Why China Doesn't Care About Privacy
For a few days last week, China appeared to have its own, slow-motion Wikileaks. Via Twitter, someone using the handle @shenfenzheng leaked personal information -- such as home addresses and ID numbers -- of some of China's most powerful commercial and government figures, including Alibaba's Jack Ma, Wanda Group's Wang Jianlin and Tencent's Pony Ma.
It was an audacious stunt, but the leaker was clear that it had a higher purpose: "I hope this encourages the nation's scrutiny, and shows how worthless individual data is in China," he (or she) wrote before the account was suspended. There's good reason to be concerned: China is the world's largest market for online and phone scams, many of which take advantage of the country's lax laws and protections for personal information.
Yet despite these and other recent scandals, online privacy remains a low priority in China, for internet users and companies alike. And this scandal -- like much bigger data breaches that preceded it -- is unlikely to scare very many people into greater vigilance.
When it comes to privacy, China's internet users are global outliers. In 2013, only 50 percent of them believed they had to be cautious when sharing personal information online, compared with 83 percent of those in the U.S. Yet Chinese internet users contend with many -- if not more -- of the online threats that plague web users worldwide, and they often seem all too willing to trade private data for access to services and sites that offer little protection for it.
So what accounts for the discrepancy?
The very concept of privacy, especially as it's understood in the West, didn't really arrive in China until the 20th century. And even then, tight living quarters, multi-generational homes and, above all, the prerogatives of autocratic governments -- which esteemed collective rights over personal ones -- meant that privacy was a luxury very few Chinese enjoyed.
China's great migration online didn't change this situation much. When anonymous critics of the government emerged on the web, the authorities attempted to get the country's hundreds of millions of internet users to reveal their real names when registering for online accounts. That effort hasn't entirely succeeded, but it has offered an important reminder that there's no presumption of privacy in Communist China. The government, in theory, knows all.
China's tech giants also show little interest in privacy. Terms of service at Alibaba and Tencent (owner of WeChat) give the companies carte blanche to use customer data pretty much as they please. So far, the Twitter scandal isn't spurring a movement to change those policies.
But as e-commerce and online finance expand in China, an indifferent attitude toward privacy will become more of a liability. After all, e-commerce isn't just about exchanging money; it's also about exchanging the personal information associated with that money. China's internet users may not hold privacy as dear as their American counterparts, but when it comes to the sanctity of one's checking account, the world is generally flat. If Alibaba and Tencent can't guarantee that your bank account is safe, then you're probably not going to link it to their services.
China's government, constrained by its desire to know as much as possible about its citizens, has nonetheless taken some important steps recently, such as adopting a data privacy law and putting tougher cybersecurity measures in place. But enforcement remains sketchy, and consumers have few ways to complain or obtain compensation if their data is misused.
That leaves e-commerce companies to fill the gap. They could certainly improve their privacy standards, especially by restricting how they share personal user data and by adopting more secure communication protocols (such as HTTPS). But far more important would be an effort to educate their users about the dangers of identity theft, and about what companies can -- and cannot -- do to protect them. That kind of information, which Americans and Europeans often take for granted, is rare in China. Making it less so would improve e-commerce measurably, while helping ensure that the titans of the Chinese internet never again find their home addresses posted to Twitter.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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