Deepening Market-Oriented Allocation Reform of Data Elements Escalates Compliance Challenges for Chinese Enterprises Going Global

Policy Updates

Since 2024, China's reforms for market-oriented allocation of data elements have entered a deep-water zone. The National Data Administration, together with multiple ministries, issued the 'Guiding Opinions on Promoting Market-Oriented Allocation of Data Elements', clarifying fundamental systems such as data property rights, circulation and trading, and revenue distribution. Data exchanges in Beijing, Shanghai, and Shenzhen have seen rapid growth in trading volume, with national data transaction value exceeding RMB 20 billion in the first half of 2024, up 45% year-on-year.

Impact on Enterprises Going Global

Stricter Cross-Border Data Flow Rules

• One year after the implementation of the 'Data Export Security Assessment Measures', over 2,000 assessment applications have been received, with an approval rate of about 75%.
• Enterprises must conduct self-assessments for exporting important data and personal information, with stricter requirements for sectors like finance and healthcare.
• A more detailed negative list for data export is expected in 2025; enterprises going global should prepare in advance.

Rising Data Assetization and Compliance Costs

• The pilot program for data asset entry into accounting books is expanding, allowing enterprises to recognize data resources as intangible assets or inventory, but requiring supporting data governance systems.
• Enterprises going global must comply with both domestic data protection laws and target country regulations (e.g., GDPR, CCPA), increasing compliance costs by an average of 30%-50%.

Key Response Strategies

• Establish a group-level data compliance framework to manage domestic and international data flows uniformly.
• Adopt technologies like privacy computing and data masking to achieve data usability without visibility.
• Actively participate in cross-border data product pilots at data exchanges and leverage compliant channels.

Outlook

The data element market will further improve, with the market size expected to reach RMB 200 billion by 2025. Enterprises going global should integrate data compliance into their strategic planning and balance business innovation with regulatory requirements.