Shanghai Mulls Faster Offshore Data OK For Foreign Firms

Shanghai plans to accelerate approvals for foreign firms wanting to send their local data offshore, according to four sources with knowledge of the matter, Xie Yu and Engen Tham reported for Reuters.

The rules unveiled in 2022 require all "important" offshore transfers of data related to operations within the country to clear security reviews by the Cyberspace Administration of China (CAC), causing confusion and concern among foreign firms.

In recent weeks, the Shanghai government has discussed the so-called fast-track approval initiative with representatives of some foreign firms operating in the commercial hub, including Western banks and asset managers, said two of the sources.

The planned move comes as China is looking to woo foreign investors amidst a sluggish post-pandemic recovery, a real estate slump, and deepening market turmoil.

Foreign financial firms have been lobbying the Chinese authorities to allow cross-border sharing of information, especially after Beijing tightened control of data generated within its borders in a national security drive.

The rules unveiled in 2022 require all "important" offshore transfers of data related to operations within the country to clear security reviews by the Cyberspace Administration of China (CAC), causing confusion and concern among foreign firms.

Shanghai is likely to allow foreign firms to transfer data offshore by leveraging its sprawling free trade zones, which enable the local government to offer tax and other incentives to global companies operating there, said the two sources.

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