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Yan Luo

Yan Luo advises clients on a broad range of regulatory matters in connection with data privacy and cybersecurity, antitrust and competition, as well as international trade laws in the United States, EU, and China.

Yan has significant experience assisting multinational companies navigating the rapidly-evolving Chinese cybersecurity and data privacy rules. Her work includes high-stakes compliance advice on strategic issues such as data localization and cross border data transfer, as well as data protection advice in the context of strategic transactions. She also advises leading Chinese technology companies on global data governance issues and on compliance matters in major jurisdictions such as the European Union and the United States.

Yan regularly contributes to the development of data privacy and cybersecurity rules and standards in China. She chairs Covington’s membership in two working groups of China's National Information Security Standardization Technical Committee (“TC260”), and serves as an expert in China’s standard-setting group for Artificial Intelligence and Ethics.

The field of artificial intelligence (“AI”) is at a tipping point. Governments and industries are under increasing pressure to forecast and guide the evolution of a technology that promises to transform our economies and societies. In this series, our lawyers and advisors provide an overview of the policy approaches and regulatory frameworks for AI in jurisdictions around the world. Given the rapid pace of technological and policy developments in this area, the articles in this series should be viewed as snapshots in time, reflecting the current policy environment and priorities in each jurisdiction.

The following article examines the state of play in AI policy and regulation in China. The previous articles in this series covered the European Union and the United States.

On the sidelines of November’s APEC meetings in San Francisco, Presidents Joe Biden and Xi Jinping agreed that their nations should cooperate on the governance of artificial intelligence. Just weeks prior, President Xi unveiled China’s Global Artificial Intelligence Governance Initiative to world leaders, the nation’s bid to put its stamp on the global governance of AI. This announcement came a day after the Biden Administration revealed another round of restrictions on the export of advanced AI chips to China.

China is an AI superpower. Projections suggest that China’s AI market is on track to exceed US$14 billion this year, with ambitions to grow tenfold by 2030. Major Chinese tech companies have unveiled over twenty large language models (LLMs) to the public, and more than one hundred LLMs are fiercely competing in the market.

Understanding China’s capabilities and intentions in the realm of AI is crucial for policymakers in the U.S. and other countries to craft effective policies toward China, and for multinational companies to make informed business decisions. Irrespective of political differences, as an early mover in the realm of AI policy and regulation, China can serve as a repository of pioneering experiences for jurisdictions currently reflecting on their policy responses to this transformative technology.

This article aims to advance such understanding by outlining key features of China’s emerging approach toward AI.Continue Reading Spotlight Series on Global AI Policy — Part III: China’s Policy Approach to Artificial Intelligence

On September 28, 2023, the Cyberspace Administration of China (“CAC”) issued draft Provisions on Standardizing and Promoting Cross-Border Data Flows (Draft for Comment) (规范和促进数据跨境流动规定(征求意见稿)) (draft “Provisions”) (Chinese version available here) for a public consultation, which will conclude on October 15, 2023. 

The draft Provisions propose significant changes to the existing

On April 11, 2023, the Cyberspace Administration of China (“CAC”) released draft Administrative Measures for Generative Artificial Intelligence Services (《生成式人工智能服务管理办法(征求意见稿)》) (“draft Measures”) (official Chinese version available here) for public consultation.  The deadline for submitting comments is May 10, 2023.

The draft Measures would regulate generative Artificial Intelligence (“AI”) services that are “provided to the public in mainland China.”  These requirements cover a wide range of issues that are frequently debated in relation to the governance of generative AI globally, such as data protection, non-discrimination, bias and the quality of training data.  The draft Measures also highlight issues arising from the use of generative AI that are of particular concern to the Chinese government, such as content moderation, the completion of a security assessment for new technologies, and algorithmic transparency.  The draft Measures thus reflect the Chinese government’s objective to craft its own governance model for new technologies such as generative AI.

Further, and notwithstanding the requirements introduced by the draft Measures (as described in greater detail below), the text states that the government encourages the (indigenous) development of (and international cooperation in relation to) generative AI technology, and encourages companies to adopt “secure and trustworthy software, tools, computing and data resources” to that end. 

