China’s government now allows companies to register data as assets

Chinese firms generate staggering amounts of data daily, from ride-hailing trips to online shopping transactions. A recent policy allowed Chinese companies to record data as assets on their balance sheets, the first such regulation in the world, paving the way for data to be traded in a marketplace and boost company valuations. 

But uptake has been slow. When China Unicom, one of the world’s largest mobile operators, reported its earnings recently, eagle-eyed accountants spotted that the company had listed 204 million yuan ($28 million) in data assets on its balance sheet. The state-owned operator was the first Chinese tech giant to take advantage of the Ministry of Finance’s new corporate data policy, which permits companies to classify data as inventory or intangible assets. 

“No other country is trying to do this on a national level. It could drive global standards of data management and accounting,” Ran Guo, an affiliated researcher at the Asia Society Policy Institute specializing in data governance in China, told Rest of World. 

In 2023 alone, China generated 32.85 zettabytes — more than 27% of the global total, according to a government survey. To put that in perspective, storing this volume on standard 1-terabyte hard drives would require more than 32 billion units.

The numbers are climbing. By 2025, global data generation is projected to hit 174 zettabytes, or 1 sextillion bytes, with China’s share expanding to 48.6 zettabytes — the fastest growth rate of any nation, according to a report from the International Data Corporation, a U.S.-based marketing intelligence firm. 

As early as 2013, shortly after taking power, President Xi Jinping compared China’s troves of data to oil resources: “The vast ocean of data, just like oil resources in the industrial age, contains immense productive power and opportunities. Whoever controls big data technologies will control the resources for development and have the upper hand.”

But a slow uptake of logging data as assets since the government launched the accounting policy in January last year suggests Chinese companies are being cautious. By late 2024, only 55 listed and 228 non-listed companies in China — out of nearly 60 million registered companies — had recorded data assets on their balance sheets, according to an estimate from Shanghai Jiao Tong University. Of these, 18 were primarily in the IT services and software industries. 

Tech companies that are data-rich are well-positioned to benefit from logging data as assets to turn the formalized assets into tradable commodities, said Guo. But companies must first invest in secure storage and show that the data is legally obtained in order to meet strict government rules on data security. 

“This can be costly and complex,” he said. “Not all data qualifies as an asset, and companies must meet stringent requirements.” 

Even China Unicom, a state-owned enterprise, is likely complying with the new policy due to political pressure rather than economic incentive, said Guo, who conducted field research in China last year on the government push for data resource development. The telecom operator did not respond to a request for comment. 

Private technology companies in China, meanwhile, tend to be protective of their data. A Chinese government statement in 2022 pushed private enterprises to “open up their data.” But smaller firms could lack the resources to meet the stringent data storage and consumer protection standards, experts and Chinese tech company employees told Rest of World. 

It is “super complex” to adopt new accounting policies, said the chief operating officer of a mid-sized Beijing-based private technology firm. 

“Smaller companies are watching what bigger firms are doing first. There is a lot of interpretation involved, so we rely on standard-setters,” said the executive, who asked to remain anonymous because of risks associated with commenting on government policies. The executive added that minimal adoption of a new accounting practice after a year isn’t unusual even in the West. 

Chinese officials have stepped up the pressure in recent months. In late December, four government agencies issued a joint statement pledging to protect companies’ data resources if more “open up their data service capabilities.” The director of the National Data Administration, Liu Lehong, said in a speech in July in Beijing that “we must build a digital economy where data is the key factor of production.” The NDA was created in 2022 to oversee national data governance and integrate fragmented local markets into a “unified national market for data.” 

It builds on Chinese regional governments’ past efforts to build a data trading market, encouraging enterprises to trade data products and leverage data assets for bank loans. The push began in 2015 with the launch of the Guiyang big data exchange, which drew attention over reports that it stored more data than Chinese e-commerce giant Alibaba. 

Today, most provinces in China have their own local data exchanges. The government wants to make data into something companies can buy and sell within state-controlled marketplaces, Alex He, a senior fellow at Canadian think tank Centre for International Governance Innovation, told Rest of World.   

Yet those localized early attempts at monetizing data haven’t been smooth, according to He, who researches China’s global economic governance. Some of the data trading platforms “failed due to weak standards, data quality issues and low trust. … There is still a lack of clear rules,” he said. 

This month, the NDA announced that it will launch a national data resources platform on March 1, a centralized hub where government bodies can list public data available for sale or trading. 

Some tech companies are slowly navigating this new territory. Kaipuyun, a mid-sized big data solutions provider, used its own AI model to process and validate data sets for financial reporting. Specializing in government contracts, Kaipuyun’s approach shows how even a smaller firm can make data logging viable, said He. But it also underscores the policy’s uneven playing field: Without advanced technological infrastructure, many companies may find themselves excluded from new opportunities to boost their balance sheets, He said. 

These challenges are even more pronounced for Chinese multinationals such as Alibaba and Baidu, where the implications of recording domestic data assets on their overseas valuations remain unclear, said He. 

Multinational companies face “vast risks and high costs of compliance” because different countries have different rules on data, He said, citing TikTok as an example. Despite positioning itself as a global platform, TikTok has faced intense scrutiny and regulatory hurdles, particularly in the U.S. and Europe, including over data security and potential government influence. 

While China’s policy on data assets could set a global example, it’s still unclear how other countries or international bodies will respond. No global standards exist for measuring data as assets, though such discussions are underway at the United Nations.

But by adopting national standards for data assets early, even if the vast majority of Chinese companies do not sign on, Beijing is positioning itself to influence global accounting norms, said Guo. Institutions like the U.N. are exploring updates to the System of National Accounts — a set of recommendations on how to compile measures of economic activity — to better account for intangible assets.  

Despite the many challenges and lukewarm interest from businesses so far, Beijing remains steadfast in pushing its vision for data monetization to revitalize a slowing economy, said Guo. 

“Beijing is definitely pushing for a gold rush to improve and make use of existing troves of data,” Guo said. “While data isn’t intrinsically valuable, it’s vastly available and the government wants companies to both improve the quality and transparency of data collection to derive value out of it.”