BEIJING , -- Under proposed rules Friday, companies in China would need to obtain government approval before they can transfer sensitive data overseas. These regulations would tighten Beijing’s control over information and could disrupt international corporate operations.
According to the Cyberspace Administration of China, the measure is necessary to protect the Chinese people and "safeguard national safety."
The government of President Xi Jinping views information on China's 1.4bn people as a security threat in private hands. A flurry rules have been issued to tighten control on how information is collected and used by companies.
Investors have been anxious since the late 2020 crackdown on data security, which saw a drop in market value for e-commerce platforms Alibaba, Tencent, and games operator Tencent, as well as other tech giants, of more than $1.3 trillion.
According to the CAC, companies that wish to transfer sensitive data overseas would need to disclose how much and what kind of information they are transferring and any security measures. The CAC states that regulators would make a decision within one week on whether to accept the report or conduct their own review. This could take up to 60 days.
These rules will apply to any transfers that involve sensitive personal information of more than 10,000 individuals or companies that handle information about more than one million people. They don't give any details about what is important or delicate.
Companies are prohibited from keeping information on Chinese citizens abroad under previous rules.
This led to complaints from global companies that they are not able to combine information from China and other countries. However, Chinese competitors can gather all their data at their headquarters.
Separate legislation, which takes effect Monday, establishes security standards. It prohibits companies to disclose information without customers permission and instructs them how much data they can collect. Contrary to Western data protection laws, Chinese regulations do not limit government access to personal information.