Notably, the draft Measures do not make a distinction between generative AI services offered to individual consumers or enterprise customers, although certain requirements appear to be more directed to consumer-facing services than enterprise services.Continue Reading China Proposes Draft Measures to Regulate Generative AI

On March 7, 2023, during the annual National People’s Congress (“NPC”) sessions, China’s State Council revealed its plan to establish a National Data Bureau (NDB) as part of a broader reorganization of government agencies. The plan is being deliberated by the NPC and is expected to be finalized soon. 

According to the draft plan, the new National Data Bureau will be a deputy ministry-level agency under the National Development and Reform Commission (“NDRC”), China’s main economic planning agency that is in charge of industrial policies.  The new bureau will be responsible for, among other areas, “coordinating the integration, sharing, development, and utilization of data resources,” and “pushing forward the planning and building of a Digital China, a digital economy, and a digital society.” 

The plan specifies the new agency will take over certain portfolios currently managed by the Communist Party’s Central Cyberspace Affairs Commission (the party organ that supervises the Cyberspace Administration of China, “CAC”) and the NDRC. Specifically, the NDB will assume responsibility for “coordinating the development, utilization, and sharing of important national data resources, and promoting the exchange of data resources across industries and across departments,” a function currently performed by CAC.  The NDB will also absorb the NDRC teams responsible for promoting the development of the digital economy and implementing the national “big data” strategy.Continue Reading China Reveals Plan to Establish a National Data Bureau

In addition to the two developments we reported on in our last blog post, on July 7, 2022, the long-waited, final version of the Measures for Security Assessment of Cross-border Data Transfer (《数据出境安全评估办法》, “Measures”) were released by the Cyberspace Administration of China (“CAC”).  With a very tight implementation schedule, the

After more than seven months since China’s Personal Information Protection Law (《个人信息保护法》, “PIPL”) went into effect, Chinese regulators have issued several new (draft) rules over the past few days to implement the cross-border data transfer requirements of the PIPL.  In particular, Article 38 of the PIPL sets out three legal mechanisms for lawful transfers of personal information outside of China, namely: (i) successful completion of a government-led security assessment, (ii) obtaining certification under a government-authorized certification scheme, or (iii) implementing a standard contract with the party(-ies) outside of China receiving the data.  The most recent developments in relation to these mechanisms concern the standard contract and certification.

Chinese Government Issues Draft SCCs

On June 30, 2022, the Cyberspace Administration of China (“CAC”) released draft Provisions on the Standard Contract for the Cross-border Transfers of Personal Information (《个人信息出境标准合同规定(征求意见稿)》, “Draft Provisions”) for public consultation.  The full text of the Draft Provisions can be found here (currently available only in Mandarin Chinese).  The public consultation will end on July 29, 2022.Continue Reading Cross-border Data Transfer Developments in China

As tensions continue to rise between China and the United States, the Chinese government has taken a step forward in actualizing the “Unreliable Entity List,” first announced by China’s Ministry of Commerce on May 31, 2019, following the addition of Huawei and affiliates to the U.S. Commerce Department’s “Entity List.” Now, as the U.S. government

China has set out on an ambitious agenda of aiming to become the world leader in artificial intelligence by 2030. Policy experiments for a critical part of China’s AI development strategy, and to that end multiple government think tanks have set out formulating standards that may impact AI innovation in China.

The China Electronics Standardization

On June 27, 2018, China’s Ministry of Public Security (“MPS”) released for public comment a draft of the Regulations on Cybersecurity Multi-level Protection Scheme (“the Draft Regulation”). The highly anticipated Draft Regulation sets out the details of an updated Multi-level Protection Scheme, whereby network operators (defined below) are required to comply with different levels of

