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Creepy or convenient? Big data is big business in China

This photo taken on Nov. 23, 2019, shows a monitor exposing traffic violators in Wuxi, in China's Jiangsu province. The screen shows a female motorcyclist who was captured ignoring a traffic light. (Mainichi/Kiyohiro Akama)

WUXI, China (Mainichi) -- In early October, a 22-year-old university student was heading home by taxi after her studies in the city of Wuxi in China's eastern-central Jiangsu province when a monitor image caught her eye. She let out a cry of surprise.

Splashed across a large screen set up along a shopping street was the face of one of her friends. It was partially pixilated, but her friend's name and identification number were visible for all to see. The student quickly took a photo of the image and sent it to her friend, who replied, "That does appear to be me."

Her friend's face had appeared on a so-called "traffic violator exposure screen." Local police installed the screens in three locations across the city in August 2017 after becoming frustrated with residents' bad traffic manners. The system uses cameras set up at intersections that automatically detect pedestrians and cyclists running red lights or committing other traffic violations. The images are matched with local authority databases to identify the individual, and their face appears on the monitor within five minutes. It is said that over 95% of wrongdoers can be identified. Violators are contacted by police and fined.

Images captured on surveillance cameras are seen in a showroom of Hikvision Digital Technology Co. in the city of Hangzhou in China's Zhejiang province. (Mainichi/Kiyohiro Akama)

The cameras are now being installed at major intersections in the city, and the system is also being introduced in Shanghai, Nanjing, Luoyang and other major urban centers. One taxi driver in Wuxi going by the name of Liu commented, "Thanks to the system, people's road manners have gotten better." But the friend of the university student who was publicly shamed on the monitor questioned the setup, saying, "I don't remember ever registering a photo of my face with police. I feel bad for ignoring the lights, but this is creepy."

In China, identification numbers are linked to phone numbers. From these numbers, an abundance of user data, such as that collected through smartphone apps, branches out. In December 2019, the Chinese government ordered stores selling mobile phones to step up their recording of facial data when people sign smartphone contracts -- a sign that authorities are collecting a plethora of personal information and using it strategically.

At the Group of 20 summit in Osaka in June last year, Chinese President Xi Jinping underscored the importance of big data, comparing data in the digital economy to oil. He expressed confidence in his country's superiority in this field, stating that China had become a digital economic powerhouse.

China, which is competing with the United States for high-tech industry hegemony, has invested a huge amount of funds into the research and application of big data as a pillar for the development of emerging industries. Its application of surveillance systems to maintain security can been seen as an example of success in this area. Chinese authorities, which suck up ever increasing volumes of data, and private businesses, which have lent their technical support, now form the front and rear wheels of a unique Chinese system that is powering forward.

This surveillance footage, from a camera operated by Hikvision Digital Technology Co., taken on a dark road at night clearly shows a vehicle's license plate number and other data, in Hangzhou, in China's Zhejiang province. (Mainichi/Kiyohiro Akama)

The traffic surveillance system in Wuxi was installed with the cooperation of Hangzhou Hikvision Digital Technology Co., a company based in the eastern Chinese city of Hangzhou that is known as the world's largest manufacturer of video surveillance equipment. In a recent visit by the Mainichi Shimbun to the company's headquarters, a showroom displayed the latest surveillance technology.

One image showed a very dimly lit street. But the cars passing by a surveillance camera were shown clearly on the monitor, which revealed the license plate number, the make, model and color of the vehicle, as well as a distinct image of the driver. All of this data is recorded and a huge amount of information is amassed each day. If police search for a vehicle's license plate number, images of the route taken by the vehicle are immediately displayed on a screen.

"If we combine their shopping and call records with various surveillance camera images and analyze the data, we can identify, to a certain degree, who has deep connections with the person in question," a company representative said. "There are privacy issues with this, so we haven't put it into practice, but from a technical standpoint, it's quite possible," the representative added with a smile.

On influential technology company in China is Beijing-based Megvii Technology Ltd., which in 2011 made strides with it "Face++" facial recognition system. The company's system is employed by Chinese e-commerce giant Alibaba Group Holding Ltd. and other major firms, with its applications ranging from facial recognition-based electronic payment systems, checking the clientele at unmanned supermarkets, and the latest company ID systems that use facial recognition to automatically open doors. Naturally, Chinese surveillance systems also employ this technology.

Many surveillance cameras used for testing are seen on a pole in front of the headquarters of Hikvision Digital Technology Co. in Hangzhou, in China's Zhejiang province. (Mainichi/Kiyohiro Akama)

The Mainichi Shimbun was permitted to view the latest monitoring systems during its visit. Images of pedestrians captured on cameras on busy streets are analyzed by artificial intelligence systems. These are compared with a database of wanted suspects, and if there is a match, police are immediately notified. Practical application of the system is already advancing. According to the company, it had been used to arrest more than 10,000 people in over 5,000 crimes by September 2018.

