The data industry, an emerging industrial sector, has been frequently mentioned in official documents this year: at the beginning of the year, the National Data Bureau and 17 other departments issued a document stating that by the end of 2026, a relatively complete data industry ecosystem will be formed, with an average annual growth rate of the data industry exceeding 20%; in May, the National Development and Reform Commission and 4 other departments proposed to cultivate and strengthen the data industry, and develop a batch of data merchants and third-party professional service organizations; on July 22, the National Data Bureau stated that it will accelerate the introduction of policies to support the development of the data industry. What is the data industry that has attracted attention from all sides, and what are the highlights of its development?

Last year, China's database market size exceeded 52 billion yuan

As a new type of factor of production, the scale of data is growing exponentially. According to the latest survey statistics, in 2023, the total national data production volume reached 32.85 zettabytes (ZB), equivalent to the total digital resource volume of more than 10 million Chinese National Libraries. These massive resources are rapidly integrating into production and life, improving the efficiency of economic and social operations, and also giving birth to new forces in the industry, that is, the data industry.

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Zhang Wang, Director of the Data Resources Department of the National Data Bureau, stated that data not only has a huge economic value in itself, but when applied properly, it can also significantly improve the allocation efficiency of other factors of production such as labor, capital, and technology. Therefore, whether it is cultivating new momentum or improving total factor productivity, it is necessary to accelerate the development of the data industry, to seek power from data, and to seek potential from data.

What specific forms does this emerging industry include? What is the current development situation?

Industry insiders analyze that the data industry is the industrial form formed in the process of developing products and services using data technology for data resources. Its development covers many aspects such as data collection, storage, computing, management, application, and circulation and trading.

Looking at the industry scale - the China Communications Standards Association released a research report on July 16, stating that the Chinese database market size exceeded 52 billion yuan in 2023 and is expected to reach 93.029 billion yuan by 2028. Reports from institutions such as the Shanghai Data Exchange show that China's data trading industry has experienced a stable and rapid growth phase in the past few years. In 2022, the overall market size reached 87.68 billion yuan, accounting for 13.4% of the global data market trading scale and 66.5% of Asia, and it is expected to exceed 500 billion yuan by 2030.

Looking at the business entities - the data industry mainly includes enterprises engaged in data technology innovation, resource development and utilization, data technology empowerment applications, data products and service circulation and trading, and data infrastructure construction. According to statistics from relevant institutions, in the past 10 years, the number of Chinese data merchant enterprises has grown from 110,000 to more than 1 million, becoming an important part of the data industry and playing a key role in activating the value of data elements.

"In the new stage of data elementization development, we have seen new factors of production, new data spaces, new infrastructure, and have also witnessed the emergence and development of new industrial forms." Professor Zhang Xianghong from the International Research Center for Information Management Theory and Technology at Beijing Jiaotong University believes that in recent years, the scale of the data industry has grown rapidly, key data technologies and products have achieved breakthroughs, and the development of the industry has been significant.

Most provinces have established data development promotion centers.The rapid development of the data industry has attracted an increasing number of participants to engage in it.

On July 26th, Changsha Digital Group Co., Ltd. was inaugurated. On the same day, Changsha Digital Group signed agreements with two banks to integrate massive government and industry data, tailoring corresponding data products to the banks' personalized needs, helping banks to manage loans more scientifically before, during, and after disbursement, and improving efficiency.

Tang Ning, Chairman of Changsha Digital Group, stated that the group will delve into four major business sectors: digital government construction, data element operation, digital social services, and digital ecosystem creation. By producing and gathering data resources, processing and governing data products, and empowering data value scenarios, the group aims to achieve sustainable development in data element operation. It is reported that the group is striving to achieve a revenue of 1 billion yuan by 2035.

A month prior to this, Hunan Data Industry Group Co., Ltd. was officially inaugurated, marking the successful establishment of another provincial-level data group. According to the National Data Bureau, since its establishment, all 31 provinces and the Xinjiang Production and Construction Corps have completed the formation of their institutions, with most provinces setting up data development promotion centers and forming data groups.

There are new faces of data groups with diverse businesses, as well as new members specializing in certain areas of the data industry.