On January 2, 2018, the Standardization Administration of China (“SAC”) released the final version of the national standard on personal information protection, officially entitled GB/T 35273-2017 Information Technology – Personal Information Security Specification (GB/T 35273-2017 信息安全技术 个人信息安全规范) (hereinafter “the Standard”).  The Standard will come into effect on May 1, 2018.As highlighted in our previous coverage of drafts of the Standard (see here and here), although it is nominally a voluntary framework, the Standard effectively sets out the best practices that will be expected by regulators auditing companies and enforcing China’s existing (but typically more generally-worded) data protection rules, most notably the 2016 Cybersecurity Law.  Drafts of the Standard — even prior its finalization — have also in some cases been the basis for non-compliance remediation plans and undertakings agreed between companies and the Cyberspace Administration of China (“CAC”) following CAC audits, as we reported here.The Standard applies to “personal information controllers,” namely any private or public organization that has “the power to decide the purpose and method” of processing personal information.  This is seemingly modelled on European law’s “data controller” concept.The Standard regulates the use of “personal information” by these controllers, a term largely aligned with strict conceptualizations of “personal data” under the EU’s General Data Protection Regulation (“GDPR”).  Examples of “personal information” listed in an annex to the Standard include device hardware serial codes, IP addresses, website tracking records, and unique device identifiers, among other things.  The definition of “sensitive personal information,” however, takes a different approach to the GDPR: rather than applying only to specific types of data, the Standard takes a risk-based approach, defining “sensitive” personal information as any personal information which, if lost or misused, is capable of endangering persons or property, easily harming personal reputation and mental and physical health, or leading to discriminatory treatment.  According to the Standard, this could for example include national identification card numbers, login credentials, banking and credit details, a person’s accurate location, information on a person’s real estate holdings, and information about a minor (under 14 years old).

Similar to general principles of most data protection laws, the Standard requires transparency, specificity and fairness of processing purpose, proportionality (use and retention of only the minimum information necessary to achieve the stated purpose), security, risk assessment, and the respect of individuals’ rights to control the processing of information about them.  It also requires either consent from individuals, or reliance on a limited range of exceptions set out in the Standard, for the purpose of collection and processing of personal information.

This article looks at some of these aspects in more detail, including some of their key divergences from European data protection law, including the GDPR.  (Please note that this is not an exhaustive description of the Standard, nor is it a detailed comparison with the GDPR.)

Consent and other legal grounds for processing

The Standard lays down a basic rule that the collection of personal information and its subsequent use should be affirmatively consented to ahead of time, with further (informed) consents being required for any activity exceeding the scope of the original consent.

For sensitive personal information, the informed consent must be clear and explicit, and the information to be provided must distinguish between the “core business functions” of the products or services being provided, and “other products or services, such as those that provide additional capabilities.”  If an individual refuses to consent to the ancillary uses of their data, the collector/controller may decline to provide the additional services, but may not cease or degrade the provision of core business products and services to that individual.

Where the data relates to a minor, explicit consent must be obtained from the minor’s parent or guardian, unless the minor is at least 14 years old, in which case consent may also be obtained directly from him or her.

The Standard derogates from these consent requirements by including a number of non-consensual grounds for collecting and processing personal information.  Analogues of several of those grounds can be found in the GDPR, but others are different, for instance necessity for troubleshooting products and services, or necessity for reporting by news agencies.  Collecting information from public sources, such as news reports, also does not require prior consent.  Some of the more permissive processing grounds found in GDPR Article 6 (for non-sensitive data) are absent, such as necessity for the legitimate interests of the controller or a third party, even though the Standard’s exceptions arguably cover some of the commonly seen examples of legitimate interests, including necessity to perform a contract.

As further described below, consent is usually also required to the sharing or transferring of personal information.

The Standard also imposes a requirement akin to the GDPR’s “purpose limitation” requirement (namely, that all uses of the information, including secondary uses, should be reasonably connected with the original purpose of collection of the data, and should be reauthorized if that is not the case).  It sets aside that principle for certain research and academic purposes, provided the personal information is de-identified in public disclosures about the research.


The Standard requires the inclusion of certain information in privacy notices, including but not limited to:

  • For each business use: personal information collection and processing rules such as the collection method and frequency, place of storage, and frequency of collection;
  • If data is shared, disclosed or transferred, the types of data involved, the types of the data recipients, and rights and obligations of each party;
  • Data subject rights, and complaint handling;
  • Security principles followed, and security measures implemented;
  • Security risks that may exist after providing personal information; and
  • The controller’s “usual office location” and contact information.

The Standard does not explicitly allow such information to be omitted from notices if the individual already possesses it from other sources (e.g. from app pop-up notices, or through their regular dealings with the organization), unlike the GDPR.  Privacy notices must be delivered to individuals “one by one,” though if costs become too high or when there are significant difficulties, a public announcement is possible instead.

The Standard also requires cessation of processing to be notified to individuals, either individually or by general announcement.

