A new business reality is looming in China’s technology sector. As the central government builds a data regulation regime that restricts or bars companies from grabbing personal information, the days when a technology start-up – blessed by an innovative business model or a genius algorithm – could quickly build up a business empire are over. Beijing is slowly tightening its hold over Big Tech and imposing its authority over data produced in the country. The recent passing of the Data Security Law and the soon-to-be-approved Personal Information Protection Law show authorities are strengthening their ability to punish misuse of data, and technology companies operating in China need to adjust their practices and rethink business models. China’s Big Tech firms to create user information oversight bodies under upcoming data privacy law Beijing’s decision to limit corporate power in gathering, managing and using data has come with growing recognition that data is a fundamental “production factor” along with land, labour, capital and technology. In other words, for China’s government, data is a strategic resource that cannot be the sole property of the country’s tech capitalists. Take land for example, the market is firmly under the control of the government, which decides on supply, the way of trading and, increasingly, the sale price. China’s data regulation will not be as rigid. But in the future, more strings will be attached for any business entity collecting information from Chinese consumers, which will translate into higher costs. As part of the change, different layers of government are expected to be more aggressive in exerting control over data. Data regulation in Shenzhen , for instance, authorises the municipal government greater power in defining, categorising and regulating user information than in other parts of the country. Infighting among different government agencies over data regulation could arise as bureaucratic institutions jostle to exert authority, putting additional compliance pressure on companies. As Beijing tightens oversight, it also needs to keep a balance. On one hand, it has to limit the power of Big Tech in gathering and using data. But on the other, if it goes too far and keeps user information off limits for businesses, it may hurt one of the most dynamic and competitive economic sectors in the country. What balance the government will ultimately strike is unclear. But for now, authorities are leaning towards regulation, because security is the No 1 focus.