China vows to support firms in financing abroad; will strengthen review of leakage risks on key data sent overseas

China’s cyberspace watchdog said on Friday that it will always support domestic firms in making rational use of overseas capital markets for financing and development. Meanwhile, it will focus on reviewing and assessing leakage risks of key data from companies planning to raise funds overseas.

Sun Weimin, head of the cybersecurity coordination bureau of the Cyberspace Administration of China (CAC), told a news conference on Friday that reviews of internet platform operators that plan to raise money overseas will center around possible risks of stolen, leaked, damaged or illegally used core data or personal information.

Factors such as the risk of critical information infrastructure, key data, or a large amount of personal information being controlled, and maliciously used by foreign governments, as well as other network information security risks, will also be assessed and reviewed, Sun said.

Observers said such remarks by a senior official could serve as an assurance for industry players, pointing to a clear path and stipulating key points for companies to follow, which will benefit a wide range of internet companies that wish to list overseas.

China aims to establish a data security protective screen against potential risks, becoming more stringent on data security, as the rapid development of the internet economy is also posing data security risks.

A number of Chinese internet giants faced regulatory scrutiny for data security violations over the past year or so.

In the latest move, China’s internet regulator fined ride-hailing giant Didi Global 8.026 billion yuan ($1.2 billion) for 16 legal violations in late July, calling an end to a cybersecurity probe that lasted more than one year.

The announcement may mark the beginning of a gradually normalized business climate for Didi, though rectifications are likely to continue for a while.

In the next step, the CAC will guide and urge Didi to carry out corresponding rectification work to eliminate hidden security risks, said Niu Yibing, vice minister of the CAC, noting that the agency will strengthen law enforcement in areas such as network security, data security and personal information protection, and deal with illegal acts that endanger national network security or data security, and infringe on residents’ personal information, in accordance with the law.

Niu also said the agency was supportive of the sector’s sound development and wanted to create a healthy, rule-based environment that can help firms to grow stronger.

In the first half of 2022, a total of 3,491 websites and platforms were interviewed by the network information system across the country. As a result, 283 were fined and punished, 419 were suspended or updated, 177 mobile apps were removed from app stores, and 12,292 illegal websites were cancelled or closed, CAC data showed.

Source: Global Times

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