Private and public investment for Big Data in China (2/2)

Written by Lijun Zhang, swissnex Shanghai

In the second article of our short series on China, the rapid development of big data industry in an unexpected region of China is described. This article illustrates how the government and the private sector worked together to create a new cluster for cloud computing and big data analyses in the heart of Guizhou province.

Guiyang

Big Data Development in Guizhou, China

Guiyang, the capital of China’s Guizhou Province, is a city where “there is a city among the mountains, and there are mountains in the city. The city is in the forest, and there are forests in the city.” No one could have imagined that such a beautiful city with plateau characteristics could stand at the forefront of the IT trend and become the capital of China’s big data industry.

In February this year, the Ministry of Industry and Information Technology officially listed Guiyang as the nation’s only pilot area for big data industry. Currently, in terms of big data, Guiyang has achieved five “firsts” in China. Guiyang has China’s first strategic big data lab, China’s first public platform for big data block gathering and China’s first big data exchange market. It is also the first Chinese city to develop open government data and the first city in China to have free public WIFI covering the whole city. Big data is getting traction in China and creating a lot of business opportunities for exploring. This time we don’t look at Beijing or Shanghai, these top-tier metropolitans who are active in new emerging tech trend, but at one southwestern region in China which is making efforts to upgrade from a remote province surrounded by mountains to a modern region with more tech element, under the central government support and investment.

Vast opportunities are spotted in southwestern China, led by Chengdu in Sichuan Province, Guizhou in Guiyang Province and Xi’an in Shaanxi Province. Southwestern regions are home to abundant energy (electricity in particular) and water resources, as well as favorable climatic conditions that are essential in building energy-consuming data centers. Cities in southwestern China have long developed arms industry, especially in aeronautical equipment. Such advantages in high-end devices make southwestern China a magnet for IT enterprises. Once high-end devices reach general public, many opportunities will be unleashed for software and Internet companies.

At all Government levels, great interest have been shown in developing Big Data, Cloud Computing and Internet of Things technologies. Premier Li Keqiang restated government’s determination in his Letter of Congratulation on Guiyang International Big Data Expo 2015 & Global Big Data Era Guiyang Summit. Guizhou Provincial Government acted as a precursor in terms of open data, granting access to formerly exclusive information. They have also built platforms for data sharing, and solicited advice on business models. Four large-scale investment improvement activities were held by Guizhou Provincial Government in 2014, and more than 160 agreements were reached, with a total investment that exceeds 170 billion yuan (25 billion CHF). Compared to the end of the year 2013, IT specialized businesses that focus on big data have reached the number of 400, among which 263 companies registered fall into the category of big data and relative industries.

Guizhou in the “Cloud”

Two years ago, China Telecom, China Mobile and China Unicom, the three major telecom operators in China, installed their data centers in Gui’an District of Guizhou, with a total investment of 15 billion yuan (2.2 billion CHF). Internet companies, including Baidu, Alibaba and Tencent have also built up their own data centers in Guizhou by leasing or investing. Other companies, such as HP, Foxconn and Inspur followed by setting up data centers or disaster recovery bases in Guizhou. In the future, a data center cluster with tens of millions of servers will be formed in Guizhou. The goal of Guizhou is to build up a complete big data industrial chain by 2017, creating related industries with a total value of over 300 billion yuan (45 billion CHF), and build itself into China’s leading province for big data resource gathering and model of related application development.

In April 2014, Alibaba and the Guizhou government signed a “framework agreement for strategic cooperation in cloud computing and big data”, announcing the launch of “Cloud Guizhou”, the government data sharing platform. Alibaba intends to develop cloud computing and big data technology in Guizhou and set up smart logistics, backbone networks and Intime Retail O2O Experience Center. If everything goes smoothly, both parties will start operating big data application services before the end of year 2015.

Currently, “Cloud Guizhou” has built up data resources categories in 7 areas including industries, smart transportation, smart tourism services, food safety, environmental protection, Beidou positioning services and e-government. Meanwhile, in order to build up a big-data ecosystem for Guizhou, the Guizhou provincial government, Alibaba, Tsinghua University and other venture partners jointly organized the 2014 “Cloud Guizhou” Big Data Business Model Contest. After more than seven months, the contest received a total of 8,615 projects in research areas such as agriculture, construction, tourism, finance, health and public services. 26 projects advanced to the final round, with the “Oriental clouds” project, a project developed by a local company, winning the biggest prize.

