Prof. Xue Addressed at APIDE Asia-EU Dialogue on Digital Economy

The withdrawal of the United States from the Trans-Pacific Partnership (TPP) process, and the current deep freeze of U.S.-EU negotiations on a Trans-Atlantic Trade and Investment Partnership (TTIP) has generated gaps in plurilateral efforts to promote the Digital Economy through targeted policy initiatives and regional commercial frameworks. It has become difficult to address emerging digital challenges in areas like privacy and intellectual property in key economic sectors such as healthcare, financial services, and government procurement despite agreement among all parties that measures to support the cross-border flow of data are central to economic growth and innovation.

A related objective of this first dialogue held in Washington DC on November 6-7, 2017, co-organized by Asia and Europe Dialogue on Growing the Digital Economy and John Hopkins University SAIS Center for Transatlantic Relations was to mobilize a network of academic experts on the Digital Economy across Europe and Asia. Improved and sustained interaction among the scholarly, business, government, and NGO communities is likely to contribute to the development of sound policies supportive of growth and continued innovation in digital markets. Prof. Xue took part in the Dialogue and chaired the Session I:  Moving from an “Internet” to a “Digital” Economy and gave a keynote in Session V:  Managing Transformative Digital Technologies.

As stated by Prof. Xue, more than 800 million Chinese are online. China boasts the largest online consumer market and is second only to the United States in the size of its B2B online commerce. Malaysia’s Central Bank has just introduced guidelines for mobile payments and the country is among the largest centers for data processing globally. Japan is investing heavily in next generation technologies, prominently AI and robotics. The Republic of Korea boasts global industry leaders, such as Samsung and Naver. India has also fully embraced the potential of the Digital Economy. A recent example is the government’s push to reduce the amount of paper money in circulation and grow the digital payments space.

Yet overall the Asia-Pacific region is less connected digitally among its constituent parts, and less connected to North America and Europe than the other two regions are connected to each other. Europe has the largest share of interregional data flows of all regions, and is pushing international norms on a series of issues related to the digital economy that could have significant repercussions in the Asia-Pacific region. European companies account for 21% of Internet of Things (IoT) companies globally, compared to a 5% share for Chinese and Japanese companies. European companies account for 32% of big data companies globally, compared to 6% for Chinese and Indian companies and 2% for Japanese and Korean companies. Yet Europe suffers problems of fragmentation, scale, and divisions between “network-ready” western and northern Europe and less-ready countries in southern and eastern Europe.

Asia-Pacific views on the Digital Economy are rooted more in an economic imperative than a social perspective. There are also significant implications flowing from the EU’s view of data protection as a fundamental human right in sharp contrast to China’s view of data security as a fundamental state right. The General Data Protection Regulation (GDPR), to be implemented by the EU in May 2018, has sparked deep concerns across the Asia-Pacific region regarding regulatory costs, market access and the impact on innovation and growth. European views on privacy and Asian concerns about the extent to which such views may be pushed via regulation might be addressed in part, but not fully, through better technology. National and regional regulation needs to be grounded in how the technology actually operates. The diversity in approaches to the management of data seen in Asia may be more functional than the conformity demanded by the European approach. “Adequacy” provisions are moving forward between the EU and Japan, and most likely between the EU and the Republic of Korea, with uncertain implications for other Asia-Pacific countries or broader international norms.

The event helped to frame and energize a dialogue between Asian and European scholars with the goal of supporting parallel discussions in government and private sector policy circles on the tools and processes essential to the management and growth of the Digital Economy.  The outcomes from this meeting will be further developed at subsequent sessions planned for Tokyo (Spring 2018) and Brussels (Fall 2018).

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