arcid CHINA POLICY B R I E F Lessons Learned from Big Data Development in China

By Busagarin Nitiwong

Volume 2, No. 3 2019 Asian Research Center for International Development (ARCID) Mae Fah Luang University, Thailand

ISSN 2630-0877

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

ARCID CHINA POLICY BRIEF Volume 2, NO. 3 2019 Lessons Learned from Big Data Development in China © All Rights Reserved Author : Busagarin Nitiwong ISSN : 2630-0877 First published in 2019 by ASIAN RESEARCH CENTER FOR INTERNATIONAL DEVELOPMENT (ARCID) School of Social Innovation, Mae Fah Luang University 333 Moo1, Thasud, Muang, Chiang Rai 57100, Thailand Tel : +66 5391 7137 Email : arcid.social-innovation.school@mfu.ac.th Website : chinawatch.today, social-innovation.mfu.ac.th/arcid.php Facebook page : www.facebook.com/ARCIDTHAILAND www.facebook.com/chinawatch.arcid Printed by Techno Printing Center 643 Utarakit Road, Wiang, Muang, Chiang Rai 57000, Thailand Tel/ Fax : +66 5371 8841 Email : tpccri@gmail.com

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

Preface economic reforms and the opening up of the People’s Republic of China (PRC) to the outside W ith world by Deng Xioaping and post-Deng leaders, China is now the largest economy (on a purchasing power parity basis). All indications show that China will be a superpower. The meteoric rise of China in the 21st century signals the successful comeback of China in regaining its respectful place in regional and international affairs. It also means challenges as well as opportunities for other parts of the world, especially for countries in the Asia Pacific region. For many of us, the big question is: how should we deal with such a rising superpower? Other questions may include the following: Is China’s rise going to be sustained? What are the new directions mapped out by Xi Jinping to develop China? What sort of developmental challenges will it face? Is China a threat according to some analysts? How can we promote a win-win relationship with China? How can we manage our problems, if any, with China in order to preserve peace and development? To answer these questions, the Asian Research Center for International Development (ARCID) of the School of Social Innovation at Mae Fah Luang University has launched the China Watch Project with a grant from the Thailand Research Fund (TRF). We would like to express our thanks to the TRF for its funding support and suggestions in improving the project proposal. As part and parcel of the China Watch Project, ARCID has established a Monitor and Analysis (M & A) Unit surveying and analyzing major developments in China. Located in Northern Thailand, ARCID would like to take advantage of its geography and focus its research more on the Mekong region and its relations with East Asia, including China. We hope this strategy could help a young research center to establish a niche in the academic, intellectual and policy community. In this regard, the ARCID China Policy Brief is produced by the M & A Unit to examine policy issues on ASEAN-China relations in general and Thailand-China relations in particular. Inaugurated in August 2018, the ARCID China Policy Brief is published a few times a year. Finally, it has to be understood that the views expressed are those of the author.

Lee Lai To, Ph.D. Senior Professor and Director ARCID

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

About the author Busagarin Nitiwong Bachelor of Engineering in Computer Engineering from Chulalongkorn University and Bachelor of International Studies (International Business) from International Pacific University (IPU), New Zealand. Master of Science in Engineering Business Management with Distinction from University of Warwick, United Kingdom and Master of Engineering in Engineering Management from Chulalongkorn University. Ph.D. in Engineering from Sirindhorn International Institute of Technology, Thammasart University. Dr. Busagarin Nitiwong teaches at the Department of Industrial Management, Faculty of Business Administration, Rangsit University. She specializes in Chinese studies, automation, smart logistics, and Burmese labor.

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

Lessons Learned from Big Data Development in China Busagarin Nitiwong, Ph.D. 1. Introduction With the on-going growing number of Internet and mobile phone users in the world, participation in the digital world and digital economy is increased. An oceanic amount of structured, semi-structured, and unstructured data, complex and simple information from social media, online searches, mobile phones, GPS, credit card transactions, on-line transactions, electronic bank records, satellite imaging, climate sensors in different forms , VDOs has been commuted and publicized in a second. As such, traditional information technology cannot cope with the data size and unstructured data. The cutting-edge technology that will help to gain data analysis result, data visualization, and optimized decision making and even insight is the so-called “big data”. What is big data? For a start, it should be noted that “big data is a field that treats ways to analyze, systematically extract information from, or otherwise deal with data sets that are too large or complex to be dealt with by traditional data-processing application software.” (Wikipedia) 2. Big Data Development in China In China, the big data development process during 2015-2016 included (1) building the development road map, (2) establishing a platform for sharing data amongst government departments, (3) sharing of data resources and applications, and (4) integrating with artificial intelligence technology as demonstrated in Table 1. During 2014-2015, the National Social Science Foundation of China funded 116 projects on big data. The funded project areas include (1) statistics (15%), (2) demographics (3%), (3) management (17%), (4) political studies (4%), (5) library, information, documentation science (29%), (6) journalism and communication (15%), (7) scientific socialism (2%), and (8) others (12%) as demonstrated in Figure 1. The prime focus is the application of big data for improving information analysis and monitoring public opinion. In November 2015, the State Council of China officially announced the development of big data as a national strategy. It also issued an official document on how big data was to be used to improve public governance. In 2016, the first Chinese National Big Data Pilot Zone was established in Guizhou which is the first province in China to complete the local registration for big data and also the first to open government data sources. The provincial government of Guizhou has been working with enterprises such as Alibaba to construct the cloud computing infrastructure. The purpose of using digital technology in China is to strengthen the government’s rule. Big data applications are utilized in various areas. For example, the National Bureau of Statistics is using big data to improve the census and statistics For the Chinese government, the areas that big data may be utilized include business activities, technological innovations, improvement of governance, and upgrade of state surveillance. This development has involved not only government agencies but also public sectors. In 2012, Weibo introduced a real-name registration scheme. ID and real names are required in the registration process. The given ID and real name are validated with the database of the Ministry of Public Security.

