Officials of the Cyberspace Administration of China have met with executives from a number of international firms to discuss their concerns about the country's new data regime ahead of its final November deadline for implementation and ease their fears about its implementation.
A few unnamed sources familiar with the matter told Bloomberg on the condition of anonymity said the regulators took questions from firm representatives, offered guidance on adherence, and acknowledged the challenges of clinching approvals of overseas transfers of sensitive information. They also discussed creating a fast-approval mechanism for routine transfers, as well as a curated "white-list" for data categories or even specific companies.
China's State Council has earlier pledged to streamline data transfers in a 24-point plan to address long-standing concerns held by foreign companies. Some of the proposed measures included a "green channel" for foreign firms that meet certain requirements, according to a policy document published online.
The Chinese government will also help Beijing, Shanghai, Tianjin, and the Greater Bay Area that includes Hong Kong devise a list of general data that can be freely exported.
Business Anxieties
China's new data laws were intended to exert control over the valuable information powering the economy and future technologies. However, it came under fire for disrupting the free flow of information multinationals needed to operate globally, drive research, and devise long-term strategies.
The Chinese government is also making overtures to foreign and private enterprises which they considered critical in reviving an economy threatened with deflation.
The new data laws sparked widespread anxiety from global firms and triggered drastic changes in some cases, such as Apple having to remove its generative AI services from its Chinese App Store. Law firm Dentons also split off its Chinese operations this month, while Morgan Stanley shifted more than 200 technology developers - about a third of its tech cohort - out of mainland China.
The reason for such drastic measures was that the new rules gave Chinese President Xi Jinping's administration the power to shut down or fine companies for leaking or mishandling sensitive information.
DLA Piper Asian head of data privacy and cybersecurity teams Carolyn Bigg said every company in every industry operating in China has to figure out how to navigate the data laws because the penalties for non-compliance are severe.
"Your systems will be blocked in China or you will not be able to carry on transferring Chinese personal data outside of China if you do not comply," she said. "This is not just compliance for compliance's sake."