European firms seek clearer data transfer laws from China


AA European business association emphasizes the necessity for clearer definitions from China concerning crucial terms in its regulations on cross-border data transfer. The European Chamber of Commerce in China has highlighted the necessity for Chinese authorities to offer explicit explanations for both 'important data' and 'personal information' as outlined in their regulations. Additionally, the Chamber has urged swift finalization of proposed relaxations in certain regulatory aspects, initially announced in September. This action aims to prevent European firms from expending significant amounts of money storing non-sensitive data in China and to provide clarity and certainty for businesses operating within these regulatory frameworks.

In recent years, China, the world's second-largest economy, has enforced stricter data regulations following President Xi Jinping's increased emphasis on national security. The lack of clarity in these regulations has raised concerns among foreign firms, who fear potential complications. According to a report by the European Chamber of Commerce in China, the ambiguous nature of laws, guidelines, and measures poses significant challenges for European companies operating within China. The report highlighted that certain requirements, such as "regulatory security assessment thresholds", were deemed inadequate, particularly for larger multinational corporations. Foreign investors in China have become more apprehensive over the past year due to corporate raids, primarily targeting consultancies and due diligence firms.

The findings of the chamber's report align with recent remarks from a European Commission official made in September, expressing European businesses' specific concerns about the lack of clarity in China's data laws. In that same month, China announced its contemplation of exempting data export security assessments for activities like international trade, academic collaborations, cross-border manufacturing, and marketing that don't involve personal information or important data. This move was positively received by foreign business associations and legal practitioners. The chamber noted that the draft release signaled the Chinese government's attentiveness to business concerns and readiness to take corrective actions. Companies eagerly await these positive signals to be translated into practical measures.

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