Shanghai is building a mammoth electronic platform to trade data such as personal credit records and consumer information, as part of the city’s efforts to stay ahead of others at the forefront of technological innovation in China. Keven Tang, Chief Executive of the Shanghai Data Exchange Corp, told the South China Morning Post that the company aimed to account for one-third of the national data trading volume by 2020 while helping the city attract more promising technology businesses.

“The overall market size is expected to reach CNY100 billion in 2020, and there is already strong demand for buying and selling data sets now,” he said. “We will help companies improve their business efficiency by making better use of the data.” The city of Shanghai has been rolling out a series of incentives to draw tech companies and talent from around the globe as it seeks to retain its status as China’s economic locomotive amid rising competition from other cities. The Shanghai Data Exchange was established in April at the instigation of the city government. It is based in the city’s Jing’an district, with the district government providing land for its offices and some of the data for trading.

“Digital businesses are hungry for data and a trading platform is needed,” said Cao Hua, Partner at Unity Asset Management. “Shanghai will do more to attract more technology firms in future to promote more digitalized commerce.” Big data technology, or analyzing and processing complicated data sets to accurately assess risks of transactions such as in granting credit or spotting consumer demand, is being widely adopted by Chinese e-commerce, fintech and other firms. Tang estimated that in 2017, the total transaction value of data among Chinese businesses could be as high as CNY20 billion.
Shareholders in the exchange include state-owned telecom companies China Telecom and China Unicom and privately owned data service provider Zamplus Technology. The exchange’s registered capital is CNY200 million and its clients include financial institutions, internet firms, manufacturing businesses and government authorities. The exchange allows trading of unprocessed base data such as personal information, credit records and figures related to commercial transactions. It uses encryption technology to ensure privacy when data related to consumer behavior and corporate operations are traded. Clients will be exempt from paying a fee to the exchange for the transactions conducted on the platform before the end of 2018.

About 12,000 businesses controlled by Shanghai’s municipal government have also pledged to plough CNY800 billion annually into industries like hi-tech manufacturing in the next five years to help Shanghai regain its status as China’s economic juggernaut. Jin Xingming, Director of the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), said that the state-owned enterprises (SOEs) would also become the main force behind technological advances as Shanghai strives to become a global innovation hub.