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China loosens cross-border data rules on biz pressure

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China relaxed rules governing cross-border data flows, addressing a key concern of foreign businesses that had complained previous regulations were disrupting their operations. Data collected in international trade, cross-border travel, manufacturing, academic research, and marketing that don’t contain either personal information or “important” information will be exempt from security evaluations when transferred out of the country, China’s top internet regulator said on Friday.
While authorities have yet to detail what constitutes “important” data, the rules feature a number of carve-outs, and go far to alleviate the burden on smaller-sized companies in particular, analysts said. Larger firms will benefit from exemptions for personal data collected for human resources purposes or classified as “non-sensitive,” under rules effective immediately, the Cyberspace Administration of China said.
The relaxation comes as China tries to reverse a decline in foreign investment. The statement was released on the eve of a high-profile business forum in Beijing, where attendance is expected by chief executives from foreign corporations including Apple, Pfizer and FedEx Corp. “This is the govt’s response to foreign companies’ complaints,” said Tom Nunlist, an analyst at consultancy Trivium.
The new rules were largely in line with a draft released last year, which stated that what counts as “important” data must be specified by regulators and can otherwise be treated as non important. In theory, that will reduce uncertainty about what kinds of data can be transferred freely.
While most regulatory burdens on small and medium-sized firms will be removed, large multinationals in finance, pharmaceuticals and automobile manufacturing could still face difficulties with data transfers, according to Nunlist. Sensitive data includes information which, if leaked, can be used to identify a specific person or endanger their safety, the internet regulator said.

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