China relaxes cross-border data rules after concern from foreign businesses

Ahead of a a high-profile business forum in Beijing which Apple CEO Tim Cook is attending, China has relaxed rules governing cross-border data flows, addressing a key concern of foreign businesses that had complained previous regulations were disrupting their operations.

Tom Hancock for Bloomberg News:
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Data collected in international trade, cross-border travel, manufacturing, academic research, and marketing that don’t contain either personal information or “important” information will be exempt from security evaluations when transfered out of the country, China’s top internet regulator said in a statement Friday.

While authorities have yet to detail what constitutes “important” data, the rules feature a number of carve-outs, and go far to alleviate the burden on smaller-sized companies in particular, analysts said. Larger firms will benefit from exemptions for personal data collected for human resources purposes or classified as “non-sensitive,” under rules effective immediately, the Cyberspace Administration of China said.

The relaxation comes as China tries to reverse a decline in foreign investment. The statement was released on the eve of a high-profile business forum in Beijing, where attendance is expected by chief executives from foreign corporations including Apple Inc., Pfizer Inc. and FedEx Corp.

Beijing’s rules on data transfers, introduced in 2021, were widely seen to be more onerous than even the European Union’s strict data protection regime. International firms, from hoteliers to banks, were faced with slow approvals to transmit data beyond China’s mainland. Companies worried that mundane transfers, such as providing overseas headquarters with updates on new hires, could fall afoul of Beijing’s rules.

Foreign business lobby groups have been urging Beijing to relax the rules, and EU and Chinese leaders discussed them at a summit in December.

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MacDailyNews Take: Even more onerous than the EU? No wonder China relaxed their regs.
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