China has announced plans to set up a central data bureau to tighten control over “big data” intelligence on its 1.4 billion citizens, as well as implement tighter Communist Party control over the banking system and financial markets, state media reported.
The restructuring of the State Council included moves to stabilize government control over the massive amounts of big data generated by people in their day-to-day interactions, as well as implement stricter governance in the financial sector, analysts told Radio Free Asia.
The “institutional reform plan” is aimed at streamlining the country’s bureaucracy, and putting strategic planning and resource management directly into the hands of party leaders, current affairs commentator Bi Haitao said.
“It’s also about guarding against financial risks,” Bi said. “The establishment of a new financial management bureau will integrate the Securities Regulatory Commission and the Insurance Regulatory Commission into a department directly under the State Council.”
“Controls over China’s financial markets are going to get stricter.”
‘Profound impact on industry’
Meanwhile, a National Data Center in China’s equivalent of Silicon Valley – Beijing’s Zhongguancun district – will bring the management of all online data generated by internet users under one roof and outside of the control of the powerful Cyberspace Administration, he said.
“I believe that this will have a huge impact on law enforcement, the national economy and the internet in China,” Bi said. “It will also have a profound impact on industry, albeit quietly.”
At the same time, the Central Cybersecurity and Informatization Commission will formulate plans for a “digital China,” promote the digitization of public services and social governance, as well as promoting the construction of “smart cities,” state news agency Xinhua reported.
The moves are part of structural reforms that will bring government security and intelligence functions under the direct control of the ruling party, rather than the country's cabinet, suggest a further bid to consolidate political power in the hands of leader Xi Jinping as well as a possible preparation for war, analysts told RFA in recent interviews.
Reforms that will streamline the system for commissioning and applying scientific and technological research, allowing for centralized planning and strategic innovation, are also underway, Xinhua reported, in a move that seems aimed at cutting China's reliance on imported technology.
Last month, Chinese search engine giant Baidu said it would launch its own artificial intelligence chatbot Ernie amid reports that regulators have warned major tech companies not to offer the Microsoft-backed artificial intelligence bot ChatGPT to the public.
The equivalent of Skynet
Song Defu, a Jiangxi-based financial scholar, said the plan will mean far tighter controls over the financial system and over big data.
“The security of the regime and of the financial system are all about the data,” Song said. “Every time you transfer funds out of your personal account, it will immediately show up in the big data, and they will know where the money is going.”
Song said the big data center was the digital equivalent of the Skynet system of nationwide surveillance cameras and facial recognition AI that enables law enforcement to track the movements of any individual anywhere in the country.
“Big data is a form of Skynet, and there is no way that these controls will be relaxed,” he said. “They already started using it during the pandemic.”
He said the role played by big data and algorithms in law enforcement and security would continue to be a crucial one for the government.
“The role of numbers is so huge that it can affect intelligence [conclusions],” Song said.
The cuts to central government jobs show that the government needs to cut its financial commitments now that coffers have been drained by the huge costs of Communist Party leader Xi Jinping’s zero-COVID policy, which ended in December 2022, he added.
“There are too many people who rely on government finances, and actually 5% is not much ... layoffs are only just getting started,” Song said, adding that he expects to see further cuts of 10-15% of government posts at lower levels of government after the National People’s Congress ends, as part of the cost-cutting exercise “in the spirit” of the recent annual session.
The jobs will likely be reassigned to “strategically important” areas of government, the reform plan reported by Xinhua said.
Xi told military and armed police leaders at the National People’s Congress in Beijing on Wednesday that the restructuring and streamlining of military-industrial systems would also be important for a planned approach to strategic and military research, as well as the management of stockpiled resources, the agency said in a separate report.
Translated by Luisetta Mudie . Edited by Matt Reed.