East Tech West

Data privacy issues may be capturing more attention in China

Key Points
  • Facebook’s high-profile issues with data collection have captured China’s attention, says Ziyang Fan, head of digital trade at the World Economic Forum.
  • Two Chinese health care start-ups say they separate personal records from medical information.
  • Baidu CEO Robin Li's comment earlier this year that Chinese people don't care about data privacy also provoked popular backlash.
Passengers look at smartphones on a subway train on April 6, 2017 in Chengdu, China.
VCG | Getty Images

A wave of security breaches has made protecting personal information a greater priority for consumers around the world.

Executives say that's even been been true in China, where rapid adoption of innovative mobile services has created a horde of data.

Paying with a smartphone using Alibaba-affiliated Alipay or Tencent's WeChat Pay has become ubiquitous, while WeChat has become the default messaging app for both personal and business discussions. As a result, China's tech giants have accrued huge amounts of information on their users, which some worry could be used inappropriately.

It seems most Chinese are willing to give up details about their financial, personal and professional lives for the sake of convenience, but that may be changing as consumers become more aware of security issues and companies work to improve collection practices. This week, the China Consumers Association released a report stating that 91 of 100 apps it surveyed may be suspected of excessive data collection.

"Recently in the past year or (so), because Facebook had this issue, the data privacy issue has also captured the Chinese consumers' attention and the government's attention," Ziyang Fan, head of digital trade at the World Economic Forum, said in an interview with CNBC last week.

He noted that Baidu CEO Robin Li's comment earlier this year that Chinese people don't care about data privacy also provoked popular backlash.

While concerns grow about how Facebook, Google, Alibaba, Tencent and governments might use personal data shared online, some smaller Chinese companies are actively trying to protect data.

"In China, the medical industry, also the technology industry, the technology companies that are working with AI and also with a lot of data, we all have a common agreement that the symptom data can be collected in a big chunk for big data analysis and also AI training," said Jim Wang, chairman and founder of Nova Vision. "But personal information must be delinked, desensitized."

Wang was speaking Wednesday at CNBC's East Tech West conference in the Nansha district of Guangzhou, China. Nova Vision is gathering retina data to develop an artificial intelligence system that can diagnose diseases from an eye scan.

Eric Ho, group CEO of health care-focused payments processor IHD Pay, also said during a conference session that his company separates medical data from personal information.

"We take away the name, the identification number of the patient in question," he said. "We only look at the general data. And then we develop different algorithms to mine those data, but not to pinpoint any particular patient."

Ho added that IHD Pay, which has more than 12 million users, doesn't keep the facial biometric data it processes, and encrypts results sent between hospitals and users.

However, it's not clear whether other companies are following such high standards. While data privacy standards and laws exist, enforcement has been lacking, especially in China. Some also argue less stringent regulation may help foster innovation.

Nova Vision's Wang noted it has been difficult for his company to expand overseas due to tighter government regulation on data collection, such as GDPR in Europe.

"There's a struggle," Wang said. "For the AI algorithm to be very efficient and more efficient you need a lot of data. But then, on the other hand, if you want to protect your personal privacy, you do not want to share data, so it's give and take."

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