Public data authorized operation and the rise of data finance in China: origins, risks, and prospects

This article explores the introduction of public data authorized operation (PDAO) in China and its role in the emergence of data finance, a new revenue model for local governments facing fiscal pressure due to declining land finance. It argues that the shift toward data finance is driven by the local government’s need for alternative fiscal resources, enabled by policies promoting the conditional and paid use of public data. The article examines the risks associated with the revenue-oriented approach to PDAO, such as the erosion of free public data openness, the formation of administrative monopolies, increased costs for data utilization, and the fragmentation of data regulations across regions. The article offers insights into the future of data finance and PDAO in China. It suggests that data finance should not be driven solely by short-term revenue goals but rather should be considered a strategic tool aimed at enhancing the country’s digital infrastructure and fostering long-term innovation. A comprehensive fiscal framework—including clear pricing standards, balanced revenue allocation mechanisms, and robust fiscal oversight—should be established to ensure that funds generated from PDAO are managed legally, transparently, and efficiently.