German security authority acquits Xiaomi smartphones
Half of migrant worker children grow up without parents
‘Tibet Hill’? Dispute over street names around London embassy
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Dear reader,
The official religious communities in China are cooperation partners of the government. That is no surprise. After all, Christian CP organizations were founded on Mao’s behest to eliminate any spiritual competition for his ideology. This still works today. Pictures of Xi Jinping are more prominently placed in state churches than those of Jesus.
Nevertheless, Christianity has found its own profile in China. Hong Kong, on the other hand, still has thriving Christian communities dating back to British times. The city’s recently inaugurated Catholic bishop thus occupies a key role for Chinese Christians. Fabian Peltsch’s analysis looks at the current state of Christianity in China and the challenges of the new bishop who finds himself between deeply devout communities and an unsympathetic government.
Religion is not exactly the specialty of the atheist CP leadership. It is more proficient in industrial development. China is already so far advanced in this regard that even the Americans come knocking looking for expertise – in autonomous driving, for example. Google’s sister company Waymo is teaming up with Geely subsidiary Zeekr. As a testing ground, China has the advantage that autonomous cars can gain field experience in the harsh conditions of everyday life, analyzes Frank Sieren.
It took Stephen Chow Sau-yan months of consideration in prayer before accepting the post of bishop of Hong Kong. “I didn’t feel the call in myself to be bishop,” the 62-year-old explained in a press conference. In the end, it was a handwritten letter from Pope Francis that convinced the Jesuit. “The Holy Father wrote something in his handwriting that he believed I should be the bishop … and so, for me, this was a sign.”
The Hong Kong-born cleric, who trained as a psychologist in the United States, now has the difficult task to build “a bridge between the government and the Church in HK, and between the Catholic Church, fellow Christian denominations, and other religions,” he said in his inaugural speech in December. Just over 12 percent of the city’s citizens identify as Christian. Schools, universities, and social institutions often have a Christian background.
The political turmoil in Hong Kong has left deep cracks within the Christian community. “The political situation is causing great uncertainty among Christians,” said Pastor Tim Buechsel in an interview with China.Table. The German-American has been working for the Vine Church in Wanchai District since 2018. Many church members have fled the city, he says. The Vine Church still had 2,500 members at the end of 2019. Now there are some 1,300 left. A considerable proportion fears that they will soon no longer be able to practice their faith freely under the growing influence of the Chinese Communist Party.
Charity also quickly reaches its limits in today’s heated political atmosphere. Often, there are even conflicts within families over political disagreements. “The mood is explosive. Parents no longer talk to their children and vice versa,” the pastor said. Despite dwindling numbers of members in his community, some new believers have even joined, “because many people no longer feel understood in their existing social spheres”.
Christians among protesters and government
The schism within families reflects the city’s political fronts. Many members of Hong Kong’s protest movement are devout Christians, including its leaders such as Joshua Wong, Agnes Chow, and Benny Tai, who have repeatedly cited their faith as an inspiration for their political commitment. A study by the city’s University Grants Committee found that nearly 25 percent of Hong Kong’s students are Christians. One of their main protest songs was “Sing Hallelujah to the Lord.”
And even Carrie Lam, the head of government who is loyal to Beijing, is also a follower of Catholicism, as was her predecessor Donald Tsang. Although some Hong Kong protesters find inspiration in Dietrich Bonhoeffer, a Christian resister who was murdered in a concentration camp, the Hong Kong protest movement is by no means an “us against them” in the shade of the cross.
The church’s continued weighty role in Hong Kong’s social life is a legacy of British colonial rule, as Buechsel explains. “Because the British could not cater to certain needs, or perhaps even deliberately refused to, Christian organizations filled these gaps, especially during times when many refugees arrived in Hong Kong.” Today, his congregation has an average age of 30. Worship services and home groups are held in English, Cantonese, or Mandarin.
Uncertain future for practiced faith
It is uncertain what the future holds for the Christian church in Hong Kong. For Hong Kong Christians, the big challenge in the coming years is a rapidly changing political situation. “That might mean we have to find new ways of dealing with reality,” Buechsel says. The 43-year-old points to mainland China. Between 40 and 120 million Christians live there, according to estimates. However, churches there are under strict state supervision. China has its official state church, congregations of people with foreign passports, and many underground churches.
Because the former dictator Mao Zedong did not tolerate any authority besides himself, the party had an official Chinese state church founded as early as the 1950s, which today has a Protestant and a Catholic branch. The Chinese Patriotic Catholic Association (CPA) and the Three-Self Patriotic Movement consider themselves to be Christian cooperation partners of the government. Portraits of the great chairman are emblazoned on their premises. Today, pictures of Xi Jinping are often placed more prominently than those of Jesus and his apostles.
