Licensed Use of Public Data Will Bring Chinese Government New Source of Revenue

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Shanghai authorities are working on new legislation to facilitate the authorised use of public data by market actors, in a move which could bring a new source of revenue for local governments.

The Shanghai municipal government recently revealed that it has completed a draft version of the “Shanghai Municipal Data Regulations” (上海市数据条例), with a view to “providing legal protections to the development of the market for data as a factor of production.”

A source said to Southern Finance Omnimedia that Shanghai legislators are currently working on additional provisions in relation to authorised use of public data, as well as the licensed operation of registered third party service providers.

The move by Shanghai comes after the Beijing municipal government authorised Beijing Financial Holdings Group (北京金控集团) to operate a “financial public data special zone.”

Xiao Sa (肖飒), a partner from the Beijing office of Dentons, points out that authorised use of public data will serve as revenue source for local authorities, thus conflicting with efforts to develop an open government data system.

“Authorised use of public data brings definite economic benefits to local governments, and will also bring definite compensation to government departments,” said Xiao.

“For this reason the government will focus more heavily on authorised use of public data. However, with the openness of China’s government data facing challenging conditions, efforts should be made to prevent authorised use of public data creating new shocks for open government data.

“We should uphold the publicly beneficial nature of open government data, and firmly make open government data that can be made open, in order to form more diverse models of market operation, and expedite the positive development of the data sector.”

Huang Lihua (黄丽华), a professor from the business management faculty of Fudan University, said that the next step will be for gradually opening up of organisational data and the introduction of third party data service providers, as well as data asset assessors and intermediary consultants.

“At present the development of Shanghai’s public data is at the stage of trials focused on the opening of specific sectors and specific enterprises, and lacks procedures and services on a larger scope.

“For this reason it will be necessary to introduce third party data services bodies, to establish a third party data services system.”

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