Shanghai is planning to fast-track approvals for foreign firms to transfer local data offshore, a significant easing of China’s strict data control rules introduced in 2022. This move aims to attract foreign investment as China faces economic challenges, including a slow post-pandemic recovery. The initiative, discussed with foreign companies, including banks and asset managers, could leverage Shanghai’s free trade zones for easier data transfer. Despite existing regulations requiring security reviews for offshore data transfers, this separate plan for Shanghai suggests a more open approach, potentially implemented within the year. The move responds to foreign firms’ concerns over data transfer delays and stringent rules, which have contributed to declining foreign direct investment in China.
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