The underground church, on the other hand, which still swears allegiance to the pope and holds its services in private, operates in a gray area and is more or less tolerated depending on the political climate. More than two-thirds of Chinese Christians belong to this group. Since Xi’s inauguration, the situation for China’s believers has deteriorated considerably, explains Thomas Mueller of Open Doors, an international aid organization that advocates for Christians in more than 70 countries around the world. “The gray area that used to exist has shrunk considerably if it still exists at all. This became particularly noticeable in 2018.”
Fear of “Chinese” conditions
In the past, the party published a white paper calling on all religions to “submit to and serve the interests of the state and the Chinese people “. The rules by which clergy are selected were tightened, as were the rules they had to obey in their daily work. In December 2021, another strict set of regulations on the use of the Internet for religious organizations was introduced – “a medium that is particularly important in times of pandemic,” Müller explains. They will come into force in March.
Even in the state churches, which “continue to faithfully proclaim the Christian message,” ideological pressure has once again increased “to the point of coercion.” Pastors would be compelled to praise the Communist Party and its policies, for example, in fighting the pandemic. Others must submit their sermons in advance for review. “Therefore, there are also repeated reports that Christians are seeking the way (…) into underground churches,” says the analyst of the Christian aid organization.
The Vatican has not yetfound aclear strategy on how to deal with the situation in China. “One of the most difficult issues in recent decades has been the appointment of bishops, a right that the Vatican claims worldwide,” Mueller explains. “Consequently, some bishops were abducted and placed under house arrest by the Communist Party. Conversely, there are bishops appointed by the party but not approved by the Vatican.”
Vatican concessions to Beijing
In an attempt to liberate Chinese Christians from the gray area and thus perhaps convert more Chinese, Pope Francis has already officially recognized eight bishops of the state church. It’s a concession that didn’t quite work out, Mueller notes. The agreement has also been used by the Communist Party to increase calls for underground churches to join the CPA. But many Chinese Catholics who remain loyal to the Vatican reject this call.
The new Hong Kong bishop Stephen Chow must now also balance on this fine line. For three years, the Vatican had been searching for a suitable candidate with enough tact and sensitivity for the task. Cardinal Joseph Zen, one of Chow’s predecessors, is still one of Beijing’s harshest critics. And in recent years, Chow has also participated in events such as the Tiananmen commemorations in Hong Kong on June 4. Since the introduction of the Security Law in 2020, such participation has been punishable in the city.
Since taking office, however, he has chosen diplomatic words: “God who wants us to be united,” he wrote in an essay in December. “We hope to have dialogue and develop better understanding.” He said he sees himself in the role of “a bridge” in this effort: “Being a bridge, in a sense, entails bearing the burden. My words may not cater to both sides, but at least, it brings people from the two sides to come together in the middle. Otherwise, there is no future for society. My role is to act as a bridge.”
Geely brand Zeekr and Google subsidiary Waymo are planning to launch an all-electric, autonomous car. The first released images show a minivan with sliding doors that open in opposite directions and a large lidar radar system on the roof. A steering wheel and exterior and rearview mirrors are not present, at least in the concept. A human driver, who would require these, is said to no longer be necessary.
Instead, the car has a central screen that can communicate with its passengers via voice control. According to Zeekr, however, customers can fully customize the cabin. The spacious e-minivan will be used primarily in the USA as a ride-hailing vehicle for Waymo.
It has not yet been announced where the still unnamed model will be manufactured. According to Zeekr, the vehicle will be designed at its China Europe Vehicle Technology Center in Gothenburg, Sweden. It will be designed in Sweden because the designers of sister brand Volvo are also located there. The technology is to be based on a new Geely platform that follows an “open source” concept.
Mutual assistance
Zeekr CEO Andy An says the strategic partnership with Waymo and shipping of vehicles helps “share our experience, ideals and provide our expertise in collaborating on a fully electric vehicle.”
Zeekr, the Geely Group’s new EV brand, just began the production of its Model 001 last October. Its models will be built based on Geely’s SEA (Sustainable Experience Architecture) electric platform, unveiled in September 2020, which develops in-house battery and electric drive technologies.
Geely founder Li Shufu, who is also the largest single shareholder in Daimler, wants to establish Zeekr as a hip lifestyle brand. The 001, which is based on sleek Porsche shapes, was also designed at the design center in Gothenburg. “Chinese carmaker Geely plans to attack American electric carmaker Tesla head-on,” writes the German automobile magazine Auto, Motor, Sport.
Waymo is responsible for the development of autonomous cars in Google’s parent company Alphabet. Waymo has so far been testing its driverless vehicles without backup drivers mainly in California and Arizona. Like Tesla, however, the company wants to get its foot in the door in China. Waymo’s autonomous vehicle division has already registered a company in Shanghai called Huimo Business Consulting. “Huimo” is not only the word for Waymo but translates to “emblem” in Mandarin.
