China Monthly TMT Update – July 2017

Draft guideline for the establishment of national industrial system of telematics is published

The Ministry of Industry and Information Technology and the Standardisation Administration of China have jointly published the Draft Guideline for the Establishment of National Industrial System of Telematics (“Draft Guideline”) on 13 June 2017 to solicit public comment.

According to the Draft Guideline, the first step for the establishment of a national industrial system should be setting out the standard system for intelligent & connected vehicles (“ICVs”). The standard system will be divided into four main categories: (i) basic standards, covering term and definition, category and coding, and mark and symbol; (ii) generally applicable standards, covering function evaluation, human-computer interface, function security, and information security; (iii) product and technology application standards, covering information perception, decision-making and warning, control assistance, auto control, and information interexchange; (iv) other relevant standards, covering communication agreement and interface.

Depending on the automation status, the Draft Guideline classifies ICVs into five levels which are driving assistance, partial automation, conditional automation, high automation and full automation. The overall plan is to formulate about 30 standards by 2020 to support driving assistance and low-level automated driving and to formulate more than 100 standards by 2025 to support high-level automated driving.

Please click here the read the full text of the Draft Guideline.

China publishes the National Cybersecurity Incident Response Plan

The Cyberspace Administration of China (“CAC”) published the National Cyber Incident Response Plan (the “Plan”) on 27 June 2017. The Plan is formulated in accordance with the general principles of PRC Cybersecurity Law. It focuses on establishing the national framework on cybersecurity incident responses.

Under the Plan, cybersecurity incidents are defined and divided into four levels which are extraordinarily significant, significant, relatively significant and general. The CAC (and the Emergency Response Office to be established under the CAC) will coordinate with other relevant government authorities to handle cybersecurity incidents. The relevant government authorities will monitor the cybersecurity incidents within their own jurisdictions.

Depending on the specific level of a cybersecurity incident, the government authorities will publish alerts (red, orange, yellow and blue) and take the corresponding response action (level I to IV). While setting out a few general principles (e.g. the government authorities should react in time, and assemble necessary administrative resources and social resources), the Plan does not specify what particular measures must be taken. The Plan also outlines, at a very general level, the authorities’ various other responsibilities, which include organising drills, providing training, improving internal management policies, recruiting qualified personnel, increasing international cooperation, and following up on any post-incident measures taken in practice.

Please click here to read a Law-Now article discussing more details of the Plan.

China publishes the Guiding Opinions on Promoting the Development of the Sharing Economy

The National Development and Reform Commission together with seven other government authorities published the Guiding Opinions on Promoting the Development of the Sharing Economy (the “Opinions”) on 3 July 2017.

According to the Opinions, at the current stage, the sharing economy mainly refers to a new economic form that optimises the allocation of decentralised resources via internet platforms by using network information technologies and thus increasing utilisation efficiency. The sharing economy emphasises the relative separation of ownership and use rights, and focuses on the flexible and creative match between supply and demand.

To facilitate the development of the sharing economy, the government will take a series of encouraging and supportive measures, which include (without limitation) formulating administrative rules suitable for the development of the sharing economy; establishing mechanisms to allocate responsibilities and obligations among platform operators, resource suppliers and users; guiding platform operators to establish customer complaint and dispute resolution channels; strengthening  the protection of personal information and IP rights; promoting public data sharing among national credit evaluating systems; supporting competitive enterprises to invest in overseas countries; and implementing tax administrative measures that are more suitable for the sharing economy business models.

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

China publishes the Draft Security Protection Measures for Critical Information Infrastructure

The Cyberspace Administration of China (the “CAC”) published the Draft Security Protection Measures for Critical Information Infrastructure (the “Draft Measures”) on 11 July 2017 to solicit public opinion. The Draft Measures apply to the planning, establishment, operation, maintenance and use of critical information infrastructure (“CII”) within China, as well as the security protection of CII.

The Draft Measures describes the sectors where CII can be involved. The government will formulate a “Guide for Identifying CII”, in accordance with which the various sectoral government authorities will identify the CII within their respective administrative jurisdictions and report the results. Instead of a specific catalogue listing the scope of CII, this sector-by-sector identification mechanism gives sectoral authorities large discretion and this could lead to some inconsistencies.

The operators of CII will have the primary security protection responsibilities for their CII. A CII operator is subject to a series of requirements on formulating security protection rules, taking necessary technical measures and using qualified products. The Draft Measures restates the data localisation requirement for CII operators. In addition, the Draft Measures require that the operating maintenance of CII must be conducted within China. If it is necessary to conduct the maintenance in an overseas country due to business needs, the relevant sectoral authorities and the Ministry of Public Security must be notified in advance.

Please click here to read a Law-now article discussing the Draft Measures with more details. 

China publishes the revised Administrative Measures for the Licensing of Telecom Service Operation

The Ministry of Industry and Information Technology published the revised Administrative Measure for the Licensing of Telecom Service Operation (“Measures”) on 13 July 2017. The Measures govern the application, approval, use and administration of telecom service operation licences within China.

Compared with the previous version, the revised Measures remove the record-filling requirements for the operation of basic telecom services and the operation of value-added telecom services on a cross-province basis. To be consistent with the recent reforms in corporate law, the Measures remove the requirements of submitting financial statements, capital verification reports and the notice of pre-approval of the company name when applying for an operation licence.

According to the Measures, the government will establish a platform to facilitate online application and administration of licences. In addition, more emphasis will be placed on an applicant or an operator’s credit as demonstrated during its operation activities.

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