In Sichuan, Hua Cun Zhi Gu Company focuses on various types of raw data storage, launching a series of more than 30 products such as computational storage, all-flash storage, and converged storage. In 2023, the company's contract amount reached 500 million yuan. "As algorithms and computing power continue to improve, data has become the key to the future development of artificial intelligence. According to the company's research on some customers, their data access needs have increased more than tenfold compared to the past," said Du Xiaohua, Chief Technology Officer of Hua Cun Zhi Gu. In response to the storage needs of artificial intelligence, Hua Cun Zhi Gu has released a series of related products.

Focusing on the data storage industry, efforts are being made from local governments to enterprises in Sichuan Province. The province has clearly proposed to accelerate the development of the storage industry, striving to form a basic storage industry system that is technologically advanced, prosperous in application, secure and controllable, and strongly supported by 2025, with the overall scale of the storage industry breaking through 500 billion yuan.

From storage to trading, the development of the data industry has become a consensus among more and more regions. Data shows that by the end of 2023, dozens of provinces and cities across the country have launched public data operation platforms, and more than 20 provinces and cities have established specialized data trading institutions. Guangdong, Shandong, Jiangsu, and Zhejiang have the highest number of data trading institutions in the country. The Shanghai Data Exchange has launched a data product registration hall and started a trial operation of data product registration. The Fujian Big Data Exchange trading platform has preliminarily achieved interconnection with the provincial public data development service platform, synchronizing more than 400 public data catalogs, more than 10,000 data items, and incubating more than 50 public data products.

Further improve the level of development and utilization of data resources.

As a new force in the industry, the data industry is developing rapidly, but it also faces challenges.In May of this year, the "National Data Resource Survey Report (2023)" was released to the public. This marks China's first comprehensive "health check" of data resources, and the results indicate that China's scale advantage in data production has essentially been established, yet the potential of vast amounts of data and rich scenarios remains to be unleashed. In 2023, the national new data storage volume reached 0.95 Zettabytes (ZB), with only 2.9% of the total production being preserved; approximately 40% of the data that enterprises have not used in a year, and the lack of data processing capacity leads to a significant undervaluation and difficulty in mining and reusing a large amount of data; the demand side in data exchanges is 1.75 times that of the supply side, with a data product transaction rate of 17.9%, indicating a low matching rate between supply and demand within the data market.

Jiang Yan, the director of the National Industrial Information Security Development Research Center, believes that currently, the data storage space basically meets the storage needs, but from a long-term perspective, a moderately proactive layout is still needed to satisfy the future industry development's demand for massive data. Looking at the storage locations, the proportion of data cloud storage is slightly lower than that of terminal storage, especially for key enterprises in the industry, where the proportion of data terminal storage exceeds 70%, and the phenomenon of decentralized storage is quite common, making data interconnection and reuse more challenging.

"Overall, the level of development and utilization of data resources needs to be further improved," said Zhang Xianghong. Efforts should be made to address issues such as unwillingness or inability to develop data, and the difficulty in using data, in the process of data resource supply, circulation, and utilization. It is essential to enhance the overall level of data technology and products and to accelerate the development of data enterprises.

To better promote the development of the data industry, the National Data Bureau recently stated that it will focus on better leveraging the role of market mechanisms to create a more equitable and dynamic market environment, and study and formulate policies to promote industrial development. "We will clarify the connotation and extension of the data industry, cultivate a diversified market operating entities in response to market demands. We will leverage the decisive role of the market in resource allocation and support enterprises in accelerating development in areas such as resource aggregation, technological breakthroughs, product services, circulation transactions, and infrastructure," said Zhang Wang. He also mentioned that policy tools should be effectively utilized, with corresponding policy arrangements made in terms of investment policies, talent training, and industrial clustering.

The "Digital China Development Report (2023)" released on June 30 predicts that this year, the construction of digital infrastructure will further accelerate. The formulation and implementation of policies regarding data property rights, circulation transactions, revenue distribution, and security governance mechanisms will make positive progress. The data industry will develop rapidly and further penetrate other industries, driving the transformation and upgrading of traditional industries.