Introduction
With the rise of data security concerns, China’s Cybersecurity Law and the Personal Information Protection Law (PIPL) impose strict data localization and security requirements on foreign companies. Compliance ensures that data collection, storage, and cross-border transfers meet Chinese regulations, reducing the risk of fines and operational disruptions.
Overview of Data Localization Requirements
- Data Storage: Under the Cybersecurity Law, companies operating critical information infrastructure (CII) must store data within China unless they undergo a government security assessment for cross-border transfer.
- Security Assessments for Data Transfers: Personal data or sensitive data transfers outside of China are subject to security evaluations to ensure protection.
- Personal Data Privacy: The PIPL requires transparency in data collection practices, data minimization, and individual consent for data handling.
Steps for Compliance
- Establish Data Localization Infrastructure: Invest in onshore data storage solutions to comply with data localization mandates. Cloud solutions and local data centers are widely available in China to assist with compliance.
- Obtain Explicit Consent for Data Use: Under the PIPL, ensure that individuals understand how their data is collected and used. Include consent clauses in online forms and apps to secure approval from users.
- Regularly Audit Data Practices: Implement routine audits to evaluate data handling procedures, particularly around data sharing, transfer, and storage.
Conclusion
Data compliance is a core component of operating legally in China. By adopting local data storage solutions and ensuring clear data usage policies, foreign companies can maintain trust and reduce legal risks in the Chinese market.