Guiyang Big Data Exchange

On April 14, the country’s first big data exchange, Guiyang Big Data Exchange was formally launched and the first batch of big data transaction was completed. The Exchange, with a registered capital of 50 million, is estimated to create a marketplace for over 1 trillion RMB worth of transactions in the next 3 to 5 years, and achieve a daily trading volume that exceeds 10 billion yuan (1.5 billion CHF).

The main business of the Exchange covers big data asset transactions, the development of big data cleaning and modeling techniques, the design of big-data-related financial leverages, and other businesses approved by regulatory agencies and related departments of big data transactions. The Exchange will provide big data futures, financing and mortgage for data providers, and establish a credit evaluation system so as to accelerate the flow of data transactions and data circulation. The data covers 12 areas including government, medical care, financial services, enterprises, telecommunication, energy, transportation, consumer goods, consumption, education, social activities and the society.

According to an insider, the pricing of big data is determined by the type, the time span, and the depth and integrity of the data, data sample coverage, and the timeliness of the data. Real time price is determined by the sample size and the data index value of a single sample. Then, the transaction system will automatically price the data, which fluctuates in real time. Individuals, enterprises, social institutions and governments are four main sources of data. Enterprises and governments are major clients that supply tangible data, while the latter always have a gigantic database that are exclusive. There are also many forms of data, text, pictures, figures, videos, etc. Due to the forms, sources, accessibility, time, accuracy and other features of data, different data have different value. So, because of the differences in sources, types, and significance of data, their princing is a difficult task. The completion of the first transaction on the first day of the exchange opening marks that China’s first big data exchange officially put into operation. The sellers of the first finished data transaction are Shenzhen Tencent Computer Systems co., LTD., and Guangdong Data Institute, and the buyers are JingDong Cloud Platform and Centrin Data Systems.

Since 2008, Jusfoun Big Data Company boasts a team of nearly 300 specialists of data digging, enterprise monitoring and industry researching. The company aims to become China’s most professional financial data terminal and a comprehensive data solution platform for primary market investment and M & A decision. Its clients include commercial banks, Internet financing companies, P2P businesses and securities firms. According to Mr. Wang Sanshou, Managing Director of Jusfoun, data is automatically priced and continuously transacted in the exchange. The exchange will design an automatic pricing formula, and buyers of data can check the real-time price for each type of data through the trading system. “When the data buyer price is equal to or higher than the listed price of the seller, the exchange will automatically close the deal with the price offered by the buyer being the final price. If a deal cannot be made automatically, the buyer can choose to sell the data to a buyer who offered an acceptable price, with the price offered by the buyer being the final price. Because the buyer does not necessarily need all the data samples, the system can split the data according certain principals, and automatically offer the pricing as well as making the match. Currently, certain limitations have been put on the buyers of data. In 2015, individual purchase of data is not allowed. Also, since the supervisory system is still imperfect, qualification review is a must before a foreign buyer can purchase data.

Then, how to protect personal privacy?

Mr. Wang responded by saying that there is no need to worry about that. What the exchange offers is only a platform for transaction. The data involved in the transaction are all provided by sellers who collected them through various channels themselves. The data transacted does not involve personal privacy information, and will be cleaned. The so-called data desensitization or data cleaning is to eliminate private contents in the data through certain rules so as to protect privacy. All data have to be scrubbed and further analyzed to remove personal references before they become available on the platform. Information such as real customer data will be desensitized beforehand. By applying a non-reversible transformation based on numeric and string desensitization algorithms, data of sensitive nature will be obfuscated and interfered, thus making people unable to retrieve the complete information. After this process, the data become a real data set that can be used safely in development, testing and other non-production environments and out-sourcing environments.

Conclusion

Guiyang area presents many advantages for the development of big data industry, with affluent and cheap electricity infrastructure and power-supply, high altitude with relatively low temperature and the central government endorsement. But outsiders still show some scepticism: China is indeed hungry for talents in the emerging new industries and Guiyang, which is an inland under-developed city, has many difficulties to recuit big data talents. How to transform the region into a talent hotbed is thus a major challenge. By learning from Chengdu IT cluster model, government incentives and private investment may create a new growth spot in southwest china. We’ll keep an eye on the development.

sources (in Chinese): 1, 2 and 3

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s