If not a search engine, then at least mobility
Google was not allowed to and did not want to establish its search engine in China. The situation is different for autonomous vehicles. The People’s Republic is not only the largest automotive market in the world but also the most important test field for autonomous vehicles alongside the USA. Since 2019, the number of test projects for autonomous cars on Chinese roads has more than doubled. No other country develops as many software-supported automobiles as China. Huge pools of data are generated in China’s often chaotic traffic. These, in turn, are the fuel for progress and improvements in the entire autonomous vehicle industry.
For a long time, Waymo was the leader when it came to autonomous driving. But in the meantime, the Americans have been overtaken by Chinese specialists for self-driving cars. For example, by Auto X from Shenzhen. The first production plant for Level 4 autonomous cabs opened last December.
These cars have already been on the road for a year in the 168-square-kilometer Pingshan district in heavy everyday traffic. Waymo, on the other hand, still has drivers behind the wheel, for example in “during inclement weather,” as a Waymo spokeswoman confirms. However, passengers receive this message on their app even when the sun is shining. Auto X has long since left this stage. Moreover, the traffic in Shenzhen is much heavier than in Phoenix.
The Chinese government is promoting autonomous driving, for example by equipping the public road network with the necessary infrastructure. The expansion of the 5G network is intended to accelerate the high-speed transmission of data between cars and traffic systems. The USA is also lagging behind in this area.
Autonomous driving: the state is applying pressure
The long-term goal here, too, is of course expansion overseas: As with e-mobility, China also wants to set global standards in autonomous driving as a market leader right from the start. According to the development strategy for “smart vehicles” published by the National Development and Reform Commission in February 2020, China is aiming for mass production of Level 3 autonomous vehicles by 2025. Level 3 autonomous driving allows vehicles to take full control in certain situations, such as when parking or changing lanes. Auto X is already a step ahead. Waymo is also working with Geely to now ramp up its development with Chinese know-how.
In addition to Waymo, General Motors is also investing in self-driving technology in China. The US automaker has invested around $300 million in the Beijing EV startup Momenta. Momenta, in turn, has set up a joint venture with BYD to deploy autonomous driving functions in BYD cars. In China, however, search engine provider Baidu is so far the leader in the field of autonomous cars.
Baidu has been testing its Apollo Go robot cabs in Beijing since October – without a driver behind the wheel, but like Waymo with security personnel on board for emergencies. There are currently 67 self-driving cars being operated in the Yizhuang district on the outskirts of Beijing. Baidu CEO Robin Li wants to expand his Apollo Go robot cab service to 65 cities by 2025 and 100 cities by 2030. All manufacturers are already eyeing Level 5 automation. This is the level at which the car can drive autonomously under all conceivable conditions. The US magazine Automotive World assumes that this level will only be achieved if the major players join forces. The cooperation between Waymo and Geely is the first step in this direction.
Autoindustrie
News
VW temporarily closes Tianjin plant due to Covid
Volkswagen hastemporarily shut down itsplant in Tianjin because of a Covid outbreak among its workforce. The car factory in northern China, located about 100 kilometers from the capital Beijing, had already suspended operations earlier in the week after employees contracted the virus, a spokesman said Thursday. On Wednesday, 41 cases of domestically transmitted infections with confirmed symptoms were reported after 33 were reported the day before, according to data from the National Health Commission.
At the site, VW operates a component plant and a plant for automatic transmission in cooperation with its Chinese partner FAW. It is said that both plants had tested all employees twice this week and were now waiting for the results. The hope is to resume production soon and make up for the lost time. Volkswagen has had to temporarily halt production at several sites in China since the pandemic broke out two years ago.
BDI expects continued supply chain problems due to Covid
The Federation of German Industries (BDI) continues to expect supply chain problems stemming from the Covid pandemic in 2022. Although the order books of industrial companies in Germany are full, missing or late deliveries of raw materials and base material could disrupt production. The worst is probably over in the automotive industry, but other sectors reportedly expect issues until the end of the year. “These bottlenecks will slow down industrial value creation by more than €50 billion in each of 2021 and 2022,” BDI President Siegfried Russwurm said in Berlin on Thursday. Despite these constraints, the association expects economic growth of 3.5 percent for 2022, and exports could even increase by four percent.
Meanwhile, two Omicron caseshave beenreported in the Chinese port city of Dalian. Students returning from a visit to Tianjin had infected themselves. Dalian is the second major port city in China with confirmed Omicron cases after Tianjin. Its ports are among the twenty largest in the world, Bloomberg reports. Major companies such as Volkswagen, Toyota, and Airbus have factories in the cities. Toyota also had to shut down its assembly lines.
