China Monthly TMT Update – May 2018

China

MIIT publishes the administration measures on road testing of intelligent connected vehicles (for trial implementation)

The Ministry of Industry and Information Technology (“MIIT”) and two other authorities jointly published the Administration Measures of Road Testing of Intelligent Connected Vehicles (for trial implementation) (“Measures”) on 12 April 2018.

Enterprises that apply for testing must be independent legal entities registered in China. They should be capable of manufacturing, developing or testing intelligent connected vehicles (ICVs). They must also be able to pay for any potential damages caused by the tests.

The test drivers should sign a labour or service contract with the respective enterprise. The drivers should also have the correct driver’s licence and have more than three years’ worth of driving experience. The drivers must also have had training in automatic driving and they must be familiar with the operation of the vehicle. The drivers must be able to respond in an emergency.

The tested vehicles must not be registered. They should be equipped with both a manual operation and an automatic driving mode that can safely switch back and forth. During real road tests, the tested ICVs should have on their body the word “automatic driving test” in striking colours to remind surrounding vehicles to pay attention.

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

 

Non-financial institution e-payment services are now open to foreign investors in China

The People’s Bank of China published a Circular to announce the opening of non-financial institution e-payment services to foreign investors on the 21 March 2018.

Under the Circular, if a foreign institution intends to provide electronic payment services for domestic and cross-border transactions of a party located within China’s territory, it should establish a foreign-invested enterprise in China. The institution must also obtain a payment service licence, and have their business and disaster recovery systems within China.

In addition, the storage, processing and analysis of personal and financial information collected or generated by a foreign-invested payment institution must be carried out in China. Where it is necessary to transfer any data to foreign countries, the transfer must be consented to and must comply with any applicable requirements.

The corporate governance, daily operation, risk management, fund processing, reserve fund deposit, and emergency response plan must be carried out in accordance with the regulatory requirements of the People's Bank of China for non-banking payment institutions.

Please click here to read a Law-Now article for more details.

 

MIIT published two working points for standardisation of intelligent connected vehicles and new energy vehicles in 2018

The MIIT published the Working Points for Standardisation of Intelligent Connected Vehicles (ICV) and New Energy Vehicles (NEV) ("Working Points") on 27 March 2018.

For both ICVs and NEVs, the Working Points require various major standards to be established soon. Both Working Points also mention developing and strengthening their respective subcommittees: the Subcommittee 34 on Intelligent Connected Vehicles and Subcommittee 27 on Electric Vehicles. Key manufacturers should engage in the standardisation process and play a major role in its formation.

In addition, these Working Points provide that China should actively engage in the establishment of international standards and communicate with other international parties to promote the development of them.

Please click here and here to read the full text (Chinese only) of these Working Points.

 

MPS publishes the provisions for the supervision and inspection of internet security by public security organs (draft for comments)

The Ministry of Public Security ("MPS") issued the Draft Provisions for the Supervision and Inspection of Internet Security by Public Security Organs (“Draft”) on 4 April 2018 to solicit public comments.

Under the Draft, the MPS and its local branches are authorized with the power to enforce various cybersecurity requirements. The following parties are identified by the Draft as falling under the enforcement focus of the MPS and its local branches: (i) operators of: internet access services, data centres, content distribution, and domain name services; (ii) internet information service providers; (iii) operators of venues where internet access and surfing services are provided; and (iv) operators that have had cybersecurity incidents or violations within the last two years.

The MPS and its local branches will examine whether operators have satisfied the relevant cybersecurity obligations in their daily operations or when major cyber incidents occur. These obligations include (without limitation) keeping accurate and up-to-date user IDs and operation logs; taking sufficient technical and organisational measures to protect cybersecurity and the response to potential incidents; and monitoring the information distributed online and establishing capabilities to terminate illegal distribution.

The Draft also sets out the legal procedures and standards that the MPS and its local branches must follow when carrying out enforcement activities. In addition, the Draft states the administrative measures and punishments that the MPS and its local branches are allowed to use in accordance with the relevant provisions under the PRC Cybersecurity Law.

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

 

The CAC and CSRC jointly issue the guiding opinions on facilitating the services of the capital markets for building a strong cyber power

The Cyberspace Administration of China (CAC) and the China Securities Regulatory Commission (CSRC) have jointly issued the Guiding Opinions on Facilitating the Services of the Capital Markets for Building a Strong Cyber Power (Opinion) on 13 April 2018.

The Opinion requires cyber enterprises with strong independent innovation capabilities to be helped to undertake IPOs and refinancing on the main board, the SMEs board, and the ChiNext. SMEs are encouraged to list on the National Equities Exchange and Quotations. Other small or micro enterprises are encouraged to list on regional equity markets. Other financing channels may also be broadened to facilitate eligible enterprises to issue corporate and convertible bonds.

The Opinion also encourages cyber enterprises to use mergers and acquisitions to boost technological innovation. The Chinese government may provide financial support to these cyber enterprises via various governmental investment funds and PEs.

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