Cybersecurity. Photo: VCG

Chinese authorities released a three-year draft plan for the cybersecurity sector on Monday, aiming to create a nearly $39 billion market for an increasingly crucial part of China's broad efforts to strengthen data protection and ensure the sound growth of the sprawling platform economy.

According to the three-year (2021-23) draft plan released by the Ministry of Industry and Information Technology (MIIT), the scale of the cybersecurity industry is expected to exceed 250 billion yuan ($38.62 billion) by 2023, with a compound annual growth rate of over 15 percent.

China intends to make breakthroughs in several core technologies for cybersecurity and reach an advanced level by 2023, according to the plan. The integration and innovation of emerging technologies and cybersecurity will accelerate significantly.

The research and application of data security technology should be strengthened to further optimize data security management, classification of safety protection and other production functions, per the plan.

Enterprises in crucial sectors are encouraged to increase investment in cybersecurity, separately list budgets, and promote the deployment and application of cybersecurity technologies and products. The cybersecurity investment in key industries such as telecommunications should account for 10 percent of the total investment in informatization.

"The supervision of cybersecurity will be achieved mainly through technology and the regulatory mechanism," Fang Xingdong, founder of Beijing-based technology think tank ChinaLabs, told the Global Times on Monday.

China's technological advances in the cybersecurity industry are still behind other countries like the US, while the regulatory mechanism is gradually improving, said Fang. 

 "We need to focus on the cybersecurity industry's development at the moment as illustrated in the draft plan and drive its development via the market," he noted.

As China has been bolstering the protection of cybersecurity, regulations and laws have been continuously promulgated in recent years, and the industry has entered a bright phase for development, Liu Juan, a senior analyst from CCID Consulting, a research institute under the MIIT, told the Global Times on Monday.

The industry needs to reach a corresponding level to complement the intensity of regulatory supervision, said Liu.

Chinese authorities have stepped up efforts to govern data flows and private information protection following the cybersecurity regulator's review of the country's top ride-hailing firm, Didi Chuxing.

The Cyberspace Administration of China (CAC) released a draft revision over the weekend for cybersecurity review measures, especially for Chinese companies that seek IPOs in overseas markets. 

The measures include a new threshold that businesses holding data of more than 1 million users in China must undergo a regulatory review before applying for an overseas IPO. 

This provision shows the country's resolve to rein in potential risks in connection with national security brought on by domestic businesses that hold oceans of data amid their cross-border moves, analysts said.

Three more internet platforms - US-listed job recruiting platform Boss Zhipin, and Yunmanman and Huochebang, two truck-booking platforms under the Full Truck Alliance - were also investigated for cybersecurity risks.

Data security has been elevated to a national security priority and its role as the cornerstone for these companies and the economy should not be understated as data has become a new battleground in the China-US technological race, said Liu Dingding, a Beijing-based independent tech analyst.

Data protection and security has become a national strategy and top design, especially when each country is prioritizing data localization to keep its data local and safe, said Liu, pointing to the US' crackdown on Chinese apps.

Even though TikTok, the popular video-sharing platform owned by Chinese start-up ByteDance, emphasized that the app's data is stored in the US and Singapore, not in China, the US government still cracked down on the app last year in the name of national security.

US President Joe Biden signed an executive order in June revoking the Trump-era bans on TikTok and WeChat but replaced them with a broader review of foreign apps, including those from China.