China’s Influence in Global Data Governance Explained: The Beijing Effect
Thomas Streinz – New York University School of Law;
Matthew S. Erie – University of Oxford Centre for Socio-Legal Studies
-- In today’s global economy, digital data enable transnational communication, serve as a resource for commercial gain and economic development, and facilitate the decision-making by private and public entities alike. As questions of control over digital data have become flashpoints in global governance, Chinese technology companies and the government of the People’s Republic of China (PRC) increasingly shape and influence these contests. The “Digital Silk Road” through which the PRC promises “connectedness” in the digital domain alongside the physical transport capacity of the land- and sea-based planks of the Belt and Road Initiative (BRI) manifests the PCR’s aspirations to facilitate digital development in host states. The prerequisite digital infrastructure investments are orchestrated by its gigantic technology companies, which are acquiring an increasingly prominent presence abroad.
In our article “The Beijing Effect: China’s ‘Digital Silk Road’ as Transnational Data Governance,” which is forthcoming with the New York University Journal of International Law and Politics, we analyze China’s growing influence in global data governance. The term “Beijing Effect” pays homage to Anu Bradford’s account of the EU’s global regulatory influence as the “Brussels Effect,” which is said to be particularly prominent in the digital domain, where the EU’s General Data Protection Regulation (GDPR) has been heralded as a global benchmark for multinational corporations and a template to be emulated by countries without comprehensive data protection laws. Even the PRC is sometimes following in the GDPR’s footsteps, as illustrated by the draft for a Personal Information Protection Law (PIPL) which – together with the Data Security Law – is set to complement China’s existing data governance framework which revolves around cybersecurity. Like the GDPR, the PIPL is set to apply to personal information handling outside PRC borders when the purpose is to provide products or services to people within the territory of the PRC or when conducting analysis or assessment of their activities. In this way, both the GDPR and the PIPL apply extraterritorially in recognition of the Internet’s cross-jurisdictional reach. While such parallels must be recognized, their effects must not be overstated or equated. We concur with Professor Bradford that Beijing will not be able to replicate the Brussels Effect which occurs when globally operating corporations choose to amplify European law. However, we posit that a Beijing Effect of a different kind is already materializing and might gain further strength since the COVID-19 pandemic has revealed the global economy’s reliance on digital infrastructures.
Our account of the Beijing Effect explains how the PRC is increasingly influencing data governance outside its borders, in particular in developing countries in need of digital infrastructures with only nascent data governance frameworks. Indeed, the most consequential vector may be the construction, operation, and maintenance of digital infrastructure by major Chinese technology companies. More than twenty years after Lawrence Lessig’s famous insight that “code is law,” the creators of the hardware and software that penetrate and regulate our increasingly digitally-mediated lives globally are increasingly based in Beijing, home to Baidu and ByteDance, Hangzhou, where Alibaba is based, or Shenzhen, where Huawei and Tencent are headquartered. As their digital infrastructures become ingrained in the social, economic, and legal structures of host states, they affect where and how data flows, and, by extension, how people communicate and transact with, and generally relate to, other individuals, the private sector, and public authorities.
At the same time, the PRC challenges the Silicon Valley Consensus which heralded the unconditional desirability of “free flow” of data and, instead, promotes “data sovereignty” as a leitmotif for international and domestic data governance. This tension materializes in the “digital trade” and “electronic commerce” chapters of recent megaregional trade agreement: While members of the Trans-Pacific Partnership (TPP) can challenge the necessity of data transfer restrictions and data localization requirements under threat of dispute settlement proceedings, the Regional Comprehensive Economic Partnership (RCEP) agreement allows its members to self-assess which restrictions they deem necessary.
As some governments in BRI host states seem drawn towards the dual promise of social control and economic development as reflected in the PRC’s transition towards a digitally-advanced, technologically managed society, a critical reevaluation of extant digital development narratives and China’s self-representation as an alternative center for global governance is warranted. Our account of the Beijing Effect is one piece in this larger puzzle, which requires more theoretically informed and empirically grounded research into China’s unique approach to law and development.