Trade boost hope from mechanism for EU, China cross-border data flows
China EU dialogue - Photo © European Union 2023
(BRUSSELS) - The EU and China launched first discussions Tuesday under a communication mechanism intended to facilitate cross-border transfers of non-personal data for European businesses.
The Cross-Border Data Flow Communication Mechanism is a deliverable of a political agreement reached in 2023 aimed at finding ways to facilitate cross-border transfers of non-personal data for European businesses, as well as their compliance with Chinese data laws.
At the inaugural formal meeting of the new Mechanism - the first cooperation structure of its kind between the two sides – the EU expressed its objective of addressing concrete concerns raised by EU businesses in China regarding cross-border flows of non-personal data.
Data flows are essential to trade. A significant part of the EU-China foreign direct investment stock depends on companies' ability to manage their data across borders. This is particularly relevant for sectors such as finance and insurance, pharma, automotive and information and communication technology (ICT). Cross-border data flows are key for research & development activities, and essential for business to thrive.
In recent years, European businesses in China have faced increasing uncertainty and difficulties to export data from China. They have been specifically concerned about the systematic application of security approvals to exports of all 'important data', following the 2022 adoption of the law on Measures for Data Export Security Assessment. This concern has been further exacerbated by uncertainty as to what constitutes 'important data' as the concept has so far been only vaguely defined and applied in a far-reaching manner. Cross-border data transfer restrictions are also a major contributing factor to a declining confidence of European investors in China.
Further engagement is foreseen at expert and technical levels with a view to review progress at the political level at the next appropriate occasion.