Beijing continues strengthen control over personal data and more generally on the activities of the technological giants. The Central Bank of China tries to force the giants of the web to share their users’ data.
Why is the Central Bank struggling to enforce this law?
The country’s banking institution has set a deadline of December 2022 to force the tech giants to comply with this new legislation. in any case, the Financial Times reports that the Central Bank of China struggles to achieve his goals. The question of who should control Internet users’ access to large amounts of data comes at a time when Beijing is looking to strengthen its grip on the country’s tech sector and consumer lending.
President Xi Jinping, recently reconfirmed leader of the Communist Party, wanted to establish a data control system, as part of a broader effort to to build more state “. After all activities related to cryptocurrencies declared illegal, the Chinese central bank then ordered Tencent, Meituan, Alibaba, Baidu and ByteDance to share user data, among others. The government wants to have access to all the data that the tech giants have.
To encourage big tech companies to collaborate, the government has even planned to pay them. According to several sources, Beijing is particularly trying to do this assess the creditworthiness of potential borrowers. However, the tech giants aren’t really collaborative on this project. “ Neither the platforms nor the banks want to follow an order that damages their business “says an anonymous source. Proof that even with a government as powerful as the Chinese one, it is never easy to establish a rule and enforce it as if by magic.
In fact, many Chinese banks, especially smaller regional lenders, rely on huge amounts of user data and the analytics tools of internet companies to identify creditworthy people. Outstanding bank loans issued jointly with online platforms increased by 22% last year compared to 2020, compared to only 12% for overall loan growth. “We will not stick until everyone does,” said the director of a Shanghai-based bank.
Loan growth is a cause for concern in the country. The government is trying to regain control. A study from Renmin University in Beijing found that the technology giants should see an 8% increase of their expenses after the entry into force of the law. For Michael Li, credit score analyst, “ the government sees data as a valuable resource, but government employees lack the ability to effectively manage data. This means you risk killing the industry “.