« Continued from Overview: Why Asia?

China

The largest and most prominent of Asian countries is by far China. With its massive economic influence, strong central government, and huge Internet-using population, China represents a unique but massive market for big data–related business. While big data flourishes, however, open data struggles.

China currently lacks any legislation that specifically addresses the issue of data privacy and data protection. However, the General Principles of Civil Law and the Tort Liability Law are general laws that may be interpreted to include data privacy rights as part of an individual’s right to privacy. The extent to which data privacy is protected under these general laws is up to interpretation. There is evidence that China is seeking to tighten its policy on the matter of data privacy with, for example, the arrest and deportation of Peter Humphrey, who mined data for GlaxoSmithKline. In cases such as these, China's government has demonstrated that it will interpret current laws to include data privacy breaches as infringements. As China continues its explosive growth, especially in the realm of ecommerce and social media, the need for data privacy guidance will only increase. In 2013, China issued “Information Technology Security—Guidelines for Personal Information Protection Within Information Systems for Public and Commercial Services.” The Guidelines define the state's expectations for data privacy and protection. In both content and legal standing, they are similar to the US Fair Information Practice Principles. They are not legally binding, but they do set the tone for the preferred practices for businesses dealing with personal information in China. Individuals from whom data is collected are to be informed of the retention period of the data, the purpose of the data collection, the method of data collection, and the scope of the data security. Data is to be processed in a manner consistent with the announced purpose and method, and is to be deleted after the retention period is up. The “Guidelines” emphasize the fact that China is in fact moving forward in terms of its data privacy and protection laws. Although they lack the full force of law, the Guidelines set the tone for future legislation coming out of China.

Beijing’s official legislation regarding data privacy is only part of the landscape for big data in China. Three large companies dominate big data currently in the world’s fastest growing market. Baidu, Alibaba, and Tencent, collectively known as BAT, are familiar to those already involved in business in China but a brief introduction for the foreign audience is in order: BAT comprises the three biggest players in China’s Internet industry. Baidu is a search engine first and foremost, and therefore collects data based on user searches. Alibaba, an ecommerce giant, has access to valuable market data—the purchasing habits and preferences of consumers. Finally, Tencent is primarily know for being the creator of WeChat, the largest messaging app in the world (measured by monthly active users). It comes as no surprise that all three companies are attempting to put their wealth of data to use. Baidu has already begun delving into deep learning and data-crunching technologies. The search giant has used big data to do everything from modeling disease patterns to predicting the winner of the World Cup. Baidu leads the charge for the big data revolution in China, investing in R&D with numerous big data and deep learning labs, located in both the United States and China. Similarly, Alibaba has also utilized big data to streamline its ecommerce in terms of helping sellers understand the targeted buyers, and customizing consumer recommendations. Alibaba also maintains a cloud computing subsidiary, Aliyun. Aliyun is noteworthy for having issued a Data Protection Pact, which guarantees that Alibaba will protect consumer and business data privacy.

Although Beijing’s official legislation is not necessarily strict regarding data privacy, companies such as Alibaba are taking the initiative to guarantee customers that their data is secure. Tencent lags behind the others in terms of technology—the company is not quite as invested as Baidu is in the realm of deep learning—yet it still employs big data, for example, in targeting customers with advertisements.

China’s data privacy policies and the companies that dominate the Chinese Internet industry may not appear too different from those of the United States. However, several stark contrasts exist. Primarily, the Chinese industry operates under the shelter of the Great Firewall, and under the shadow of the Chinese government. Google, for example, has had a difficult time in China—from the fight over censorship to security breaches. It is not surprising, therefore, that Baidu takes 80% of the Internet traffic in China, with Alibaba and Tencent occupying the roles that Amazon and Facebook occupy elsewhere. BAT seeks to expand into one another's territories (for example, Tencent partnering with China’s second largest ecommerce website, JD.com), as well as expanding into newer fields where big data can be used in different ways (for example, in finance or health care), allowing more business opportunity.

In many ways, the political economy of China encourages disruption-based models: large, internationally successful businesses might have a hard time porting over into China due to government oversight and involvement and different culture, but smaller, more flexible companies might be able to establish niche positions and disrupt major players before becoming bogged down in the current system.

Finally, it might go without saying, but culture matters.When targeted with ads within WeChat, where wealthier users supposedly received a BMW ad, while a “lower class” ad for Coca-Cola was shown to other users, those receiving Coca-Cola ads complained and expressed the desire to receive BMW ads. This incident is amusing, but also illustrative of the ways that the Chinese people accept that targeted advertisements exist, based on the data that they shared with WeChat, but view ads as status markers rather than simply annoyances to be ignored. A majority of Americans, on the other hand, express a disapproval for them.

Despite China’s fascination with big data, the quest for open data remains at large. China’s government has never been about transparency, and big businesses dominate the data marketplace. A few cities, including Shanghai and Beijing, have individual sites where open data sets are available. However, the sets are by no means extensive, and their launches were hardly publicized. Even for these cities, whether or not the data should be completely free and available is still debated. Nationally, there is no open data initiative to speak of. As Joel Gurin of the Open Data Institute has said, "Unlike the U.S. and other countries where national governments have taken the lead by establishing clear open data policies, it is citizens, nonprofits, and urban government leaders driving the movement for more data in China." The creation of Open Data China is the most visible start to this movement.

China is definitely a country to watch. Its explosive economic growth coupled with the experimentation of open data on a municipal level, which could turn into national open data initiatives, may turn China into an open data goldmine in the coming years. Indeed, the potential of the Web to transform politics from the ground up on an administrative level is being revealed there.

Article image: (source: O'Reilly Media).