Press Release: Amidst Growing Legal Uncertainty, German Chamber of Commerce Calls for Clarity on Upcoming Cybersecurity Legislation

2017年05月31日 AHK China - News-Hauptkategorie, Press Release

China’s new Cybersecurity Law, which is set to go into effect on June 1st, 2017, is one of the most impactful pieces of privacy and cybersecurity legislation. It is likely to put stringent new requirements on technology companies and other businesses reliant on information technology as well as data storage and transfer operating in the country.

“Given the loosely defined concepts and terms used in the law, the German Chamber of Commerce in China is deeply concerned about the possibly broad application of this law and the potentially far-reaching financial and operational consequences for companies doing business in China.” said Simone Pohl, Executive Director, German Chamber of Commerce in China | Shanghai.

As the voice of German business in China, representing more than 2500 companies across all industries, the German Chamber of Commerce in China remains committed as ever to complying to the rules and regulations set out by the People’s Republic of China and is looking back on more than 20 years of successful promotion of Sino-German business relations.  As a membership organization committed to promoting bilateral business expansion, the latest draft of the Cybersecurity Law has raised concerns regarding the implementation of the rules set out in the law.

After carefully reviewing the language of the current law and some of the implementing rules that have been released for comment or are already in place, the Chamber appreciates the effort to step up the fight against cyber-crime and breaches of data privacy by setting basic rules for all operators. At the same time, the new rules impose broad data residency requirements, restrictions on cross-border data flows, restrictions on purchasing IT products, especially encryption products, and external assessment procedures that are untenable for German companies with global operations and will make our members’ systems and data less secure. This impression is further supported by the findings in our own recent flash survey on legal certainty conducted in March this year:  Three quarters of respondents found legal certainty has not improved over the last three years in China. Across all industries, 29% found that legal certainty in China has decreased over the past 3 years and for nearly half of respondents, the complexity, density and number of regulations have had a negative effect on their business.

In light of these findings, we recommend to

1.   release practicable English-language implementation measures on time, enabling businesses to adapt to the new requirements and fully comply without creating unnecessary organizational or financial burdens.

2.   avoid issuing or modify regulations that potentially discriminate foreign IT providers and effectively curtail access to global data hubs, as well as compromise efforts to protect data in line with international best practice, including the use of proprietary encryption products.

3.   clearly identify a government agency that will be able to devote resources to responding to business inquiries regarding the new law and to offer implementation support where needed.

We acknowledge the ongoing efforts of the Chinese government to address certain concerns of the foreign business community. While we understand and support their commitment to emphasize data protection and counteract cybercrime, we are looking forward to entering into dialogue with the Chinese authorities about our concerns over the cost prohibitive effects of the new regulatory system and the worrisome burden placed upon our member companies’ daily business operations it entails. The German Chamber of Commerce in China looks forward to support China’s reform efforts but remains committed to ensuring that regulations do not unnecessarily hinder business operations or undermine the overall attractiveness of the Chinese market.

Subscribe to our Newsletter

Get regularly informed about news in Greater China

AHK Newsletter & Magazines