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November 27, 2020 06:05 pm

China Rises as World's Data Superpower as Internet Fractures

Back in 2001, the U.S. was the dominant country when it came to cross-border data flows. It was the early days of the internet boom, and America was where tech companies and tech-savvy consumers were. But the global data order is changing rapidly. From a report: China now accounts for 23% of cross-border data flows, nearly twice the share of the U.S., which ranks a distant second with 12%. And the Chinese lead could turn into a dominant advantage as the formerly world-spanning internet shatters into the "splinternet": a balkanized mosaic of information networks marked off by national borders. A Nikkei survey of information on cross-border data flows from the International Telecommunication Union and U.S. research firm TeleGeography showed that cross-border data flows of China, including Hong Kong, in 2019 far outstripped any of the other 10 countries and regions examined, including the U.S. (Click here for a graphic-rich version of this article.) The source of Beijing's power lies in its connections with the rest of Asia. While the U.S. accounted for 45% of data flows in and out of China in 2001, that figure dropped to just 25% last year. Asian countries now make up more than half the total, particularly Vietnam at 17% and Singapore at 15%. Beijing has used its Belt and Road infrastructure initiative to encourage private-sector tech companies like Alibaba Group Holding and Tencent Holdings to expand abroad. Alibaba spinoff Ant Group's Alipay mobile payment platform is available in more than 55 countries and used by 1.3 billion people. China surged past the U.S. in 2014, and its influence outside its borders has only grown in the ensuing years. What does that mean? As China becomes a global data superpower, it will control huge quantities of a resource that will be invaluable to its future economic competitiveness. Data from foreign sources can provide an edge in developing artificial intelligence and information technologies.

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