This China Newsletter provides an overview of key developments in the following areas:
1. Compliance
- Four Authorities Launch Pilot Program for ICV Introduction and Road Testing
- Two Departments Revise the Catalog of Technology Prohibited or Restricted from Export by China
2. Data Privacy & Cybersecurity
- China Proposes Easing Stringent Regulation on Data Export, as the Cyberspace Administration of China released the draft regulation on regulating and promoting cross-border data flows.
- China Streamlines Cross-Border Data Transfers between Mainland and Hong Kong by releasing the tailored SCC for Guangdong-Hong Kong-Macau Great Bay Area.
3. Dispute Resolution
- NPC Passes Amendment to the Civil Procedure Law
Compliance
Four Authorities Launch Pilot Program for ICV Introduction and Road Testing
四部门启动智能网联汽车准入和上路通行试点
On Nov. 17, 2023, the Ministry of Industry and Information Technology (MIIT) and three other departments released the Circular on Launching the Pilot Program for the Entry and Road Testing of Intelligent Connected Vehicles (ICVs) (the Circular). Before the Circular, certain cities had already launched regional pilot programs to allow select ICVs to conduct on-road trials within specified areas. The Circular expands the road trials program nationwide.
Under the Circular, automobile manufacturers and users may form a consortium to apply for participation in the pilot program. The four departments then examine the qualifications and conditions of the manufacturers and users and select some ICV models equipped with L3/L4 autonomous driving functions, capable of being mass-produced, to grant market access and test the selected vehicles on designated roads. After obtaining approval to conduct road trials, the participating entities must purchase insurance for the vehicles, apply for vehicle registration, and monitor the operational status of the vehicles in accordance with the Circular.
Two Departments Revise the Catalog of Technology Prohibited or Restricted from Export by China
两部门修订《中国禁止出口限制出口技术目录》
The Ministry of Commerce (MOFCOM) and the Ministry of Science and Technology (MOST) have jointly released the revised Catalog of Technology Prohibited or Restricted from Export by China (the Catalog). The revised Catalog reduces the number of controlled items from 164 to 134, with 34 deleted, 4 added, and 37 modified. Specifically, key revisions include the following:
- Cell cloning and gene editing technology for human use were added to the Catalog;
- Crop hybrid advantage utilization technology, bulk material loading and conveying technology, and lidar system were added to the Catalog;
- Manufacturing technology of green plant growth regulator, meat processing technology, beverage production technology, nonferrous metals metallurgical technology, agricultural machinery manufacturing technology, and China's special species resources technology were removed from the Catalog;
- Twenty-eight restricted technologies, including medical diagnostic devices and equipment manufacturing technology and target feature extraction and identification technology, were removed from the Catalog; and
- The control points and technical parameters of 37 technologies, involving six prohibited technologies, such as Chinese herbal medicine resources and production, and 31 restricted technologies, such as economic crop cultivation and breeding technology and non-ferrous metal metallurgical technology, were adjusted.
Data Privacy & Cybersecurity
China Proposes Easing Stringent Regulation on Data Export
国家网信办就规范和促进数据跨境流动规定征求意见
With the publication of China's Standard Contractual Clause (China SCC) in February 2023 (see Issue No. 56), the final piece of China's data export regulatory framework was completed. Under the current framework, enterprises exporting China-originating data are subject to one of the three following mechanisms depending on the identity of the data exporter and the nature and volume of the data to be exported: (i) mandatory security assessment led by the Cyberspace Administration of China (CAC), (ii) China SCC or (iii) Personal Information Protection Certification (PIP Certification, see Issue No. 55) (collectively referred to as the "data export mechanisms").
However, the ambiguous requirements, low trigger threshold, slow administrative procedures, consequences for non-compliance, and assorted practical challenges encountered by multinational businesses in regulatory practices have created compliance burdens for small and medium-sized enterprises (SMEs), and also discouraged foreign enterprises and investors from conducting business in China.
To address the concerns of the SMEs, foreign investors, and multinational businesses, the CAC published a draft of the Provisions on Regulating and Promoting Cross-border Data Transfer (Draft Provisions) for public consultation Sept. 28, 2023. The Draft Provisions propose a series of measures to ease the stringent regulatory requirements for data export under the current laws and regulations, including to
- Exempt many companies exporting data from China in certain common business scenarios from otherwise obligatory data export requirements;
- Increase the threshold for triggering the mandatory CAC security assessment;
- Narrow the scope of important data to only include that which is explicitly designated by the authorities; and
- Empower free trade zones (FTZs) to determine the categories of data subject to the mandatory data export procedures.
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