China: China Expands The Scope Of The Data Localisation Requirement Under Its Cybersecurity Law

Last Updated: 27 April 2017
Article by Gabriela Kennedy and Xiaoyan Zhang

Originally published 21 April 2017.

On 11 April 2017, the Cybersecurity Administration of China (CAC) released the draft Security Assessment Measures for Cross-Border Transfer of Personal Information and Important Data ("Draft Measures"). Draft measures and guidelines relating to the Cybersecurity Law (CSL) which was released in November last year, have been expected for a while. The hope has been that such guidelines and measures would shed light on the more opaque terms in the CSL and offer some clarity on the interpretation of broad definitions and concepts. The Draft Measures address the data localisation requirement but instead of narrowing down the concept, they appear to have further expanded the scope of this requirement, thus creating more uncertainty. The data localisation requirement was originally applicable to critical information infrastructures (CIIs) only. The Draft Measures indicate that it should cover both CIIs and network operators. If adopted, the Draft Measures will impose data localisation requirements on multinational companies (MNCs) which previously believed they were not CIIs thus not subject to these rules. The consultation period for the Draft Measures will end on 11 May, shortly before the 1 June effective date of the CSL.

Article 37 of the CSL requires operators of CIIs to store personal information and important data gathered and produced during their operations in China within the territory of China, and to obtain a security assessment from the authorities if such data is to be provided abroad. Article 2 of the new Draft Measures expands Article 37 by further requiring network operators to comply with the rule:

Network operators shall store personal information and important data gathered and produced during operations within the territory of China. Where it is really necessary to provide such information and data to overseas parties due to business requirements, a security assessment shall be conducted in accordance with these Measures.

The Draft Measures propose two types of security assessments a network operator shall conduct: a self-assessment and an official security assessment undertaken by the relevant authorities.

The factors to be considered in the self-assessment include:

  • necessity of the cross-border data transfer
  • the quantity, scope, type, and sensitivity of the personal information to be transferred
  • the quantity, scope, type, and sensitivity of the important data to be transferred
  • the adequacy of the data protection measures the data recipient is capable of adopting, and the network security environment of the recipient country/region
  • the risks of the transferred data being disclosed without authorisation, destroyed, modified, misused, or otherwise compromised
  • the likelihood of causing harms to national security, public interest, and an individual's legitimate interest once the data is transferred abroad
  • any other important factors

The self-assessment shall be conducted at least once a year and/or upon any important change to a transaction involving a cross-border data transfer, including, for example, any significant change in the purpose, scope, quantity, and type of data being transferred, or upon a serious security breach incurred by the recipient or pertaining to the data being transferred.

In addition to the self-security assessment, network operators shall also obtain an official security assessment from the relevant government authorities if one of the following circumstances applies:

  • the personal information to be transferred concerns more than 500,000 individuals
  • the data to be transferred exceeds 1,000 GB
  • the data to be transferred is from sectors such as nuclear, biochemical, national defense, military, healthcare, marine engineering, or contains sensitive geographic data
  • the data concerns security vulnerabilities and protection of CIIs
  • operators of CIIs providing personal information and important data abroad
  • any other cross-border transfers that would potentially affect national security and public interest

An official security assessment shall be completed within 60 working days by the relevant government authorities. The results of the official assessment need to be reported to the CAC.

The Draft Measures prohibit the cross-border transfer of personal information and important data in any of the following three scenarios:

  • Without the data subject's consent. A business entity shall notify the data subject of the purpose, scope, content, the recipient, and the recipient country/region of the transfer, and obtain the data subject's consent. Cross-border transfer of personal information pertaining minors shall obtain the consent of the minor's legal guardian.
  • When the proposed cross-border data transfer may jeopardise national security and public interest, and cause harms to government, economy, science, and national defense.
  • When government authorities deem the transfer inappropriate.

The Draft Measures define "provision of data abroad"/"cross-border data transfer" to mean a network operator providing personal information and important data collected and gathered within the territory of China to an organisation, entity, or individual abroad. The phrase "important data" is defined to mean "data closely related to national security, economic development, and public interest." This definition, however, fails to clarify whether data derived from personal information such as meta data, statistical data, and encrypted data which are typically excluded from cross-border transfer regulations in other jurisdictions, falls under the CSL. The exact procedure and scope of the official security assessment is not specified although the factors listed for the self-security assessment may be relevant considerations.

Despite the remaining ambiguities in some key terms, the Draft Measures bring in some recognisable privacy procedures and principles such as user consent as a pre-requisite to cross-border data transfer, and the yardstick of adequacy of the data protection measures of the recipient/recipient country in determining whether or not to approve a cross-border data transfer. MNCs will need to re-evaluate their data localisation obligations under this expanded rule particularly in light the fact that most MNCs would likely be deemed to fall within the definition of network operator, i.e., owners and administrators of networks and network services providers, which has been liberally interpreted by most commentators so far, as covering any operator of services provided over the Internet, short of any on point clarification from the Chinese authorities.

For now, MNC are advised to concentrate their efforts on taking steps to ensure compliance with the security assessment requirements if any cross-border data transfer is to be contemplated. While the Draft Measures are still open for comment, it is unlikely that lobbying efforts will bear much fruit. As far as any preparatory work for compliance is concerned, MNCs may consider adopting a three-step approach: i) first, re-evaluate their current privacy policies and procedures for their China operations to ensure adequate notice has been given to users and proper consent has been obtained with regards to all cross-border data transfers; ii) second, prepare a self-security assessment check list by gathering information regarding the transfers such as the type, quantity, and sensitivity of the data, and the adequacy of data protection measures of the recipient vendor and of the country/region where the recipient resides and iii) third, conduct a global vendor re-assessment and eliminate high-risk vendors (de-coupling) or consolidating others.

Visit us at

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.