China to revamp data, tech authorities in self-reliance push

China will set up a national data authority, downsize staff at central state institutions and strengthen its science ministry in a sweeping revamp as Beijing pushes for tech sector self-reliance.

Beijing is pouring resources into its manufacturing and research capabilities in the face of tightened restrictions on homegrown tech companies by the United States and its Western allies.

And a broad restructuring document announced by China’s cabinet on Tuesday will focus the Ministry of Science and Technology’s resources on coordinating “scientific and technological achievements”.

Beijing will also set up a national data administration responsible for overseeing the digital economy, as well as slash staffing at the country’s central state institutions by five percent.

The freed-up headcount will be reallocated toward “key areas and important work”, according to the plan.

China’s rubber-stamp parliament is expected to approve the plan at its annual national meeting — known as the “lianghui” or “Two Sessions” — which wraps up on Monday.

Under the plan, the science ministry will delegate its existing responsibilities for rural and social development to other ministries, and instead “optimise its management of the whole chain of science and technology innovation”.

The new national data administration will coordinate the use of digital data, including in “smart cities”, it added.

The plan also replaces China’s existing banking and insurance regulator with a new body incorporating some functions from its central bank and securities watchdog, strengthening oversight over the financial sector.

– Self-reliance –

President Xi Jinping vowed earlier this month to boost the country’s manufacturing capacity, telling Two Sessions delegates “we must rely on ourselves”.

Faced with an increasingly hostile international environment and lagging growth at home, Beijing is also grappling with a shift by global corporations away from Chinese factories to manufacturers in countries such as India and Vietnam.

Xi told Two Sessions delegates on Sunday that China must develop high-quality manufacturing that is “innovative, coordinated, green, open and shared”.

This year’s parliamentary meeting follows a key Communist Party conclave last year that secured Xi another five years as head of the party and the military.

Xi is expected to be reappointed as president at the Two Sessions.

Changhao Wei, a fellow at Yale Law School’s Paul Tsai China Center, told AFP that Tuesday’s restructuring followed “practically an unwritten rule that this must happen at the start of each government’s five-year term”.

An even broader plan is expected after the Two Sessions close next week, with Wei adding that “it’s certainly possible, and even likely, that the Party (and Xi personally) would assert more control as part of this round of restructuring”.

But Tom Nunlist, policy analyst at research firm Trivium China, said in a tweet that the creation of the national data administration “looks like it will do nothing to clear up all the confusion around data security compliance” in China.