EU Firms Request China to give Clarity on Cross Border Data Laws

A European business lobby group said on Wednesday that European firms "urgently" need China to provide clearer definitions of key terms in its cross-border data transfer rules, and that firms risk wasting millions of euros storing non-sensitive data in China. The European Chamber of Commerce in China urged authorities to "provide precise definitions for both "important data" and "personal information" as outlined in their rules, as well as to finalise a proposed relaxation of certain aspects of regulations announced in September as soon as possible.

The world's second-largest economy has tightened its data laws in recent years in response to President Xi Jinping's increased emphasis on national security, and foreign firms are concerned that the lack of clarity will stymie them.

"Many of the laws, guidelines and measures lack specificity, which poses serious operational and compliance challenges to European companies operating in China," the report read, adding requirements like "regulatory security assessment thresholds" were too low, "especially for larger multinational companies."

Fears among foreign investors in China have increased in the last year as a result of a series of corporate raids, primarily on consultancies and due diligence firms.

The chamber's report echoes recent comments from a European Commission official, who stated in September that European businesses were particularly concerned about China's data laws' lack of clarity.

In the same month, China announced that it was considering waiving data export security assessments for activities such as international trade, academic cooperation, cross-border manufacturing, and marketing that do not contain personal or sensitive data, a move that was applauded by foreign business chambers and lawyers.