Recently, the Chinese Communist Party (CCP) authorities have uncommonly admitted that multiple departments have profited illegally from government data, totaling 2.48 billion yuan (RMB). They also mentioned a shift from “land finance” to “data finance” in some regions. Observers point out that the publicly disclosed data exploitation involving the public is just the tip of the iceberg. Under the CCP’s authoritarian control, people have no privacy or security, only the CCP’s so-called national security considerations.
In June of this year, the CCP released an Audit Report on the implementation of the 2023 budget by central government departments. The report revealed that 7 operational units from 4 departments had illegally set data content, service forms, and fee standards without approval, generating a total of 2.48 billion yuan in fees from 13 system data.
According to the audit period spanning the past 6 years, the 7 operational units belonging to the four departments include: 2 units under the Ministry of Transportation using government data from 4 information systems for unauthorized fees totaling 145 million yuan; 2 units under the Ministry of Education illegally charging 58.657 million yuan using data from 3 information systems; 2 units under the Ministry of Industry and Information Technology collecting unauthorized fees of 24.47 million yuan from 5 information systems; and 1 unit under the State Administration for Market Regulation charging 20.2455 million yuan using data from 1 information system. However, the Audit Office’s report did not disclose more specific details.
Public data indicates that government data refers to information collected, processed, and used by government departments to fulfill their responsibilities in managing national administrative and social public affairs.
Legal experts in China believe that the report may indicate profit-seeking behavior by providing paid information services. For instance, citizens may need to pay certain websites to access information.
Rai Jianping, a former Beijing lawyer and chairman of the Canadian Alliance for China, believes that the issues identified by the auditing department are just the tip of the iceberg. He states that government data actually includes the personal information of many ordinary people. “Under the entire authoritarian government, many departments are using the personal information of Chinese people to profit, and this is a widespread phenomenon. Only limited departments have been caught.”
He further explains that the CCP monopolizes data for profit, and power-seeking is openly practiced. Local and even central government departments engage in such activities. For example, some commercial entities or businesses inquire about information from these agencies to sell goods or services, and the trading parties can be units or individuals.
The Audit Office stated that the practices of these four departments were unauthorized, arbitrary, and in violation of regulations. Rai Jianping emphasizes that internal approvals within the Communist Party do not equate to legality. The government should not profit from citizens’ personal information. “From a legal perspective, whether or not they approve, there is no legal basis for it.”
Sun Guoxiang, an associate professor of International Affairs and Business at Nanhua University in Taiwan, believes that the recent disclosure by the Audit Office about the illegal profiting of 2.48 billion yuan by four departments using government data revealed deep-seated issues. “Firstly, there is inadequate supervision; secondly, there is rent-seeking behavior, and thirdly, there are security risks in data.”
He notes that internationally, China is known for its strict digital surveillance, collecting extensive government data on citizens, including identity information, financial data, health records, etc., increasing the risk of privacy breaches. Citizens need to raise their awareness of personal information and data security.
The state-owned CCP media Xinhua Daily Telegraph recently warned against the hasty transformation towards a “data finance” trend prompted by data assetization, fearing that the leakage of government data could pose national security risks.
In response, Rai Jianping believes that such a shift is possible as the CCP’s current land finance system is no longer sustainable. Even though data finance may not yet match the revenue from land finance, this transition is indeed happening — when land no longer brings revenue, they turn to data for profit, increasing fiscal income.
According to the Audit Office, departments should gradually open up the national government and public data they hold to the public to reduce the cost for the public to access this data.
The Southern Metropolis Daily in China reported that in 2021, the CCP’s “14th Five-Year Plan” proposed the establishment of a national public data resource system, enhancing data openness and sharing, and for the first time, exploring the pilot operation of government data authorization. In December 2022, the CCP officially released the “Guidelines for Better Implementing Data Elements to Enhance the Data Infrastructure System,” also known as the “20 Data Guidelines,” mentioning the implementation of a mechanism for public data rights authorization. The CCP also established the National Data Bureau last year.
However, these actions have sparked controversy. On October 23, 2023, Hangzhou authorized Alibaba Health to operate public data in the health and medical field for two years. On November 10th of the same year, Hengyang auctioned governmental data resources and the franchise rights of a smart city for 1.802 billion yuan, but the deal was retracted five days later amid widespread disputes.
Sun Guoxiang believes that claims of opening up data to the public are unlikely because the authorities prioritize national security. He suggests that for effective data openness and standardization, enhancing privacy protection and data security management alongside transparency is needed to meet international standards.
Rai Jianping remarks that Chinese people fundamentally lack privacy rights, with the government possessing detailed information on everyone. With the Communist Party’s opaque operations, decisions on major national policies are made by a few people at the top without public oversight or transparency. “The Communist Party can use this information for illegal purposes anytime, anywhere.”
The new “Regulations on the Implementation of the State Secrets Protection Law” issued by the CCP will take effect on September 1, with a 64% increase in provisions compared to the 2014 version, including party-controlled secrecy and national secrecy.
In May 2024, the CCP’s “State Secrets Protection Law” had already come into effect. Prior to this, in September 2021, the “Data Security Law” was implemented.
Rai Jianping mentions that the CCP has many laws and regulations that allow them to unilaterally collect any personal information of citizens but prohibit individuals or social groups from collecting, storing, using, or disclosing information. This conflict between the regime’s security and the privacy of citizens poses a significant challenge.
Sun Guoxiang states that the CCP prioritizes regime over people or individual families. Despite enacting laws like the National Security Law and Data Security Law in recent years, without social oversight, in a non-democratic society, many issues detrimental to citizens may arise.