British Chamber of Commerce warns Chinese data policies could slow innovation


A man looking at a phone is seen through a digitally decorated glass during the World Internet Conference (WIC) in Wuzhen, Zhejiang province, China on November 23, 2020. REUTERS / Aly Song

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SHANGHAI, Nov. 23 (Reuters) – China’s data transfer and localization policy is pushing companies to cancel projects over fears of compliance issues, according to a report by the British Chamber of Commerce in China released Tuesday.

“The uncertainty causes considerable anxiety, as it could create insurmountable obstacles to data from China,” the chamber wrote.

“Some companies are already affected by the slowdown in data flows – one company canceled two-thirds of its planned R&D projects in China, while another was forced to degrade the quality of service it provides to its customers. clients.

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The report describes legal requirements for foreign companies to store data locally in China and to conduct “security reviews” before transferring data overseas as “expensive” and “restrictive,” diverting resources from more productive R&D efforts.

The chamber adds that other parts of the laws remain too vague. Authorities, for example, require companies that transfer “important data” to submit to security reviews, but the definition of important data remains too imprecise, argues the chamber.

Meanwhile, the exact administrative requirements to perform a security assessment have also confused UK businesses.

“These loopholes and ambitious articles in China’s cybersecurity legislation have created significant challenges for UK businesses in their efforts to achieve compliance, hampering their ability to use data to make business decisions globally and locally. “

The chamber recommended that Chinese authorities make efforts to clarify their policies to allow foreign companies in China to share as much data as possible with foreign divisions.

This year, China implemented the Data Security Law and the Personal Information Protection Law, two key provisions dictating how companies should store, protect and share data.

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Reporting by Josh Horwitz; Editing by Sam Holmes

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