China Data Flows and Power in the Era of Chinese Big Tech

Voss, W. Gregory,Pernot-Leplay, Emmanuel | January 1, 2024

Personal data have great economic interest today and their possession and control are the object of geopolitics, leading to their regulation by means that vary dependent on the strategic objectives of the jurisdiction considered. This study fills a gap in the literature in this area by analyzing holistically the regulation of personal data flows both into and from China, the world’s second largest economy. In doing so, it focuses on laws and regulations of three major power blocs: the United States, the European Union, and China, seen within the framework of geopolitics, and considering the rise of Chinese big tech. First, this study analyzes ways that the United States—the champion of the free-flow of data that has helped feed the success of the Silicon Valley system—has in specific cases prevented data flows to China on grounds of individual data protection and national security. The danger of this approach and alternate protection through potential U.S. federal data privacy legislation are evoked. Second, the cross-border data flow restriction of the European Union’s General Data Protection Regulation (GDPR) is studied in the context of data exports to China, including where the data transit via the United States prior to their transfer to China. Next, after review of the conditions for a European Commission adequacy determination and an examination of recent data privacy legislation in China, the authors provide a preliminary negative assessment of the potential for such a determination for China, where government access is an important part of the picture. Difficult points are highlighted for investigation by data exporters to China, when relying on EU transfer mechanisms, following the Schrems II jurisprudence. Finally, recent Chinese regulations establishing requirements for the export of data are studied. In this exercise, light is shed on compliance requirements for companies under Chinese law, provisions of Chinese data transfer regulations that are similar to the those of the GDPR, and aspects that show China’s own approach to restrictions on data transfers, such as an emphasis on national security protection. This study concludes with the observation that restrictions for data flows both into and out of China will continue and potentially be amplified, and economic actors will need to prepare themselves to navigate the relevant regulations examined in this study.