By CoinAINews Staff
A U.S. congressional advisory body has warned that China's
systematic approach to collecting and commercializing data could give it a
strategic advantage over the United States in the global artificial
intelligence race.
The U.S.-China Economic and Security Review Commission
(USCC), an independent panel that advises Congress on national security
implications of the U.S.-China relationship, released a report on Tuesday
highlighting Beijing's strategy of treating data as a strategic national asset.
The Data Gap That Matters
As major U.S. AI companies increasingly face limits in
sourcing additional high-quality training data from the open internet, China is
systematically collecting domestic "enterprise, operational and
physical-world data that cannot be scraped"—data that is crucial for
training AI tools designed for business use, autonomous vehicles and humanoid
robots.
"Over the last half decade, China has been able to
consolidate data, find ways to label it and refine it, and hoover up new data
and make sure it's quickly made available to entities," said Mike Kuiken,
the commission's vice chair.
The report identifies China's advanced manufacturing and
industrial robotics ecosystems as potential sources of a data advantage. These
sectors provide a vast pool of high-quality data for "embodied AI"
applications—AI systems that operate in the physical world, such as
robots—giving China a potential edge in developing robotics software for both
commercial and military uses.
Beijing's Top-Down Data Strategy
China formally designated data as a core "factor of
production" in 2020, elevating it alongside land, labor, capital and
technology. The country established the National Data Administration in 2023 to
oversee nationwide data standardization and classification, with a mandate to
build a unified national market for data trading.
The report describes Beijing's approach as the same
"top-down" industrial policy that has made China a leader in advanced
manufacturing. Rather than leaving the development of a data economy to market
forces, China is building infrastructure where participants can exchange
data—fostering third-party services like data valuation, analytics and
financing.
Chinese firms have already begun listing proprietary
datasets on regional data exchanges in cities including Shanghai, Shenzhen and
Beijing, while accounting rules allow companies to record qualifying data
resources as assets on their balance sheets.
The Risk of Falling Behind
The USCC warned that the United States risks ceding global
leadership in setting international data standards to China, which would give
Chinese firms a lasting advantage in industries where data is a central pillar
of development.
"Standards are difficult to revise once adopted,"
the report said. "Engaging now would be more effective than seeking to
unwind an established standard later."
The report also highlighted risks for U.S. firms operating
in China, who increasingly "risk running afoul of China's strict data and
cyber governance regimes" as Beijing tightens regulatory oversight of
cross-border data transfer.
A Call for U.S. Action
The USCC's top recommendation was straightforward: Congress
should consider developing a national data strategy that treats data as an
economic asset—similar to what China has already implemented.
"We recommend that U.S. Congress think about a national
data strategy and how the U.S. government could treat data as an economic asset
as our number one recommendation," Kuiken said.
The Bottom Line
The commission's report underscores a growing concern in
Washington: that the AI race is no longer just about chips and computing power,
but about who can best harness the vast, messy world of real-world data.
China has been building an institutional framework to
collect, standardize and facilitate the commercialization of data across its
economy. Whether the U.S. responds with a similar strategy—or leaves it to
market forces—could shape the next decade of AI competition.
This article is for informational purposes only and does
not constitute investment advice.
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