China Monthly TMT Update – August 2017 

China publishes the development plan for AIs

The State Council published the Development Plan for the New Generation of Artificial Intelligence (the “Plan”) on 20 July 2017, which sets out the strategic targets for the development of artificial intelligence (“AI”) in China.

According to the Plan, by 2020, the technologies and applications of AI in China should generally be in line with the most advanced levels in the world. AI industries will become a new and important economic growth point. The application of AI technologies will have become a new method to improve people's livelihoods. By 2025, the fundamental AI theories should have achieved significant breakthroughs and some technologies and applications should have reached a world-leading level. In addition, AI should become a major power driving the industrial upgrade and economic transition. The establishment of an AI society should mean that positive developments are achievable. By 2030, AI theories, technologies and applications should generally reach a world-leading level. China should become one of the major AI innovation centres in the world.

The Plan also sets out, at a high level, the guiding principles, key development areas, resource allocation and policy support for the development of AI in China.

Please click here to read the full text (Chinese only) of the Plan.

The government organises special tasks to review privacy policies

At the end of July, the Cyberspace Administration of China together with three other government authorities organised some special tasks to review the privacy policies adopted by the main network operators in China.

In the first round, the 10 network operators included are the operators of WeChat, WeiBo, Taobao, JD, Alipay, GaoDe Map, BaiDu Map, Didi, Umetrip, and Ctrip. The focus of the review is whether the operators have specified clearly whether they will be collecting personal information, the methods of collection, how personal information will be used (e.g. whether the information will be used to generate user profiles and the purpose of the profiling or whether the information will be used for direct marketing or advertising), users’ rights concerning the access, deletion and revision of their personal information and the relevant methods or limitations.

In addition to ensuring the implementation of the personal information protection requirements provided in the PRC Cybersecurity Law, the government also want to use these tasks to help improve the personal information protection standards in these industries. After the tasks are finished, the government may publish standard or model clause policies.

MIIT publishes measures for the security assessments of industrial control systems

The Ministry of Industry and Information Technology (“MIIT”) published the Administrative Measures for the Assessment of the Information Security Defence Capabilities of Industrial Control Systems (the “Measures”) on 11 August 2017.

An industrial control system (“ICS”) is the integration of personnel, hardware, software, and platforms involved in the different parts of industrial control. It includes (but is not limited to) industrial production control system (e.g. programmable logic controller (PLC), distributed control system (DCS), supervisory control and data acquisition (SCADA)), industrial control process safety protection system (e.g. emergency shutdown device (ESD), safety instrumented system (SIS)), industrial production scheduling and management information system (e.g. manufacturing execution system (MES), enterprise resource planning (ERP)), and industrial service application system (e.g. cloud platform, big data platform).

An assessment on the information security defence capabilities of an ICS can either be ordered by the MIIT or applied by the operator. All assessments shall be conducted in accordance with the specification, requirements and procedures provided in the Measures and its appendix. The Measures do not specify whether the assessments on an ICS are part of the various security assessments and examinations mentioned in the PRC Cybersecurity Law. Further guidance or explanation might be published in the future.

Please click here to read the full text of the Measures.

The first internet court opens in China

China's first court specialising in handling internet-related cases opened on 18 August in the city of Hangzhou, which is the central hub of ecommerce in China.
The Hangzhou Internet Court will mainly handle the following types of cases that fall within the jurisdiction of the people's courts of first instance in Hangzhou: online shopping contract disputes, online shopping product liability disputes, online service contract disputes, disputes concerning loan contracts signed and performed online, online IP disputes.

The Hangzhou Internet Court will explore the possibility of organising online trials, and establish more tailor-made and efficient trial models to suit the development of ecommerce activities.

Please click here to read our full Law-Now.

China Unicom announces reform plan

In late August 2017, China Unicom announced its plans to raise approximately 77.9 billion RMB through an ownership reform plan. This is a significant move by China's government to implement its plan to revitalise State owned firms by using private capital and ultimately creating more investment opportunities by using both state and private ownership. There are 14 proposed investors who will invest in China Unicom including the main technology companies such as Alibaba Group Holing, Tencent Holdings, Baidu, Suning and JD.com.

The initial announcement was met with some confusion as China Unicom removed the statement from the Shanghai stock exchange website and trading of its shares was suspended. The China Securities and Reform Commission later issued a statement confirming that the reform is in compliance with the laws.