China Accelerates Establishment of Data Property Rights System to Boost Digital Economy

National Data Administration Leads Accelerated Efforts

China is accelerating its efforts to establish a comprehensive data property rights registration system, a move designed to promote the efficient use of data and unlock its significant economic value. The National Data Administration (NDA) is at the forefront of this initiative, drawing on experiences from existing registration systems in other sectors and actively soliciting opinions to create a framework tailored to data's unique characteristics. Liu Liehong, head of the NDA, recently chaired a symposium on data property rights registration, underscoring the urgency and importance of this development.

Data Recognized as a Fifth Factor of Production

This push is rooted in China's strategic recognition of data as a fundamental economic resource. As early as October 2019, the country designated data as a 'fifth factor of production,' alongside land, labor, capital, and technology, elevating its status as a key driver for future economic growth. The overarching goal is to advance data commercialization and foster a robust digital economy. The 'Opinions of the CPC Central Committee and the State Council on Building a Data Base System for Better Use of Data as Factor of Production,' also known as the '20 Data Measures,' adopted in December 2022, further outlined the focus on data property rights, flow, trading, revenue distribution, and security governance.

A 'Sui Generis' Framework for Data Rights

The proposed system introduces a 'sui generis' data property rights regime, treating certain datasets as registrable assets. It establishes a 'trichotomy' framework, recognizing three distinct property rights for data processors: the right to hold data resources, the right to process and use data, and the right to manage data products. Notably, this framework deliberately avoids assigning singular data ownership, instead emphasizing usage and transfer rights and acknowledging the co-existence of multiple property interests. This approach diverges from traditional intellectual property laws by not requiring novelty or creativity for protection. The system is also integrated within China's broader data governance framework, which includes the Cybersecurity Law, Data Security Law, and Personal Information Protection Law.

Pilot Programs and Economic Impact

Implementation rules for the data property rights system were issued in 2023 and 2024. Various regions across China have launched pilot programs to explore and refine the system. The Hainan Free Trade Island enacted a three-year action plan in December 2023. In December 2024, Shanghai initiated data product intellectual property registration, which has since accepted over 1,200 applications and generated more than 19.5 billion yuan ($2.79 billion) in economic value. Shenzhen also introduced interim measures for data property registration in June 2023. Furthermore, the 'Data Element X' Three-Year Action Plan, jointly issued by 17 ministries including the NDA on January 5, 2024, aims to boost data utilization across 12 key sectors, from manufacturing to finance. The Ministry of Finance has also issued 'Interim Provisions on the Accounting Treatment of Enterprise Data Resources,' clarifying how data assets can be included in financial statements, further stimulating enterprise participation.