EU and China launch Cross-Border Data Flow Communication Mechanism
Sabine Weyand, the director-general of DG Trade at the European Commission, on August 27 held an online meeting with Vice-Minister Wang Jingtao of the Cyberspace Administration of China. This meeting marked the formal launch of a new mechanism aimed at addressing the challenges European companies face in China regarding cross-border flows of non-personal data. The initiative stems from a political agreement established in 2023 during discussions between European Commission Vice-President Věra Jourová and Chinese Vice-Premier Zhang Guoqing, as well as between Commission Executive Vice-President Valdis Dombrovskis and Chinese Vice-Premier He Lifeng.
The mechanism’s primary goal is to facilitate cross-border transfers of non-personal data for European businesses while ensuring compliance with Chinese data regulations. This issue was also highlighted by Commission President Ursula von der Leyen and European Council President Charles Michel during their December 2023 meeting with President Xi Jinping, followed by discussions with Premier Li Qiang at the last EU-China Summit. The inaugural meeting of this cooperation structure represents a significant step in addressing the specific concerns raised by EU businesses operating in China.
Data flows are vital for trade, with a considerable portion of the EU-China foreign direct investment stock relying on companies’ ability to manage their data internationally. This is especially important for sectors such as finance, insurance, pharmaceuticals, automotive, and information and communication technology (ICT). The ability to transfer data across borders is crucial for research and development activities and is essential for the success of businesses in these industries.
In recent years, European companies in China have encountered growing uncertainty regarding data exports. Their concerns have intensified due to the systematic application of security approvals for the export of all “important data,” following the 2022 adoption of the law on Measures for Data Export Security Assessment. The lack of clarity surrounding the definition of “important data” has further complicated matters, contributing to the declining confidence of European investors in China. Future engagements at expert and technical levels are anticipated to review progress on these issues at the political level during upcoming meetings.