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China 1

Table 1: Major big data policies issued by the Chinese Government Title

Made in China 2025

Action Outline for Promoting the Development of Big Data

Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China The National Scientific and Technological Innovation Planning for the 13th Five Years Development Plan for Big Data Industries

Issuer

State Council

Date Issued

May 2015

Policies Lays out a road map for the transformation and upgrade of China’s traditional and emerging manufacturing industry, with a focus on big data, cloud computing, the internet of things and related smart technologies.

August 2015

Provides a top-down action framework for promoting big data. Details yearly goals such as establishing a platform for sharing data between government departments by the end of 2017, a unified platform for government data before the end of 2018, and nurturing a group of 500 companies in the industry, including 10 leading global enterprises focused on big data application, services and manufacturing by the end of 2020. It is widely perceived to be a programmatic document guiding the long-term development of China’s big data industries

National People’s Congress

March 2016

Identifies big data as a ‘fundamental strategic resource’. Pushes for further sharing of data resources and applications. Lists big data applications as one of the eight major informatization projects. It’s the first time China incorporated big data into state-centric strategy plans.

State Council

July 2016

State Council

Prioritizes big-data-driven breakthroughs in AI technologies.

Ministry of Sets an overarching goal for China’s big data Industry December industries: by 2020, related industry revenue should and 2016 exceed 1 trillion RMB, with a compound annual Information growth rate of 30%. Technology

Source: Ruan (2018)

2 ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

Figure 1: A brief overview of projects funded by China’s National Social Science Foundation with ‘big data’ in the title - Source: Zeng (2016)

3. Different Aspects of Big Data Application in China Transparent and Efficient Public Service A policeman in China starts his daily working day by scanning his thumb at the fingerprint scanner installed in his police vehicle. Every minute of his working day is recorded and analyzed. All behavior and trails are recorded via installed camera in his police car with GPS (Global Positioning System). The purpose is to provide better service to the public in a more transparent data environment. Data Integration and Collaboration amongst Government Units The national platform of big data allows data sharing and enhances better data usage. An example in Guizhou where big data enhances the data integration amongst police, fire, and health care services. The result is 50 percent improvement in efficiency. Forecasting By using the cloud services platform to obtain data about tourism, the Chinese government is able to predict the traffic load, the hotel load, or even the security situation for better preparation. Local citizens can use their phones or tablets to log into Guizhou’s ‘intelligent transportation cloud’ to access real-time information on road and other traffic services. Surveillance There are millions of panoramic cameras working 24 hours a day and seven days a week. Highways, public parks, public transport and taxis, lifts and public streets are covered. In Beijing, the purpose of cameras is publicly known as the prevention of ‘crowd gathering’ and street crimes. Public streets in Beijing are completely and closely monitored. Big data enables the regime to track real-time information on the ideological trends of targeted groups. Education The development of big data can help university educators improve their ability in directing the ideological trend of students similar to the improved delivery of online advertisements. ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China 3

Army Big data usage is a way of strengthening its political education within the armed forces by collecting data about soldiers’ learning and training program, online behavior, communications and liaison as well as their family and social relationships, in order to monitor ideological trends in the army. It is considered to be a means for the regime to exercise better control over the army Social Credit System The “social credit system” is the usage of cutting-edge technology to deal with traditional individual documents in the past, i.e., detailed personal, professional biographical information, including any political/ historical issues, education, and awards and punishments. This information is not only applicable to individual person but also businesses, organizations and government units. It will have an impact on future hotels, travelling, insurance premiums, school admission, government jobs, social services and even retirement benefits. It will remain permanently in place. The system will monitor, manage and rate individual Chinese citizen and organization. The result is a normalized culture of a “surveillance society”. Anti-Corruption In terms of the anti-corruption campaign, personal banking and credit information have been collected to identify the network of corrupt officials and collect relevant evidence. In case of data leakage, this may be a political tool to remove leaders. 4. International Implications of Big Data Development in China Direct implications of big data development in China include (1) foreign companies investing in China, and (2) people around the world who use Chinese brand name mobile phones and Chinese mobile applications. Foreign companies in China are required by law (Article 37) to store data locally and be monitored by the Chinese government. With data localization, the Chinese government can access collected data and punish individuals or companies violating Chinese laws and rules. Some countries, notably Australia and India, are aware of the data security issue when their government officers use Chinese brand name mobile phones i.e., Huawei, ZTE, and 42 Chinese mobile applications like WeChat and Weibo. These mobile applications are considered to be spyware. 5. Advice to the Royal Thai Government There are 2 aspects to consider, namely, (1) implications of big data development in China as mentioned earlier, and (2) lessons learned from China’s big data development in terms of strategy, policy, roadmap, implementation, and benefits in various aspects. Firstly, the Royal Thai Government may need to be aware of the consequences of big data development in China in different areas such as data privacy law, data localization, government’s ability to access user information, and so on. The biggest issue is data security. Secondly, the Royal Thai Government can learn from China on how to promote the successful big data development. Even though the Thai population size is far less than Chinese one, similar benefits from this development can be expected. Thailand can consider different features of big data development and usage in China as lessons learned in areas like poverty reduction, anti-corruption campaign, surveillance, and others. The predictable concern would be data leakages of information on Thai leaders and politicians when big data is in use.

