Data as an Asset: Should America Follow China’s Lead?

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is a distinguished visiting fellow at the Hoover Institution and vice-chair of the US-China Economic and Security Review Commission. The views shared are his own.

Last week, a survey from the television ratings provider Nielsen arrived at my house with $2 tucked inside — payment for five minutes of answering questions about my viewing habits. It’s a perfect snapshot of how the US values data: pocket change for personal information, a transaction so trivial it belongs in a junk drawer.

Beijing sees it differently. In 2024, China became the first country to allow enterprises to classify data as intangible assets on their balance sheets. Beijing had already declared data a “factor of production” alongside land, labour, capital and technology. The National Data Administration now oversees dozens of data exchanges. China Unicom, one of the world’s largest mobile operators, reported Rmb204mn ($29mn) in assets in its first filing under the new rules.

The motivation isn’t purely philosophical. Local government financing vehicles — the off-balance-sheet entities Chinese municipalities use to fund infrastructure — are drowning in debt. Some use data as collateral for fresh loans. The US-China Economic and Security Review Commission flagged this in its 2024 report, noting that the actual market value of these data assets remains “difficult to determine”. It’s creative accounting in service of a debt crisis. But it’s also a strategic declaration: data is an asset, and Beijing intends to treat it like one.

America knows data has value. We just refuse to say so. Consider what happens when companies fail. When Toysmart went bankrupt in 2000, the Federal Trade Commission intervened to stop customer data from being sold to the highest bidder. RadioShack’s 2015 bankruptcy sparked a legal dispute over its 117mn customer records. Courts understand what accounting standards won’t admit: customer data is often the most valuable thing a failed company owns.

The data broker industry generates over $200bn annually buying and selling information that appears nowhere on corporate balance sheets. Every American has a shadow profile worth hundreds of dollars to advertisers, insurers and political campaigns. This information shapes credit decisions, insurance premiums and internet ads. It has enormous economic value. But under generally accepted accounting principles, it might as well not exist.

This matters beyond accounting arcana because we’re entering an era where data isn’t just valuable — it’s the essential feedstock for AI. Shouldn’t we be able to measure it?

The government dimension makes this even more urgent. Federal agencies sit on extraordinary data holdings: agricultural yields, geological surveys, anonymised health research. A valuation framework could actually strengthen privacy by forcing explicit accounting for data’s worth and clearer protocols for its protection. Right now, federal data policy is a patchwork of inconsistent practices precisely because we have no systematic way to understand what we’re protecting or why.

Assets that aren’t valued aren’t protected. The Office of Personnel Management breach in 2015 compromised the security clearance of 21.5mn Americans. We’ve solved harder problems before: governments have auctioned the electromagnetic spectrum for decades — rights to invisible frequencies that drive billions in economic value — because we decided it mattered enough to measure.

None of this requires adopting China’s approach wholesale. Beijing’s data exchanges serve state priorities. American capital markets demand more rigour. But the fact that China is experimenting while America refuses to engage with the question at all reveals something about strategic intent versus strategic indifference.

The Financial Accounting Standards Board should initiate a project to develop data asset recognition standards. The Securities and Exchange Commission should study disclosure requirements for material data holdings. Congress should mandate that federal agencies assess the value of their data assets. State and local governments should do the same.

Nielsen sent me $2 because my viewing habits have value to someone. Multiply that by every American, every transaction, every click and search query, and you begin to glimpse the scale of what we’re refusing to measure. China has declared this resource a factor of production and built institutions to manage it. America is hoping no one notices the gap between economic reality and accounting treatment.

Data belongs on the balance sheet. The only question is whether we’ll figure that out before or after it’s too late to matter.