Business China

China's Cyber Security Law 101—Compliance for Foreign Businesses

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A few major cybersecurity lapses in China led the government to pass China’s Cybersecurity Law (CSL) back in 2017. It now regulates the operations, construction, security, use and maintenance of networks in mainland China. It is supervised and enforced primarily by the Cyberspace Administration of China (CAC).

Following are the 4 main components of the law.

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Network Operations Security

All network operators are expected to protect networks from damage, interference, and unauthorized visits with the following precautionary measures: 

  • Internal operating policies and management systems with the help of specialized network security personnel.
  • Installation of technological shields against viruses, network intrusions, cyber-attacks and other digitally harmful activities.
  • Monitoring and recording of network performance data for at least the last 6 months.
  • Ensuring classification of data and encryption and backing up of highly sensitive data.

Network Information Security

Once collected and stored by a network operator, personal data also requires proper long-term protection. The Cybersecurity law requires network operators to take the following steps for the said purpose.
  • Maintenance of strict confidentiality regarding the obtained data. 
  • Data is to be collected only to the extent necessary, and used only in a legal manner.
  • Consent is to be gained from the person from whom data is collected and the extent of data collection is also to be made clear.
  • The collected data is not to be disclosed, destroyed or altered later.
  • In the case of a breach, the relevant government authorities are to be informed promptly.
  • In the case of misuse, the subject can ask the network operator to delete the data. In addition, deletion can be requested if incorrect information is collected. 

Geographical limitations

Foreign companies involved in data collection for business purposes cannot transfer the collected data abroad. Doing so will require stringent security checks, without which any transfer whatsoever shall be deemed illegal. 


Multinationals and foreign investors have no easy way forward. Foreign investors must do their best to comply with the law. This brings with it its own set of challenges. 

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