The object detection and tracking technology developed by SenseTime is displayed on a screen at the Artificial Intelligence Exhibition & Conference in Tokyo, Japan, on Wednesday, April 4, 2018. Bloomberg | Getty Images

If China doesn't step up its efforts on issues such as data privacy and intellectual property protection, the country could lose out on a 37 trillion yuan ($5.5 trillion) growth opportunity in the decade ahead, according to new analysis. Based on research from economics consulting firm AlphaBeta, the report published Thursday by the nonprofit Hinrich Foundation found that China's 2017 flows of digital data contributed 3.2 trillion yuan of value to the domestic economy, and 1.6 trillion overseas. By 2030, the analysts expect growth in such digital trade, especially in the consumer and retail business, to contribute 37 trillion yuan to China's economy. That would be about one-fifth of Beijing's projected gross domestic product, the report noted. "That estimate relies on free cross-border data flows for those opportunities," Konstantin Matthies, engagement manager at AlphaBeta, told CNBC on Thursday. "If you put in place things that will impede that, that number is going to shrink."

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The report laid out "priorities for action" for China, such as adopting the Asia-Pacific Economic Cooperation (APEC) Privacy Framework and guidelines for protecting personal information as put out by the International Organization for Standardization (ISO). Other changes which could help China realize its growth potential from digital trade include clearer definitions of what content is illegal, and balanced rules protecting intellectual property rights, the report said. It noted that restricting access to some online material can raise costs, or make business impossible, for some Chinese digital companies. China is infamous for an internet firewall that blocks domestic access to websites Beijing considers a threat to its control, such as The New York Times, Facebook, Twitter and YouTube. Google search is also unusable. Chinese internet censors also scour social media to delete content deemed sensitive. The blocks can lower business productivity, and create an atmosphere of fear for businesses that worry they could be shut down overnight. On intellectual property protection, foreign businesses say Beijing has made some progress, especially with new laws such as the recently announced foreign investment law. But questions remain about enforcement. The report's suggestions are rather general, Zhou Nianli, professor at The University of International Business and Economics' WTO research institute, said Thursday. Zhou was speaking at media event in Beijing hosted by the think tank Center for China and Globalization, which provided CNBC with a Mandarin-language transcript.