China’s legal efforts to facilitate cross-border data transfers: a comprehensive reality check

Abstract

ABSTRACT In the past, the Chinese government mainly focused on the issue of national security and thus created a security assessment mechanism for cross-border data flows (CBDFs) with broad coverage. It is about time for China to reconsider its data governance regime based on a balanced approach. Various initiatives to facilitate CBDF have thus been started in so-called pilot free trade zones (FTZs) and special administrative regions (SARs). The good practice in FTZs would help formulate nationwide rules. With regard to SARs, once the special CBDF arrangements between the Chinese mainland and Hong Kong and Macao are concluded, the latter ones could become data centre hubs for the Greater Bay Area as a pilot, and potentially for the entire China in the long run. The reform to facilitate CBDF should be carefully implemented in a manner not favouring domestic companies. Otherwise, it would be inconsistent with the non-discriminatory conditions under the RCEP, as the first international agreement of China that contains provisions to explicitly facilitate CBDF for commercial purposes. Moreover, the negotiations on the accession of the CPTPP and the DEPA would incentivize China to accelerate the pace of reform. From an international perspective, actively engaging China in CBDF negotiations at the regional level would contribute to achieve global CBDF standards through, for instance, the e-commerce negotiations at the WTO.