Explainer: China tech crackdown 101

By Elles Houweling for Verdict
Tuesday, August 31, 2021

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Recently, China passed a sweeping law aimed at governing how personal data is collected, used and managed. The Personal Information Protection Law (PIPL), set to come into effect on November 1, is the country’s toughest regulation on data yet and has been compared to Europe’s General Data Protection Regulation (GDPR) by legal experts.

“China is now trying to send a clear message that they have a strong data protection regime. Because when you read through the PIPL text, you will see virtually all the provisions of GDPR,” said Ilia Kolochenko, founder of ImmuniWeb and a member of Europol Data Protection Experts Network.

This piece of legislation is primarily aimed at protecting consumers. The general sentiment among Chinese citizens is that many big tech companies have amassed too much power to collect data excessively, with consumers having little to no power to object. In fact, this is not dissimilar to the argument underpinning the adoption of GDPR in the European Union and the UK.

Another company that Verdict reached out to declined to comment on the matter, saying that the topic was currently too sensitive to discuss. This type of caution perhaps indicates that firms operating in China are putting up a brave front while the uncertainty in China continues.

In Kolochenko’s view, consumers, foreign investors, and foreign businesses will enjoy a lot of benefits over the next three to five years. He added that the new regulations, summarising China’s hitherto piecemeal approach to data and privacy regulation, would be a positive change for domestic and foreign businesses alike.

All in all, when it comes to the Chinese market, one needs to understand a complex network of underlying ambitions, whereby short-term changes need to be weighed against long-term goals, as Orme points out: “The big question as far as China is concerned is: are you going to be on the right side of history – going for the mother of all macro bets, which is investing in China – or are you going to be on the wrong side of history?” Read Full Article