Restricting China or Repairing Loopholes

As the United States moves into the third decade of the 21st Century, policymakers and lawmakers have come to realize, and, accordingly, panic about the imminent need to reform the existing data governance regime. However, efforts to patch up, and thereafter, roll out a sophisticated data governance system is troubled by continuous imbalance and, to some extent, skewed prioritization of policy. Washington failed to seek a way out of the pickle that it set for itself: to compete with China and address its challenges while, at the same time, to enact a consistent, long-term systematic data governance structure. Similar to much of the policy-making in recent years, security concerns over threats posed by China have dominated the minds of policymakers and legislators. The efforts to protect data have therefore been distracted and misled dramatically by the, sometimes hysterical, sense of insecurity about China. The work is incomplete and the prospect for completion is becoming increasingly concerning.

The genuine concern over U.S. data governance reform can be traced back to the early days of the tech industry boom. The fact that the United States had adopted a laissez-faire model to inspire its tech industry to expand into ‘no man’s land’ brought both tremendous opportunities for U.S. businesses to trailblaze globally, alongside enormous challenges to regulate this rapidly inflating market. Under such a laissez-faire model, government actions were only responding to imminent needs for top-down intervention instead of building a long-term consistent system. The loopholes therefore lurked and grew as the market continued to evolve and eclipse the old ‘patchwork’ of reactive policies.

Loopholes and systemic challenges continued to grow into a more serious problem throughout the first decade of the 21st century, which marked a period of globalization and regional economic integration empowered by the global Internet boom. This was also the period when cybersecurity, business data and secrets, and personal privacy became an issue of concern for not just policymakers, lawmakers, and businesses, but also the general public. More focus and questions emerged on how to better strengthen America’s own data governance system. That said, American tech giants continued to thrive during the period when the problem of regulating and managing the Big Techs emerged as a valid and imminent concern for Washington. Despite the growing consensus to ‘do something’ about the Big Techs, Washington lacks the sophisticated consensus and, therefore, consistent motivation to push out specific and enforceable measures to close the loopholes. The system continues to follow the old trajectory despite the fact that the data practices it intended to govern have entered a new generation. 

While the Europeans and the Chinese pushed out their respective systemic, enforceable, top-down, forward-thinking and consistent data governance systems, the United States has continued to struggle at present to push out its own data governance overhaul. The lack of consensus to fix the problem is not the main predicament for Washington anymore. Washington’s passion to compete with China and its significant reluctance to wade through the swamp to reform its data governance system produced a distraction from its intended aim to  improve the situation in the long run. Short-term, eye-catching policy efforts to address the China data threat have dominated national headlines and the minds of Washington policymakers and legislators. The enormous resources spent on the push for the RESTRICT Act, the efforts to pass the American Data Privacy and Protection Act (ADPPA) and the topical yet fruitless public humiliation of TikTok on Capitol Hill are just a few encapsulations of Washington’s big failure to enact concrete, long-term, systemic data governance structure. The work is incomplete. The focus is not on data, but on China.

In order to release itself from its current predicament, Washington should first draw a clearer distinction between the short-term China threats and the long-term need to cement capable and sophisticated data governance structures, and prevent the former from distracting and misleading the latter in future policy discussions. Washington should also work closer with business communities, both domestic and international, to improve its current regulatory measures and increase the pace on its efforts to coordinate with Europe and China on global data governance. Tech businesses are at the forefront of the global digital economy and they will benefit from a better coordinated global data governance system. Washington should make use of business incentives rather than making enemies by categorically shaming Chinese and foreign companies and alienating domestic tech communities.