Commission on China-US economic and security issues: data is a critical resource for US, Congress should push for changes to accounting rules for intangibles
Author
Martin Croft
PR & Marketing Manager
The U.S.-China Economic and Security Review Commission, appointed by Congress to provide recommendations for how America interacts with China, published a report analysing the Chinese Government’s campaign to turn data into economic and political power and how it could impact the US.
The report, published 18/08/26, can be accessed from the Commission’s US Government website here.
In the report, titled The People’s Republic of Data: How China Is Turning Data into Capital, the commission recommends that the U.S. should look at adopting a similar national strategy, given the importance of data to AI models, and also because data, as an intangible, is now being seriously considered as collateral in financing companies.
The key findings of the report are:
In 2020, China designated data as a factor of production, formalising its intent to make data into a key building block for economic progress. This decision elevated data to a strategic resource and compelled ongoing efforts to manage the creation, valuation, exchange, and productive use of data.
Beijing’s ambitions extend beyond economic growth. It is marshalling data to drive productivity, power its AI and technology goals, and improve its intelligence collection and military capabilities. Commercial gains are one facet of a wider contest with the United States over data as a source of national power.
China’s data strategy mirrors the top-down design of its industrial policy. By incentivising local governments to deploy, commercialise, and monetise data, Beijing is fostering experimentation with data applications.
China’s data commercialisation drive enables strict state oversight of data. Five years after a crackdown on big tech cast a dampener over Chinese entrepreneurship, China’s current policies encourage aggressive data monetisation in an environment controlled and monitored by the world’s foremost surveillance state.
China’s initial successes include the adoption of official data exchange infrastructure and published use cases for data applications. Despite challenges of low-quality data and hesitancy from private firms to participate in the state-led data economy, China has continued to adapt policy to encourage greater participation in the data economy.
China’s commercialisation effort targets the data that remain scarce. With the open web largely exhausted as a training resource, competitive advantage rests on enterprise, operational, and physical world data that cannot be scraped, and China’s exchanges, accounting rules, and industrial data programs are aimed at precisely these categories.
The report points out there is a tension between the Chinese Government’s desire for control over data and its plans to corner data as an asset which has commercial value. As the document says:
“At the same time, commercialisation is just one piece of a larger Chinese effort to dominate data as an asset. That effort encompasses protecting the data China already holds, acquiring as much foreign data as possible, and integrating and synthesising all incoming data to extract value as well as military and intelligence benefits from them. Commercialisation advances that broader project even where its immediate aims are economic: the same push to aggregate, standardise, and circulate data also renders them more accessible and usable to the state.”
It explains how China has legislated to control data with “the 2016 Cybersecurity Law, the 2021 Data Security Law, and the 2021 Personal Information Protection Law, which together set firm restrictions on private collection, use, and transfer of data while reserving broad state control over all data-related activity.”
Simultaneously, however, “Chinese officials recognised the productivity gains data analytics would deliver and began laying the regulatory foundation for data commercialisation.”
China set up a number of government-run data exchanges over the past few years; but these suffered from a lack of regulations on buying and selling data, poor quality data, and the fact the initially exchanges were competing with each other. The report explains that in 2024, “24 data exchanges committed to align on standard naming conventions, transaction procedures, and security measures and to increase interoperability between various Chinese marketplaces.” They also agreed to offer data buyers and sellers connections to third party services, including data cleaning and packaging, legal and compliance advice, and valuation services.
The commission’s report adds:
“Annual transaction value on each of the largest exchanges, including Guiyang, Shenzhen, Shanghai, and Beijing, exceeded renminbi (RMB) 1 billion (US $150million) for the most recent available data… National Data Administration (NDA) Director Liu Liehong announced at the end of 2025 that China had at least 4,000 interconnected data exchanges, infrastructure operators, and data merchants collectively offering more than 13,000 data products and services.”
In 2023, the study says, “China’s Ministry of Finance released the Interim Provisions on Accounting Treatment Related to Enterprise Data Resources, allowing firms and local government financing vehicles (LGFVs) to treat data either as an intangible asset or inventory on their balance sheets.” Usually, under accepted international accounting rules, data would be on a company balance sheet as a cost, with no estimate for value. China’s rules allow them to be capitalised, which means they can be included on Chinese firms’ balance sheets.
Building on that rule change, a number of Chinese companies have negotiated bank loans using their data as collateral. Separately, China also allowed the creation of data Asset Backed Securities (ABS), based on pooled cash flow streams for repayment of ;loans; the report says these “had reached RMB 20 billion cumulatively through May 2026 compared with a total RMB 5 billion in 2025.”
The paper asserts:
“China - like any nation - faces obstacles in using industrial policy to turn data into a significant source of economic growth and dynamism. Challenges remain in implementing its vision of data as a shared resource. However, the impetus to treat data as an asset and subsequent experimentation is spurring further innovation in digital services and Chinese sources claim it is lowering costs for various industries.”
The report concludes with a list of proposals for Congress. These include:
China has designated data a factor of production alongside land, labour, capital, and technology, elevating them to strategic economic assets. The United States has made no comparable national decision. Congress should consider whether the United States needs a national data strategy that treats data as an economic asset.
China’s experimentation with data is accelerating the digitization of traditional industries and the development of deployment-driven physical AI applications. China’s vast manufacturing and installed robotics ecosystem provides a pool of data for physical applications, an advantage all the more salient given the importance of high-quality data to AI development in general and embodied AI in particular.
China’s Ministry of Finance has issued accounting rules that let companies record data as an asset on their balance sheets, an early step toward treating data as an asset class. The United States has no comparable standard, leaving the value of corporate data invisible in financial reporting. Congress should consider whether U.S. accounting standards should recognise data as an asset and encourage the Securities and Exchange Commission and the Financial Accounting Standards Board to quickly examine the question.
China wants to lead on global standards for firm-to-firm and government-to-firm data interoperability. That is a potential danger to the US. Congress should consider how the United States, working with allies and partners, can lead on data interoperability and transaction standards rather than ceding that ground to China. Standards are difficult to revise once adopted. China is already presenting its data accounting framework to the International Accounting Standards Board as that body looks at how intangible assets should be treated in the future.
Chinese local governments and state-run entities have led in valuing and listing data assets under central government direction to improve the collection, sharing, and application of data. U.S. federal agencies hold extensive data assets, including agricultural, geological, and health research holdings, but they face no requirement to assess their value. Congress should consider requiring federal agencies to inventory and assess the value of their data holdings within six months, establishing a baseline for protection and productive use.
