Independent Research · Global Dialogue · Public Policy

The Spectrum of Digital Sovereignty: Rule Competition and Room for Coordination in Cross-Border Data Governance

Publication date:2026-09-08Report number:WCI-P-2026-011Author / research team:Editorial Office, The World and China Institute

Cross-border data governance is shifting from “efficiency first” to “security and development together”, with states issuing divergent rules in the name of digital sovereignty. This note sets out four dimensions of rule competition and discusses the practical limits of coordination.

Research note: framing the question

Cross-border data flows were once driven mainly by commercial efficiency. In recent years security considerations, industrial policy and geopolitical competition have intertwined, making “digital sovereignty” a shared rhetoric of legislation in many countries. Beneath the rhetoric lie highly divergent institutional choices: data localisation, outbound transfer assessment, extraterritorial application and mutual recognition arrangements coexist, and the cost of fragmented rules is passed on to multinational firms and smaller economies.

Four dimensions of rule competition

  • Value ordering: whether privacy protection, security review or industrial development comes first — legislation gives different answers.
  • Regulatory radius: which entities and which data types outbound rules cover, and how extraterritorial effect is defined.
  • Regulatory mechanism: administrative licensing versus ongoing supervision, which directly shapes compliance costs.
  • International mutual recognition: whether unilateral rules can be connected through adequacy decisions, multilateral frameworks or standards recognition.

The practical limits of coordination

In theory many coordination paths exist, from multilateral agreements to bilateral trusted data flow arrangements and convergence of technical standards. The practical constraints are equally clear: trust deficits, security concerns and industrial competition make comprehensive coordination unlikely in the short term. A more feasible middle route is “tiering by issue”: retain necessary restrictions in highly sensitive domains while promoting low-friction flows first in non-sensitive areas such as research and public health.

Further research

This note is part of the technology policy research line. Next we will compare data legislation in major economies article by article, produce a rule comparison table and keep it updated as an open resource.

Sources and version: this institutional research note draws on public laws, regulations and literature; cited rules follow the texts published by legislatures. Version v1.0 (2026-09).