How Does China Classify or Regulate Overseas Special Data?

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In recent years, China has significantly strengthened its regulatory framework concerning data security, particularly regarding the classification and outbound transfer of special data. As digital trade and cross-border data flows become critical to the global economy, understanding how China handles overseas special data is essential for multinational companies, data service providers, and compliance professionals.

Understanding the Concept of “Special Data”
In China’s regulatory system, special data refers to data that, due to its chinese overseas australia database nature or potential impact on national security, economic stability, or public interest, must be subject to strict controls. It generally falls into three broad categories:

Important Data (重要数据)

Personal Information (个人信息)

Core or State Secrets (国家秘密)

Among these, Important Data and Personal Information are particularly relevant to overseas data transfers. The classification and governance of such data are outlined in several legislative pillars.

Key Laws and Regulations
China regulates overseas special data primarily through three major laws:

Cybersecurity Law (CSL) – Effective since 2017, it introduced the concept of “Critical Information Infrastructure Operators” (CIIOs), who must store important data and personal information within mainland China unless security assessments approve overseas transfers.

Data Security Law (DSL) – Came into force in September 2021, this law introduced a categorization and classification system for data based on its level of importance to national security and public interest. It also clarified penalties for unauthorized data transfers.

Personal Information Protection Law (PIPL) – Enacted in November 2021, this law sets stringent rules on how personal data is processed and exported. It requires that any transfer of personal information overseas must undergo security assessments or obtain individual consent, depending on the circumstances.

Cross-Border Data Transfer Mechanisms
To regulate the export of special data, the Cyberspace Administration of China (CAC) mandates specific procedures for companies seeking to transfer data outside the country:

Security Assessment by CAC: Required for data handlers processing “important data” or large volumes of personal information (typically over 100,000 individuals).

Standard Contract: Organizations can sign standard contracts with overseas recipients, outlining data security responsibilities, and file them with the CAC.

Certification: Data handlers can obtain third-party certification to prove their data protection measures meet national standards.

The security assessment process includes a review of data volume, the nature of the data, national security risks, and whether the foreign party is subject to any discriminatory regulations against China.