China has eased rules on cross-border data flows. The exemptions address one of the big concerns of foreign businesses in China as Beijing struggles to revive its economy a year after it abandoned its pandemic restrictions. Under the new rules, which came into effect on March 22, businesses do not have to submit information related to cross-border shopping, shipping, payments or visa processing to official security checks. This also applies to data involved in opening bank accounts, booking flights and hotels, and testing services. In addition, reviews will not be needed for personal employee information sent overseas as part of collective contracts or labor rules. But data will still have to go through a security assessment if it relates to critical information infrastructure, or if in one year the transfers amount to the non-sensitive personal information of more than a million people, or involve the “sensitive information” of more than 10,000 people.
The Cyberspace Administration of China said cross-border data flows were the foundation for global exchanges and the sharing of capital, information, technology, talent, goods and other resources. “In order to promote the lawful, orderly, and free flow of data, and unleash the value of data elements, we should expand high-level opening-up to the outside world, and optimize and adjust the data export system,” the Administration said. “Regulations concerning security assessments for data export, standard contracts for personal information export, and certification for personal information protection will be stipulated. Adjustments have been made to optimize the system for outbound data.”
China proposed tough data security requirements in 2021 under its Security Assessment Measures on Cross-border Transfers of Data. The measures came into effect the following year and ordered mandatory government reviews for most business data transfers. The rules prompted widespread concern among foreign businesses about the cost and nature of compliance. Draft exemptions, Regulations on Promoting and Regulating Cross-Border Data Flows, were proposed last year before being announced on March 22. The relaxed data rules come as Beijing is in an all-out effort to revive foreign direct investment and boost its economy following a year of sluggish post-pandemic recovery, the South China Morning Post reports.
