Exclusive-Shanghai compiles data list eligible for faster overseas transfer, document shows

By Thomson Reuters May 17, 2024 | 2:04 AM

SHANGHAI (Reuters) – Shanghai has compiled a list of data that can be transferred overseas without security assessments, according to a government document seen by Reuters, a much anticipated move as China tries to lure foreign investment to boost a sluggish economy.

Foreign firms including financials and automakers such as Elon Musk’s Tesla have been lobbying the Chinese authorities to allow cross-border sharing of information after Beijing tightened control of data generated domestically in a national security drive.

The 2022 rules require all “important” offshore transfer of data related to operations within the country to clear security reviews by the Cyberspace Administration of China. This has caused indefinite delays in data transfers, confusion and concern among foreign firms.

The government of Shanghai, China’s market and business capital, has compiled a first batch of “ordinary data” in three sectors – intelligent and connected vehicles, mutual funds and biomedicine. These require the least regulation for data transfers, the government document says.

Under a one-year pilot project, companies registered in the city’s free-trade Lingang Area, where Tesla’s Shanghai factory is located, may transfer data on the list overseas without needing further security assessments, according to the document,which was shared with companies attending an event announcing the white list in Shanghai.

The document details broader plans for Lingang to become a hub for cross-border data, as well as specific scenarios for each of the three sectors that would be classified as “ordinary data”.

For the auto sector, the data includes information involving manufacturing such as procurement and stockpile, research and development including auto design and tests, after-sales services and used car sales.

The Shanghai government’s event on Friday about the new scheme with foreign companies included Tesla, Ford and BMW, said a person with direct knowledge of the matter.

The city government and the three companies did not immediately reply to Reuters requests for comments.

Shanghai’s pilot project follows company demands for more clarity around cross-border data transfers. Data transfer permission was a topic when Musk met last month with top Chinese government officials.

The list of “ordinary data” will be expanded over time, the document says.

Reuters reported in February that Shanghai planned allow faster cross-border data transfer.

(Reporting by Zhang Yan and Casey Hall in Shanghai and Sarah Wu in Beijing; Editing by Miyoung Kim and William Mallard)