Brussels (The Brussels Morning Newspaper) – European Union and China launch cross-border data flow communication mechanism.
What Is the New EU-China Cross-Border Data Flow Mechanism?
The EU and China established the first discussions under the new Cross-Border Data Flow Communication Mechanism. The mechanism is a deliverable of the political deal reached in 2023 between Vice-President Jourová and Vice-Premier Zhang Guoqing at the EU-China High-Level Digital Dialogue, as well as at the EU-China High-Level Economic and Trade Dialogue between Executive Vice-President Dombrovskis and Vice-Premier He Lifeng.
How Will the EU-China Agreement Affect Non-Personal Data Transfers?
It seeks to find ways to facilitate cross-border transfers of non-personal data for European businesses, as well as their submission with Chinese data laws. This issue was also presented by President von der Leyen and President of the European Council, Charles Michel, in their December 2023 summit with China’s President, Xi Jinping, followed by an interaction with China’s Premier, Li Qiang, in the context of the last EU-China Summit.
At the inaugural formal session of the new Mechanism – the first partnership structure of its kind between the two sides – the EU voiced its objective of addressing concrete concerns presented by EU businesses in China concerning cross-border flows of non-personal data.
Why Are Cross-Border Data Flows Vital for EU-China Trade?
Data flows are important to trade. A significant part of the EU-China foreign direct investment stock relies on companies’ ability to manage their data across borders. This is especially relevant for sectors such as finance and insurance, pharma, automotive and information and communication technology (ICT). Cross-border data flows are essential for research & development exercises, and essential for business to thrive.
What Challenges Do European Businesses Face in China Regarding Data Exports?
In recent years, European businesses in China have met increasing uncertainty and problems in exporting data from China. They have been specifically worried about the systematic application of security clearances to exports of all ‘important data’, following the 2022 adoption of the law on Standards for Data Export Security Assessment. This problem has been further exacerbated by indecision as to what constitutes ‘important data’ as the idea has so far been only vaguely defined and involved in a far-reaching manner. Cross-border data transfer conditions are also a major contributing factor to the declining trust of European investors in China.
