Geopolitics of data: How India’s digital independence fuels its semiconductor ambitions

The storage and handling of user data across borders by companies, such as U.S. firms storing Chinese user data or Chinese firms storing U.S. user data, is a significant factor in current geopolitical tensions and the push for tech sovereignty.

Countries view user data as a matter of national security. When a U.S. company like Google or Meta stores Chinese citizens' data, China fears potential surveillance or data sharing with U.S. authorities.  Conversely, the U.S. is wary of Chinese companies like TikTok or Huawei collecting American user data, citing risks of data being shared with the Chinese government under China's National Intelligence Law. For example, the U.S. banned TikTok in 2024 unless ByteDance divests, driven by fears of data access by Beijing.

Data is a strategic asset in the U.S.-China tech rivalry. Control over data flows equates to economic and intelligence advantages. China's "Great Firewall" and data localization laws (e.g., Cybersecurity Law of 2016) mandate that foreign companies store Chinese user data within China, often in partnership with local firms, to prevent U.S. access. Similarly, the U.S. restricts Chinese tech firms' operations (e.g., Huawei's 5G ban) to limit China's data reach, escalating tensions.

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