Chinese President Xi Jinping has predicated the country's future economic prosperity on a transition from low-wage manufacturing to high-tech, innovation-driven production.
Yet even as U.S. President Donald Trump is seeking to tighten controls on China's access to American technologies, new Chinese restrictions on the free flow of data are threatening to disrupt the cross-border interaction that is essential to international supply chains and the ecosystem on which innovative global industry rests.
The Cybersecurity Law adopted in 2016 imposed requirements on all companies operating computer networks in China, and brought in restrictions on the transfer of data out of the country which are likely to have a disproportionate burden on foreign companies doing business in China.
The law's complexity and overreach, with requirements that go well beyond comparable legislation in other major economies, have caused consternation among many companies, leading some to consider shifting parts of their operations to other countries. Chinese officials meanwhile are still struggling to devise implementing regulations.
Against this backdrop, the State Council, China's cabinet, issued the Measures for the Management of Scientific Data on March 17 without the standard 30-day public comment period or notification to the World Trade Organization that arguably would be required under WTO rules.
The measures are ostensibly intended to expedite the sharing of scientific data and accelerate research and its commercialization, thus promoting innovation and economic growth. As the measures do not address sharing on an international basis beyond restricting it, it appears that the expedited sharing of data is to be limited to domestic parties.
If the rules applied only to publicly funded research and supported open publication, they would be consistent with policies encouraging open access to publicly funded research data in Europe, the U.S. and other jurisdictions. But Beijing's measures go well beyond their foreign counterparts in several respects, raising major concerns about China's commitment to scientific openness and the rules' likely impact on innovation in the country.
First, all scientific data involving state secrets, national security, societal or public interests must be submitted to a national scientific data center. China's National Security Law specifies many types of national security, including in the areas of culture, food and health which have only a remote relation to military or intelligence security. Moreover, "societal and public interests" are inherently ambiguous and open-ended terms. Already, existing regulations heavily restrict the publication of data in the name of protecting state secrets.
Second, the measures not only apply to public employees and publicly funded research, but also to any entity or individual engaging in activities relating to classified scientific data within the People's Republic of China. The customary exception for Hong Kong and Macau in state regulations is notably absent.
The rules also encourage researchers to deposit even unclassified, privately funded scientific data in national scientific data centers. On its face, this would include research by foreign-invested enterprises, joint research by Chinese and foreign coworkers, and even joint scientific research in China with some funding from foreign governments. This could result in expansive controls on the publication of scientific data inconsistent with promoting innovation and economic growth, the ostensible purpose of the measures.
Third, scientific data concerning state secrets, national security and societal or public interests, as well as trade secrets or personal privacy, may not be shared abroad or made accessible from outside China. While narrowly drawn limits on the export of scientific data in the interests of national security or the protection of state secrets are reasonable, such broad restrictions imply an intent to husband scientific data in China for the purposes of industrial policy and economic protectionism.
This would be in keeping with China's longstanding controls on the export of human tissue and its more recent drive for advances in the sectors of artificial intelligence and life sciences. These couple access to the world's largest population with restrictions on the cross-border export of human genetic data even as Chinese researchers enjoy ready access to data from more open, market-driven economies.
Unfortunately, Beijing's data restrictions are likely to have the perverse effect of dissuading foreign companies, research institutions and other governments from conducting research in China or collaborating with Chinese counterparts. Unless Chinese officials believe that the country's scientists can succeed in all fields without a free flow of data and international collaboration, this will actually retard the innovation which the government seeks to foster.
The State Council's measures also imply an ambivalence to publishing in prestigious international journals. One leading Chinese newspaper recently noted that for scientists to publish their results in journals such as Nature, Science or Cell, they will have to submit primary research data to enable the replication of their findings and prevent falsification and fraud -- a type of sharing discouraged under the new rules.
These are unfortunately widespread problems among Chinese researchers which Beijing has belatedly sought to combat. Restrictions on the export of scientific data will serve to discourage international publication in favor of onshore publication. This will have the side-benefit of boosting Chinese "soft power" by fostering greater demand for its own scientific journals but may impede efforts to reduce scientific fraud.
The measures also indicate that some types of research data should be made available for free or at cost. While appropriate for publicly funded research, this could compromise intellectual property rights and reduce the financial incentives that underlie innovation.
The measures are drafted in such general and expansive terms that the Ministry of Science and Technology has reportedly indicated that enforcement may remain on hold until implementation rules are issued and the national data center network established.
Because China faces the risk that excessive controls on the publication and export of scientific data will obstruct the openness and international collaboration on which scientific research depends, thereby slowing innovation and economic growth, it should revise and narrow the reach of the measures before they harm its quest for innovation. China should also invite public input after redrafting the rules and coming up with a plan for their implementation to reduce the likelihood of unintended consequences.
Lester Ross is partner-in-charge of the Beijing office of law firm WilmerHale and chair of the policy committee of the American Chamber of Commerce in China.