China considers easing data transfer rules to support foreign businesses and economic growth

China is contemplating the relaxation of its strict regulations concerning the transfer of data, with the goal of alleviating concerns voiced by foreign enterprises and stimulating its economic growth. The Cyberspace Administration of China has put forth proposals for exceptions to the prerequisites for authorizing the export of personal data, particularly offering advantages to firms that handle data for fewer than one million users.

While companies collecting data from more than one million individuals and transmitting it overseas will still need to undergo a security assessment, there will be simplifications in the requirements for other types of submissions. These modifications are intended to lighten the load on multinational corporations that are active in China and have been apprehensive about the stringent data regulations.

Why does this matter?

This adjustment arrives in anticipation of a November deadline for obtaining approvals for international data transfers, impacting various data streams ranging from customer details to HR systems. China acknowledges the necessity of striking a balance between data security and nurturing international business relationships, particularly in light of the fact that the previous regulations were perceived as more demanding than the European Union’s data protection standards. Experts believe these alterations reflect a more pragmatic approach to data security compliance on the part of Chinese regulators. This move not only improves the business climate but also highlights China’s willingness to strike a balance between data security and international business relationships, which can have broader implications for global data governance standards.