining extensive state oversight. It also examines how Beijing is positioning itself to influence emerging global standards governing data markets and interoperability.
Key findings include:
- In 2020, China designated data as a factor of production, formalizing its intent to make data into a key building block for economic progress. This decision elevated data to a strategic resource and compelled ongoing efforts to manage the creation, valuation, exchange, and productive use of data.
- Beijing’s ambitions extend beyond economic growth. It is marshaling data to drive productivity, power its AI and technology goals, and improve its intelligence collection and military capabilities. Commercial gains are one facet of a wider contest with the United States over data as a source of national power.
- China’s data strategy mirrors the top-down design of its industrial policy. By incentivizing local governments to deploy, commercialize, and monetize data, Beijing is fostering experimentation with data applications.
- China’s data commercialization drive enables strict state oversight of data. Five years after a crackdown on big tech chilled entrepreneurship, China’s current policies encourage aggressive data monetization in an environment controlled and monitored by the state.
- China’s initial successes include the adoption of official data exchange infrastructure and published use cases for data applications. Despite challenges of low-quality data and hesitancy from private firms to participate in the state-led data economy, China has continued to adapt policy to encourage greater participation.
- China's commercialization effort targets the data that remains scarce. With the open web largely exhausted as a training resource, competitive advantage rests on enterprise, operational, and physical-world data that cannot be scraped, and China's exchanges, accounting rules, and industrial data programs are aimed at precisely these categories.
The paper concludes with considerations for Congress related to U.S. data strategy, accounting standards, international data standards, and the valuation and protection of federal data assets.
The issue brief is available on the Commission's website here.
More than 25 years ago the bipartisan U.S.-China Economic and Security Review Commission began its work advising Congress on the economic, trade, and national security implications of the U.S.-China relationship, and providing recommendations to Congress for legislative and administrative action. Follow the Commission on LinkedIn and via @USCC_GOV on X/Twitter, Instagram, and YouTube.
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