Rights of individuals

The rights conferred on individuals are similar to those under the GDPR, although:

  • The Standard requires requests to be complied with in less than 30 days (or other legally-stipulated period), whereas under certain circumstances the GDPR allows further extensions;
  • The Standard includes a “straightforward account cancellation” right;
  • The erasure right appears somewhat strengthened, through omission of exceptions found in the GDPR (which for example allows refusal of erasure requests in the interests of freedom of expression and information, or scientific research), and includes significant obligations to notify third parties of the erasure (and in some cases, order them to also delete the data). On the other hand, the right can only be invoked after processing violates applicable law or an agreement with the individual.
  • The data portability right arises in a wider range of situations, but is limited to certain information, such as health, education or occupational information.

Use of vendors / processors

Before outsourcing the processing of personal information, the Standard requires controllers to conduct risk assessments and ensure that the vendor (processor) would offer adequate security; once the subcontracted processing is underway, controllers must supervise the processors, including through audits and assessments.  Processors must obtain controllers’ permission before further subcontracting the processing services.

Like the GDPR, processors must help controllers comply with data subject requests, and promptly notify controllers of security incidents.  The Standard adds broader duties to promptly notify controllers when processors are “unable to offer an adequate level of security” or after they process the information entrusted to them other than strictly in accordance with the controller’s requirements.

Data sharing

Unless the information is de-identified, prior notice and consent from individuals to the transfer or sharing of their data is required (distinct from the consent that covered the initial collection and processing of data), as is also required by China’s Cybersecurity Law.  By contrast, the GDPR does not strictly require consent to sharing of data.  However, the GDPR and the Standard both suggest that the sharing be covered by some sort of prior risk assessment and mitigation exercise.

The Standard also sets out specific record-keeping obligations regarding the sharing or transfer of personal information, and an obligation on controllers to assume a degree of responsibility for any damage caused to individuals by the transfer or sharing of their personal information.

Alternative rules apply in respect of mergers, acquisitions, reorganizations or “other kinds of change,” as well as to public disclosures of personal information.  Public disclosures of biometric information are prohibited.

As with processing grounds, exceptions to the aforementioned sharing, transfer and disclosure consent requirements apply, for instance, where the data was collected from public sources, or if the disclosure is necessary for criminal investigations.

Security and deletion

The Standard prescribes that controllers must (i) have internal procedures to grant access to personal information and authorize operations such as batch modification, copying and downloading; (ii) keep records of data processing; (iii) appoint a Chief Information Security Officer plus designated “key personnel” with leadership responsibility for information security; (iv) conduct periodic (at least annual) staff training; (v) conduct security testing before the release of products or services; and (vi) if the organization is large enough or processes information about more than 500,000 people (or expects to do so in the next 12 months), have a dedicated information security team.  Individuals with access to large amounts of sensitive personal information must be subjected to background checks.  In requiring these specific programs, the Standard is more granular than the GDPR.

Incident response

The Standard requires organizations to maintain information security incident response plans, undertake regular training and emergency drills (at least once a year), implement incident record-keeping and assessment, adhere to the CAC’s “National Network Security Incident Contingency Plan” for notification of incidents to authorities, and notify cybersecurity incidents to affected individuals.  Unlike the GDPR, no severity threshold or specific time period for reporting is expressly mentioned under the Standard.

Note that the Cybersecurity Law requires “network operators” to notify an incident to regulators and affected individuals when there has been actual or potential “leakage, damage, or loss” of personal data (Article 42).  It is not clear whether a data controller would be subject to this reporting obligation if the breach occurs within their processors’ network, nor what kind of incidents may be counted as “potential” breaches.

Periodic data protection impact assessment

Finally, the Standard requires data protection impact assessments (“DPIAs”), which are not unlike those in the GDPR, although the GDPR is less specific about how frequently they must be conducted: under the Standard, DPIAs must be repeated at least annually, as well as when (i) new legislative requirements come into effect, (ii) business models, information systems or operational environments undergo a major change, or (iii) a significant personal information security incident occurs.  The assessment reports must be “open to the public in appropriate form.”

International data transfers

The Standard states at a high level that data controllers will need to go through a security assessment if they would like to transfer personal data out of China.  More detail regarding cross-border data transfers are expected to be covered by separate regulations and standards.

Continue Reading China Issues New Personal Information Protection Standard