In the news: China passes the Cybersecurity Law, considers permitting investment bank WFOEs and releases a law for the film industry

China passes Cybersecurity Law

After two rounds of drafts, the Standing Committee of the National People's Congress has passed the PRC Cybersecurity Law, which will take effect in June. Key information infrastructure operators are required to cooperate with investigations involving crime and national security, and mandatory testing and certification of network equipment are aso imposed. Foreign groups have criticized each review stage of the law, arguing that it creates barriers to trade and innovation and expressing concerns surrounding the handover of security keys, intellectual property and source codes to the PRC government. Several companies seem to have begun ring-fencing their Chinese data. For instance, Airbnb reportedly sent an email last week informing its mainland users that their personal data will be transferred to servers within the country in accordance with its laws and regulations. China's fortress approach to safeguarding cybersecurity and restricting cross-border data transfers could have a greater on impact domestic companies going outbound than foreign investors. Several questions still need to be addressed, such as what constitutes “important data” and how broadly network operators of “critical information infrastructure” will be interpreted by the government.

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