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China plans to ease one of the biggest hurdles for foreign business


Pictured here is an exhibition on big data for transportation in Chongqing on Oct. 21, 2020.

China News Service | China News Service | Getty Images

BEIJING — Chinese authorities are signaling a softer stance on once-stringent data rules, among recent moves to ease regulation for business, especially foreign ones.

Over the last few years, China has tightened control of data collection and export with new laws. But foreign businesses have found it difficult to comply — if not operate — due to vague wording on terms such as “important data.”

Now, in a proposed update, the Cyberspace Administration of China (CAC) has said no government oversight is needed for data exports if regulators haven’t stipulated that it qualifies as “important.”

That’s according to draft rules released late Sept. 28, a day before the country went on an eight-day holiday. The public comment period closes Oct. 15.

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“The release of the draft is seen as a signal from the Chinese Government that it is listening to businesses’ concerns and is ready to take steps to address them, which is a positive,” the European Union Chamber of Commerce in China said in a statement to CNBC.

“The draft regulation relieves companies of some of the difficulties with cross-border data transfer and personal information protection partly by specifying a list of exemptions to relevant obligations and partly by providing more clarity on how data handlers can verify what is qualified by authorities as ‘important data,'” the EU Chamber said.

This is a small but important step for Beijing to show it’s walking the walk when the State Council earlier pledged to facilitate cross-border data flows…

The EU Chamber and other business organizations have lobbied the Chinese government for better operating conditions.

The cybersecurity regulator’s draft rules also said data generated during international trade, academic cooperation, manufacturing and marketing can be sent overseas without government oversight — as long as they don’t include personal information or “important data.”

“This is a small but important step for Beijing to show it’s walking the walk when the State Council earlier pledged to facilitate cross-border data flows to improve the investment climate,” Reva Goujon, director, China Corporate Advisory at Rhodium Group, said in an email Friday.

The proposed changes reflect how “Beijing is realizing that there are steep economic costs attached to its data sovereignty ideals,” Goujon said.

“Multinational corporations, particularly in data-intensive sunrise industries which Beijing is counting on to fuel new growth, cannot operate in extreme ambiguity over what will be considered ‘important data’ today versus tomorrow and whether their operations will seize up over a political whim by CAC regulators.” 

More regulatory clarity for business?

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China plans to ease one of the biggest hurdles for foreign business

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