European firms call for clear definitions in China’s data transfer rules

European businesses seek clarity on China’s rules for transferring data across borders. The European Chamber of Commerce in China stressed the crucial need for clear definitions of terms like ‘important data’ and ‘personal information’ to ensure compliance. At the launch of the report based on a member survey on the impact of China’s data regulation, Stefan Bernhart, a chamber vice president, highlighted that the lack of clear guidelines presents operational hurdles and substantial compliance expenses, especially for multinational corporations.

Recent suggestions imply potential relaxations in regulations, indicating that the Chinese government acknowledges business concerns. However, uncertainties persist, causing unease among foreign investors due to unclear legal standings and corporate raids. If implemented, the proposed exemption from certain data export security assessments could alleviate restrictions for activities that don’t involve sensitive data.

Why does it matter?

European firms mainly transfer the personal information of employees, suppliers, and customers abroad, facing significant costs if they fail security assessments. Despite most data being non-sensitive, compliance issues pose a substantial risk, potentially discouraging smaller companies from investing in China. Businesses eagerly anticipate concrete actions from the Chinese government to translate positive signals into actionable changes, expected by the end of November.