Foreign companies in China will have to apply for permission to transfer data out of the country under draft rules, according to a Wall Street Journal report.
This is the latest move by the government to tighten regulation of digital information, according to the report.
The rules will apply to network operators, a term that experts claim likely includes technology companies and other companies that does business through computer networks like financial institutions.
The rule will apply to companies seeking to move more than one terrabyte of data or data with more than 500,000 people’s information. Companies will have to seek permission from both customers and the government before transferring the data out of the country. The Chinese government will review and block data if it believes that it would hurt its political system, economy, technology or security.
These rules are necessary to “secure personal information and the safety of important data, as well as to protect internet sovereignty and national security,” according to the Cyberspace Administration of China.
The industry has criticised the draft rules, with multinational companies stating that keeping data local will raise, costs due to duplicating infrastructure, and impede cross-border business.
“The strongest international standards to protect data privacy are determined by industry consensus, draw on global best practices, and are largely blind to where data is stored or transferred,” said Jake Parker, vice president of the US-China Business Council.
This draft is open for public comment till May 11, and could see changes in its final form. Chinese cyber security regulations were weakened in its final version after push backs from companies and foreign governments.