As Trade Talks Continue, China Is Unlikely to Yield on Control of Data

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As Trade Talks Continue, China Is Unlikely to Yield on Control of Data
President Trump began his trade war with China out of concern that Beijing was using unfair economic practices to prevent the United States from dominating next-generation technologies like autonomous vehicles, advanced telecommunications and artificial intelligence.To get more China news in China, you can visit shine news official website.

But as the two countries move closer to a trade deal, it seems increasingly unlikely that China will give ground in a crucial area that could determine which country wins the technology race. Despite months of pressure from the White House, Chinese negotiators have so far refused to relax tight regulations that block multinational companies from moving data they gather on their Chinese customers’ purchases, habits and whereabouts out of the country. Such data is crucial as industries build next-generation technologies.

With another round of trade talks underway this week, the United States and China appear headed toward an agreement that could end the monthslong trade war and lift tariffs on hundreds of billions of dollars of products. China is offering to strengthen its laws surrounding intellectual property, direct large purchases of American goods and reduce barriers for foreign companies in industries like finance and agriculture. It has also proposed giving foreign cloud computing companies like Amazon, Microsoft and Apple greater ability to operate independently in China, people familiar with the negotiations say.

A trade deal between the two nations will calm tensions and be seen as a victory for Mr. Trump, but some American technology companies fear the administration is giving up a valuable opportunity to press China on data-related issues and will cede too much economic power to Beijing.
China has already overseen a splintering of the world’s internet, a move that has helped Chinese companies catch up to American firms. Over the past two decades, China built and shored up the Great Firewall, which blocks websites including YouTube, Facebook, Google and The New York Times from reaching more than 700 million Chinese internet users. Behind those barriers, Chinese internet companies like Alibaba, Baidu and Tencent have thrived, developing cutting-edge services that have in many respects surpassed those of their Western competitors.

The American tech industry is concerned that this same fracturing is being repeated with data, setting up more permanent divisions in how technology will be used around the world. As companies collect and analyze ever more data on customers, China has insisted that information be stored within its borders, on Chinese-made servers and routers, and not be transferred out of the country.

Business executives say relaxing China’s restrictions on data is critical to ability of the United States to build globally competitive firms in areas like autonomous vehicles and artificial intelligence, which are expected to power jobs and economic growth.China describes its data restrictions as an issue of national security, but technology firms, financial advisers, energy companies and others argue that the rules are intended to help Beijing dominate data-intensive industries. American firms say the restrictions increase their costs, force them to share sensitive technology with Chinese partners, make them more susceptible to cybertheft and leave them beholden to Chinese monitoring and censorship.
Trade in data is just one of several technology issues the United States is discussing with China. Trump officials are also trying to end Beijing’s pattern of forcing American companies that operate in the country to transfer valuable technology to Chinese partners, and curb cybertheft. It remains unclear how these issues will be resolved, but a final deal is expected to include changes that allow American companies in the financial and automotive industries to operate independently, rather than with a Chinese partner.

“There’s no question to me that the Chinese are setting up a separate technology system, and they are a superpower in the field,” said Ian Bremmer, the president of Eurasia Group, a consulting group. “There are some areas where they are more advanced than we are.”

The enormous volume of email, software, audio and video content that crosses international borders each day facilitates trade in goods and services in a range of industries, including entertainment, finance, law, manufacturing and retail.