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Cybersecurity
TechPolicy

Explainer | What China’s new data laws are and their impact on Big Tech

  • The Data Security Law and Personal Information Protection Law passed this year will make it even more costly for companies to store Chinese user data overseas
  • The new rules come into effect amid a broad cybersecurity crackdown that started with Didi Chuxing but is now affecting the entire online platform economy

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A man looking at a phone is seen through a digitally decorated glass during the World Internet Conference in Wuzhen, Zhejiang province, in November 2020. Photo: Reuters
Matt Haldane
When Chinese authorities initiated a cybersecurity review of ride-hailing giant Didi Chuxing, it marked another move in a widening crackdown on the country’s technology industry.
But it was also a unique case: Didi was the first company to be subjected to such a review in China, signalling that authorities are getting serious about how companies collect, store and use data.

China has long sought to shield its domestic internet from outside influences with a policy it calls “cyber sovereignty”, but a slate of new laws and regulations are forcing companies – both foreign and domestic – to keep data related to local customers and operations inside the country.

In addition to various laws governing data localisation, the new Data Security Law, in effect as of Wednesday, is the country’s first law designed to limit the methods of processing and using data. This will have wide-ranging implications for how tech companies operate in China.
Didi Chuxing was hit with a cybersecurity review days after going public in New York, sending its shares plummeting. The firm’s possession of sensitive data such as maps and users’ locations was said to be of particular concern to regulators. Photo: Reuters
Didi Chuxing was hit with a cybersecurity review days after going public in New York, sending its shares plummeting. The firm’s possession of sensitive data such as maps and users’ locations was said to be of particular concern to regulators. Photo: Reuters

Here is a look at China’s cross-border data rules, why they are being enforced now, and what they mean for tech giants and their users.

What are China’s cross-border data rules?

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