Dive Brief:
- A proposed Chinese law would strictly police data transmitted outside of the country if authorities deem the information a threat to national security, according to reports from International Business Times and Reuters. The proposed law would impact economic, technological and scientific data.
- The Cyberspace Administration of China would look at both the security measures and potential threats to national security for businesses transferring more than 1,000 gigabytes of data or transferring data sets impacting more than 500,000 users, Reuters reports.
- Intended to help ensure personal cybersecurity, companies would be required to receive user consent before transferring data overseas.
Dive Insight:
The proposed legislation is an extension of a November law, which requires companies to store business info and data on Chinese citizens locally. To transfer the data abroad, organizations must first receive permission and companies suspected of misconduct are required to give full data access to government investigators.
But foreign tech companies have pushed back on the legislation, which is set to go into effect in June. Tech companies say the law, in effect, requires them to turn over intellectual property and create back doors in products.
The proposed measure is even more restricttive, potentially hampering organizations from transferring data abroad. Through the lens of security concerns, Chinese authorities could stop the free flow of data outside the country, potentially impacting how companies do business in China. Similar to the November law, the proposed legislation could put a damper on organizations conducting business with China.
The Chinese market holds a lot of promise for expansion for tech companies — Gartner values the Chinese IT market at $340 billion. And with organizations in the country making strides in advanced computing, restricting the outbound flow of data and scientific research could negatively impact tech industry innovation as a whole.
