With a robust digital economy, backed by “one country, two systems”, the Guangdong-Hong Kong-Macao Greater Bay Area can help the nation lead in shaping global data governance rules through a pilot program for international cooperation, according to industry experts.

However, to protect individual privacy and public interest, it’s necessary to address data security risks with measures like privacy computing and regulatory sandboxes.

Three cities and development zones in the 11-city Greater Bay Area cluster -- Guangzhou, Shenzhen and Zhuhai’s Hengqin area-- were recently listed among China’s initial 10 pilot locations for international cooperation in the data sector, as the country explores new approaches to strengthen cross-border data cooperation.

Other cities and regions include Shanghai, Hainan province, Changsha in Hunan province, Nanning in Guangxi province, and Fuzhou, Xiamen and Quanzhou in Fujian province.

The three test sites in Guangdong province are adopting different priorities based on their own strengths. With Nansha as the base, Guangzhou – Guangdong’s provincial capital -- will focus on facilitating data flows for cross-border trade and medical research. Shenzhen plans to leverage Qianhai to boost data collaboration with Singapore, other member states of the Association of Southeast Asian Nations and countries and regions involved in the Belt and Road Initiative.

Hengqin will build on ties with Brazil to develop new cooperation channels with Portuguese- and Spanish-speaking countries.

According to the National Data Administration, the pilot program covers 20 major tasks in six fields, including data infrastructure, standards and protocols, international cooperation platforms, cross-border service ecosystems and digital cooperation scenarios.

Wan Lu, director of the Hong Kong, Macao and Taiwan Research Center at the Guangdong Academy of Social Sciences, said that in the current era, data regulations are becoming a key factor influencing international economic and trade order, as well as the digital economy’s competitive landscape.

In his view, the primary goal of promoting global data cooperation is to address two major bottlenecks hindering the development of digital economy – the significant demand for high-quality data in AI and its related industries, and the barriers to data flow across the globe.

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He noted that AI applications’ daily token consumption, in terms of units of data processed by AI models in China, had surged from 100 billion at the beginning of 2024 to above 140 trillion in March this year – a more than 1,000-fold increase in two years.

Yet, due to regulatory differences across legal systems in different regions worldwide, compliance costs for businesses and research institutions are extremely high. There’s an urgent need to address challenges like mechanisms building, ownership determination, and data standards.

Cao Zhongxiong, director of the Digital Economy and Global Strategy Department at the China Development Institute, noted that the Greater Bay Area is home to major digital-economy companies and a large number of cross-border e-commerce businesses. Exchanges between Guangdong and the Hong Kong and Macao special administrative regions have created huge demand in areas such as cross-boundary payments.

He described the two SARs as an important first stop for Chinese mainland companies expanding overseas and a testing ground for cross-border data flows.

Ma Yanxin, director of the School of Law’s Research Center for Digital Government and Digital Economy at South China Normal University, said the world has yet to form unified and mature rules for cross-border data flows. China’s digital industry leads the world in terms of scale and application scenarios, and is well-positioned to take the lead in establishing global data governance rules.

Building on the pioneering efforts of the three pilot regions, the Greater Bay Area has great potential to develop into a “data port” connecting the region with the world, while contributing Chinese approaches to data governance internationally.

Wan said data security and compliance risks remain the primary challenges to advancing cross-border data flows. For example, healthcare data is regulated as “sensitive personal information” on the mainland, and certain healthcare data may also relate to the public interest or national security, triggering stringent security management requirements for cross-border data transfers. This is also a key reason for its value being underutilized despite the large volume of healthcare data available, he said.

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Wan suggests facilitating mutual recognition for data classification standards, compliance certification systems, and security assessment mechanisms in order to lower the institutional costs of cross-border collaboration.

On the other hand, organizations can leverage trusted data spaces and utilize technologies, such as privacy computing, to enhance the efficiency of cooperation while ensuring data security, he added.

Cao suggests that to prevent data leaks, pilot projects could first be carried out with platform enterprises, strengthening compliance guidance for them. The regulatory sandbox tool should also be leveraged to control risks at the outset.

Yao Xi contributed to the story

Contact the writer at bingcun@chinadailyhk.com