China is the second largest economy in the world and has already led the world economically. However, this dominance is still largely based on numbers. China combines the title of the world's largest steel maker, a bigger exporter and a bigger auto market, but is it also ""? Not long ago, a Chinese investigation attracted widespread attention. The survey said: China's industrial level is 100 years behind Germany. This is obviously an exaggeration, but it points to the key point that China must improve its own technological capabilities, and the sooner the better.
It is increasingly clear that China's economic transformation will be an extremely painful process. However, if we want to first improve the stagnant or even declining industrial competitiveness in some areas, transformation is an inescapable path. Transformation plays a decisive role in the well-functioning of China's economy and its consumption. Fortunately, the service industry is growing rapidly, but it is not enough to provide a large number of stable and well-paid jobs to promote consumption. Industry remains China's "core strength", as is the case in Germany. Only by maintaining its industrial advantages can China achieve its lofty growth goals in the long run.
China has devoted itself to technological innovation for this purpose. The key word for China is "Made in China 2025". This is the right start, as the world is entering the threshold of the fourth industrial revolution, the digital economy. Whoever does not participate in the new industrial revolution will be left behind. One of the main drivers will be the digitization of industry. Germany thus launched the "Industry 4.0" initiative a few years ago, which is now being vigorously pursued.
Data security and data sovereignty are the decisive factors for the realization of the fourth industrial revolution
Now no one can predict who will come out on top in the "Industry 4.0 era" and take the lead in the increasingly fierce international market competition. German experts agree that in addition to RD funding, two closely related factors will play a decisive role: data security and data sovereignty.
China emphasizes "cyber sovereignty" rather than "digital sovereignty". Under the government's control of cyberspace, the Internet has become completely "transparent", and data security cannot be protected for companies.
However, on the contrary, what the digital economy needs is a protected virtual space, especially for industrial data. For the successful development of Industry 4.0, it is necessary to protect the "sovereignty" of the researchers and engineers of the companies and research institutions that bring about the innovations. They must have "jurisdiction" over the data. IoT and Industry 4.0 are premised on targeted and therefore smarter than today's secure storage (cloud solutions) and a substantial increase in data exchange. These solutions can only reach their full potential if companies in the same and related industries are willing to exchange certain data. To do this they first need to be secured against unauthorized reconnaissance and the theft or misuse of this data. At the same time, it is also necessary to ensure that the "owner" of the data can manage the data effectively and flexibly, that is, to have "data sovereignty". This goes beyond the effective protection of intellectual property, but the latter still constitutes an essential foundation.
In Germany, in order to solve some of the above problems, at the beginning of this year, the Fraunhofer Association and 16 companies discussed how to develop a new "industrial data space", based on practical application cases contributed by participating companies, aiming to provide secure data The supply chain creates a virtual space. The space must be able to store data securely, provide a controlled and restricted data path, and also guarantee data security and data sovereignty. This space should rely on 5G broadband in the future. This highly innovative project may serve as an example.
What challenges will China face?
In order for China to achieve "Industry 4.0", it must meet the following special challenges: China's Internet policy is very different from Germany's. The traces that require control are much heavier. For example, compared with Germany, China only allows anonymous participation in online communication on a very small scale. Additionally, there is a clear trend in China to localize sensitive data through laws. This approach runs counter to Internet thinking, especially the idea of building modern data networks with the goal of supporting the production of products by global companies.
In China's Cybersecurity Law, which has not yet been revised, there is also a provision that requires companies to submit encrypted data decryption paths to the authorities in addition to mandatory data localization obligations. Such regulations have deterred many companies and may become a huge obstacle for Germany to strengthen cooperation with China in the field of "Industry 4.0". We do not see any added value to security policy by restricting encryption of production data, and it may even introduce additional security risks to underdeveloped network infrastructures such as those run by enterprises.
We therefore urge China to revise this provision or severely restrict its implementation. Otherwise, China may miss the opportunity to catch the express train before the Fourth Industrial Revolution officially kicks off. If the world has a large number of small networks that are country-bound and subject to data localization regulations in many cases, it is not in the interests of leading companies like Huawei, Alibaba or Haier, which may seriously hinder their development and innovation potential. .
I hope that these regulations will not become a reality, but even so, it is likely that some important German companies and research institutions will have difficulty handling sensitive technical data through the existing Chinese Internet. Because, first of all, the speed of cross-border data exchange is not fast enough, which is a headache for German companies in China. Second, China does not have a protected cyberspace where companies can safely exchange data. For this reason, China should also consider establishing an "industrial data space".
Germany and China are partners of particular value and complementary potential to each other in the field of industrial digitalization. In order for the all{{0}}round strategic partnership between the two countries to grow into "Partnership 4.0", it is necessary to take the road of innovation. If an operational Cybersecurity Agreement can be signed as soon as possible, as announced by the two countries during Chancellor Merkel's visit to China last October, it will bring new impetus to the further "upgrade" of the partnership between the two countries.
