The Cyberspace Administration of China's proposals, which are in the form of a draft, state that no governmental regulations are necessary for data exports if the applicable authorities have not defined them as “important”. The European Union Chamber of Commerce in China commented in a statement to CNBC that this draft regulation alleviates some of the troubles that businesses face when transferring data and protecting personal information. The U.S.-China Business Council's most recent annual survey revealed that the second biggest concern for its members this year was regarding data, personal information and cybersecurity regulations.
China has been signaling a shift from its formerly stringent policies on data collection and export with new laws. Businesses, especially foreign ones, have faced difficulty in upholding the regulations due to lack of clarity on terms like "important data." The Cyberspace Administration of China (CAC) proposed an update on Sept. 28 that no government oversight is necessary for data export unless it is identified as "important." This suggestion is open for public comment until Oct. 15.
The European Union Chamber of Commerce in China stated to CNBC that the Chinese Government's introduction of the draft signals a positive response to businesses' complaints and that it is open to taking action to resolve them. Furthermore, the draft regulation looks to ease the burden of cross-border data transfer and personal information protection by providing a list of exemptions plus details concerning what qualifies as 'important data' for verification purposes.
The EU Chamber and other business organizations have requested that the Chinese government make the operating conditions more favorable. The cybersecurity regulator's draft regulations also state that data generated through international trade, academic cooperation, production, and marketing could be sent abroad without restrictions, as long as it does not contain personal information or "important data." Reva Goujon, the director of the China Corporate Advisory at Rhodium Group, stated in an email Friday that this is a minor but essential action showing that Beijing intends to honor its promise of promoting cross-border data exchanges to better the investment environment. Goujon also said that Beijing is becoming aware that upholding its notion of data sovereignty could have economic effects that might harm the sunrise industries that Beijing is expecting to stimulate growth. She said that international organizations in these data-dependent fields cannot predict whether their operations could be hindered over the regulations of the CAC.
Since April, there has been a slowdown in China's recovery from Covid-19. This was accompanied by news of certain raids of foreign consultancies in response to the implementation of the new anti-espionage law, exacerbating the apprehensions of multinationals. According to Goujon of Rhodium Group, Beijing took this as an opportunity to introduce measures following those of the European Union, while the US was lagging behind in terms of data security regulations (including state oversight of data transfers and data localization demands). The State Council later revealed a 24-point blueprint for the support of foreign business operations in the country, involving a decrease of random inspections directed at firms with low credit risk and the introduction of ‘green channels’ allowing some foreign businesses to access data more easily. However, during Teneo's visit to China, foreign company sources weren't overly excited with the plan, noting that its policies were mostly ill-defined or already existing, but acknowledged that some of its features could be beneficial. Additionally, the plan noted the intent to make clear the definition of ‘produced in China’ so that foreign-made products can be eligible. While U.S. Commerce Secretary Gina Raimondo's visit to China in August saw her suggest that a number of the 24 points could be taken up to demonstrate action, the U.S.-China Business Council's yearly survey highlighted the second-most pressing challenge was data, privacy, and cyber security rules, while the most commonly identified one was international and domestic politics.China is facing a golden week — but the expected spending surge comes with risks
It's Golden Week in China, bringing welcoming news for travelers to three hot destinations. But, this cutthroat competition isn't slowing due to the potential risks for EV companies — all while Artificial Intelligence applications gear up to push it forward for monetization. Read more on the situation from CNBC Pro..
The start of China's 'Golden Week' is upon us and three popular destinations for spending abound. Even though the country's competition has diminished due to the economic slowdown, EV firms are still battling to take the top spot. Moreover, China's artificial intelligence (AI) applications are gaining momentum and offer lucrative opportunities for monetization. Consequently, those who invest in the sector could experience 95% potential upside.
Due to the holiday in China, the council could not be reached for comment. In a PIIE blog post Tuesday, Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, and Samm Sacks, a senior fellow at Yale Law School Paul Tsai China Center and New America, said that while the proposed data rules reduce regulatory risk, they do not eliminate it since the definition of "important data" is still undefined and is subject to Beijing's discretion. They added that the leadership's commitment to a more 'transparent and predictable' approach to technology regulation in the wake of the tech crackdown, along with the new regulations following the State Council's 24 measures unveiled in August, which explicitly call for free data flows, could lead to other concrete actions to improve the business environment. This follows an easing in recent months on other regulation, such as Baidu and other Chinese companies launching generative AI chatbots to the public after Beijing's "interim regulation" for the management of such services took effect on Aug. 15.
The AI regulations revised recently stated that companies working on technology would be exempt from the regulations so long as the product is not yet available to the general public. This is more lenient than the draft that was released in April, which indicated the regulations would apply during the developmental phase. Additionally, the recent version of the regulations did not require a universal license; it only recommended licensing if required by law. Baidu's CEO, Robin Li, expressed his view that the new regulations promote innovation rather than regulation.
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