The digital economy has become an important engine for economic growth especially as the brick-and-mortar economy was severely affected by the Covid-19 pandemic. Official statistics show the digital economy accounts for nearly 40 percent of China’s GDP. While enjoying the benefits of data, problems such as data leakage, excessive collection of personal information and data abuse have become increasingly problematic, denting public trust in digitalization and smart technologies. China’s data legislation has entered a “peak period” in recent years. A legal framework has been built up which also allowed for data collection to be considered production. Sustainable development of the digital economy calls for unified global data governance rules and it is necessary to learn from the multistakeholder model of internet governance to build an international exchange and cooperation mechanism on cross-border data flow.