Public resistance to third-party access to personal information including facial data is relatively low in China, and authorities' "watchful eye" has become an established part of daily life.

"Many companies in Japan, Europe and North America have tried their hand at facial recognition technology, but our strongest rivals are the same Chinese companies. That's because in this field, the question of how data is accumulated and applied is important," stresses Megvii's vice president Jiang Yan.

According to analysis by British research firm Comparitech Ltd., more than 200 million surveillance cameras are in operation in China, and in 2022, this figure is set to surpass 626 million. The leadership of President Xi is now promoting the establishment of a "digital silk road" centered on countries covered by the Chinese government's Belt and Road Initiative envisaging a modern-day Silk Road economic zone. This encompasses more than 120 countries. In addition to digital transactions, the export of unique Chinese surveillance systems is also progressing, and China's "watchful eye" combining the latest technology with big data is spreading across the world.

A demonstration is seen combining surveillance camera images with facial recognition technology to identify a suspect, at Megvii Technology Ltd. in Beijing. (Mainichi/Kiyohiro Akama)

There has, however, been backlash against China from some quarters. In October last year, the U.S. Department of Commerce imposed sanctions against eight Chinese high-tech firms as well as bodies affiliated with the Chinese government for participating in the detention and abuse of Uyghur people in northwest China's Xinjiang Uygur Autonomous Region. This included Hikvision and Megvii. Because of the companies' major contributions to surveillance technology, the U.S. government apparently considered them a party to the crackdown on the Muslim minority group. Sanctioned companies are effectively forbidden from doing deals with U.S. firms, which can have a major impact on the former's future business development. This significantly constrains their expansion overseas and has placed a large obstacle in the path toward employing China's unique big data systems prior to its expansion into foreign markets.

-- Big data business transforms China's poorest area

While such surveillance systems continue to create repercussions, the buds of new businesses stemming from the use of big data are growing. In China's mountainous Guizhou province, located inland in the country's south, the temperature is low throughout the year. Because of this, it had been difficult to establish industries there, and it was once China's poorest region. The emergence of big data, however, changed that, as companies realized the hard ground and low temperatures made it an ideal location for data centers.

Major Chinese IT and communications companies including the Alibaba Group and Tencent Holdings Ltd. now have a presence in Guizhou province, and overseas firms including Apple Inc. and Microsoft Corp. are also pushing ahead with the construction of data centers there. These developments have been helped along by the Xi government's establishment of the Guian New Area in the province as a base for the big data industry. The country's leaders have strived to attain the dual goal of eradicating poverty and achieving industry growth. The area has now developed into a place for the big names in Chinese high-tech to come together.

Guian New Area, which was established as a base for big data, is seen in China's Guizhou province on May 15, 2019. (Mainichi/Kiyohiro Akama)

In 2015, China's first big data exchange, the Global Big Data Exchange, opened in Guizhou province. Over 4,000 categories of data are traded at the exchange, from manufacturing and retail information to financial and weather data. The exchange has ample support from the government and local authorities, and now close to 10,000 big data-related companies are managed from or have development centers in Guizhou.

One firm launched in 2015 focused on the severe lack of parking in Guizhou province, and collated data on empty parking spaces, which it matched to drivers through a smartphone app it developed. The company's founder Zhang You expressed hope of being able to expand across China. "If you can create a model for success in Guizhou, then it's easier to promote yourself when entering other areas," he said.

Guizhou has started to produce businesses that have gone on to capture large chunks of their markets, such as Manbang Group, a truck-hailing app provider formally known as the Full Truck Alliance Group; and Guiyang Lang Ma Information Technology, which operates the 39.net professional health information portal.

In 2018, the economic growth rate for Guizhou province was 9.1% -- far higher than the overall Chinese rate of 6.6%. For eight years running, it has ranked among the top three provinces for economic growth.

A large monitor shows an app designed to help drivers find empty parking spaces, at the app developer's office in the Guian New Area in China's Guizhou province on May 17, 2019. (Mainichi/Kiyohiro Akama)

At the China International Big Data Industry Expo in May 2019, Chinese President Xi offered a congratulatory message stating that China was placing importance on the development of big data, and that the country would seek a path of development and a driving force for new growth alongside other countries.

Following the success in Guizhou, big data exchanges have cropped up in major cities including Beijing, Shanghai, Shenzhen and Chengdu, broadening the scope of the big data industry.

According to Chinese research firm Askci Corp., the size of the big data-related market in the country, which stood about 300 billion yuan (about 4.7 trillion yen, $43 billion) in 2015, surpassed 800 billion yuan in 2019. In 2020 it is expected to top 1 trillion yuan.

(Japanese original by Kiyohiro Akama, China General Bureau)

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