The data war is likely to heat up in 2021 as countries act to either slowdown or halt the flow of sensitive data across borders – moves that could disrupt business models that rely on free-flowing information, according to Eurasia Group’s Top risks 2021.

The nexus for this clash in 2021 is likely to be what the report calls “the US-China tech cold war.”

“Beijing will accelerate its push for ‘data sovereignty’ as it reduces its reliance on US technology and resists opening its markets to US firms in areas such as cloud computing and social media,” the report says. The US for its part is likely to ensure that the personal data of US citizens does not pass through digital infrastructure that belongs to Chinese companies.

Over to Biden

The Donald Trump’s US government has increasingly put pressure on Chinese companies operating in the US – and also used its political influence to try to restrict those companies operating in other countries. For example, in November 2020, the UK government ordered telecommunications providers to stop installing Huawei equipment in the UK’s 5G mobile network.

“The government ordered the complete removal of the company’s kit from the entire 5G network by 2027, amid pressure from the US,” according to the BBC. While commentators expect a less aggressive approach from President elect Joe Biden, on the issue of data the two leaders are relatively aligned.

“Like their Republican counterparts, many Democrats recognize that Chinese tech firms pose not only economic competition for the US, but also nontrivial data privacy and national security concerns,” according to LSE.

Impact on business

Eurasia Group’s report said that the ongoing issue could force companies into investing in new data centres – and lawyers to navigate the increasingly complex regulatory landscape. In addition, processes which have previously relied heavily on the processing of huge amounts of data scraped from the internet – such as machine learning – may need to be revised if they are to continue to provide insight.

“As professional counterparts grapple with app bans and other barriers, they will hamper the world’s capacity to coordinate responses to global challenges such as climate change,” the report concludes.

China’s data protection

In fact, China has unveiled draft laws on personal data protection. The law plans to give increased privacy rights to individuals and proscribes how data can be handled by businesses and organisations. There are also some extra-territorial provisions that could impact businesses outside China.