4 ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

Recently there are two successful national payment projects which are localized systems i.e., “prompt pay” and “taste-shop-use” projects. Local Thais experience the facial recognition technology along with digital money. To date the number of Thai people who use the “prompt pay”, the local Thai payment system is reaching 30 million people among the 70 million in Thailand. This is a good starting point for further big data development. Another progress is the Personal Data Protection Act which is published in the Royal Gazette on 27 May 2019. This Act has one-year grace period for enforcement. With the impact from China’s mobile phone and mobile application usage, the Royal Thai Government should quickly consider how to respond by law. Unlike China’s regime, the Royal Thai government still lacks political stability. The people in the government may not put their best efforts to initialize the IT infrastructure projects towards the era of big data, artificial intelligence (AI) and internet of things (IoT) as the first priority to reap the benefits for the country. Even the roadmap might be established, there are still several huge steps away between Thailand and China’s big data development. According to the building blocks of Thailand digital infrastructure as shown in Figure 2, we are just starting the usage of the first phase production of the National Digital ID (NDID) project now. Big data project is the next one, but the timing is unknown. Successful big data projects require huge effort and large amount of technological investment along with the qualified IT personnel to support the development and operation. Figure 2: Building blocks of Thailand Digital Infrastructure Source: Anuchitanukul (2019)

Figure 3: Development Timeline of NDID project

Source: Anuchitanukul (2019)

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China 5

Fast-developing big data technologies in China have an impact on citizens’ diminishing rights to privacy and data security. Privacy protection is a main concern of digital data collection. Balancing between privacy protection and state interests such as surveillance or monitoring is a sensitive issue to be considered when implementing big data development in Thailand. If the main objective of big data development in Thailand is to improve public services, Thais will gain the benefits. It remains to be noted that extensive collaboration is required in big data development. For example, intensive research in different fields to seek different perspectives on the use of big data would need strong collaboration amongst Ministries. References Anuchitanukul, A. (2019) “Thailand’s Approach to Federated Digital ID.” presentation slides to World Bank Conference Meeting in USA on October 21, 2019. Cheng J.H.W. (2014) “Big Data for Development in China.” UNDP China working paper in November. ICAEW (2017) “Big data in Chinese businesses: International perspectives.” Jiang, M. and Fu, K.W. (2018) “Chinese Social Media and Big Data: Big Data, Big Brother, Big Profit?”, Policy & Internet, Vol.10, No.4. Kappler, K., Schrape, J.F., Ulbricht, L., Weyer, J. (2017) “Societal Implications of Big Data” Kunsliche Intelligenz: Springer-Verlag GmbH Germany, published online: 20 December 2017. Ruan, L. (2018) “When the winner takes it all. Big data in China and the battle for privacy”, Australian Strategic Policy Institute’s Issues paper, Report no.5/2018. Wikipedia https://en.wikipedia.org/wiki/Big_data 19 November 2019 Zeng, J. (2016) “China’s date with big data: will it strengthen or threaten authoritarian rule?” International Affairs 92: 6, pp.1443-1462.

6 ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China

ARCID CHINA POLICY BRIEF 1. Kavi Chongkittavorn, “New Challenges of Thai-China Relations”, Volume 1, No.1, July – August 2018 2. Bilveer Sigh, “The Uighur Issue in Thai-China Relations”, Volume 1, No.2, September – October 2018 3. Somchai Thamsutiwat, “ China’ s Railway Transportation Policy” , Volume 1, No. 3, November – December 2018 4. Piti Srisangnam, “Lancang– Mekong Cooperation: Turning A Trust Crisis into Sustainable Development”, Volume 2, No.1, 2019 5. Panu Buranajarukorn and Phisut Apichayakul, “National AI Strategies As An Economic Driven Tool: China and Thailand”, Volume 2, No. 2, 2019 6. Busagarin Nitiwong, “Lessons Learned from Big Data Development in China”, Volume 2, No. 3, 2019

ARCID China Policy Brief Volume 2, No. 3 2019

Lessons Learned from Big Data Development in China 7

ISSN 2630-0877