In addition, there are reports that container ships are avoiding the port in Ningbo and heading to Shanghai instead. Delays had occurred in Ningbodue to Covid infections affecting truck traffic to the port. Accordingly, this caused traffic jams outside the port of Shanghai. Schedules for container ships will be delayed by about a week, freight forwarders told Bloomberg. The delays could spread to the US and Europe, as they did last year. nib/rtr
Autoindustrie
EV market grows rapidly
Last year, 2.9 million battery-electric vehicles were sold in China, including 2.73 million passenger cars. That marks a 160 percent increase over the previous year, according to new data from the China Association of Automobile Manufacturers. Plug-in hybrid sales doubled to 600,000 units. A total of 26.3 million vehicles were sold in the People’s Republic last year (up 3.8 percent), of which nearly 21.5 million were passenger cars. Together, cars with alternative drive systems, known in China as New Energy Vehicles (NEV), accounted for a good 15 percent of all passenger cars sold. It is estimated that China accounts for 60 percent of all global NEV sales, according to Nikkei Asia.
Polestar reaches sales target
The Chinese-Swedish joint project Polestar also reported positive sales figures. The Geely and Volvo company sold 29,000 vehicles worldwide last year and is now active in 19 countries, as reported by the specialist portal Electrive. The company plans to expand into additional markets this year. In Germany, however, the brand has so far sold only a few hundred cars per month. nib
Autoindustrie
Allegations against Xiaomi: German investigation reports nothing suspicious
The German Federal Office for Information Security (BSI) spent months examining several devices from the Chinese provider Xiaomi. In response to a query from Europe.Table, the federal IT security authority has now announced that the investigation “did not reveal any anomalies” that would require “further investigations or other measures.”
Xiaomi had come under suspicion when an investigation by the Lithuanian IT security authority NCSC discovered a software module in a consumer device that allegedly detected and censored certain words that were undesirable in China – without being noticed by the user. The BSI investigation was apparently unable to reproduce this behavior: “In particular, the BSI was unable to detect a transfer of filter lists, as described in the original report,” a BSI spokesperson announced. At the same time, he emphasized that this result referred specifically to the investigation conducted in Germany. The German authority thus avoids passing judgment on the findings of its Lithuanian colleagues.
Relations between China and Lithuania are currently extremely difficult. Most recently, the small EU member state in the Baltic region received demonstrative support from Taiwan. Falk Steiner
Geopolitics
Lithuania
Technology
Xiaomi
Millions of migrant workers’ children separated from parents
More than half of all children of migrant workers of school age in China live separated from their parents. This is the result of a report by the Chinese aid organization New Citizen Program, quoted by the business portal Caixin. Among 6 to 14-year-old children of migrant workers, 26.7 million grow up without a mother or father. Instead, relatives and sometimes neighbors take care of the children. Their parents have mostly migrated to large cities to work there.
Only 20 million children have accompanied their parents to the cities. The problem is that migrant worker have fewer rights than their fellow citizens. The household registration (hukou) system differentiates between urban and rural registered households. Migrant workers suffer from lower social security in cities.
For example, access to public schools in cities is much more difficult for their children. With considerable consequences: “The educational level of migrant children is declining,” says the general director of the New Citizen Program. At China’s universities, they make up only 2.4 percent of all applicants. Butmigrant childrenmake up about 40 percent of all children in the country.
Education is also often below average in the children’s hometowns. Scientists warn that educational disparities could jeopardize China’s future growth. Children in rural areas are simply not learning the skills needed to compete in the labor market of the future, research findings show (China.Table reported).
China’s State Council, therefore, plans to attract more and better teachers to China’s rural areas, according to consulting agency Trivium China. “China has a considerable head start in manpower and their education largely depends on teachers in rural areas,” Premier Li Keqiang said. nib
Education
Hukou
Society
Is a diplomatic conflict brewing over China’s embassy in London?
The relocation of the Chinese Embassy in London could spark a diplomatic conflict. Councilors in the borough of Tower Hamlets have decided to name adjacent streets and buildings of the new Chinese embassy after regions where massive repression and human rights abuses by the Chinese Communist Party have been reported. Proposed names include Tiananmen Square, Uyghur Court, Hong Kong Road, and Tibet Hill. The renaming is intended to reaffirm “support for the freedom and diversity of our borough,” the council said.
The initiator is Rahima Mahmut, a singer of Uyghur origin, who presented her request to the district council. In the autonomous Chinese region of Xinjiang, around one million Uyghurs are being forcefully detained in internment camps. China does not deny the existence of the camps but speaks of training centers for vocational education.
The possible renaming is “a symbol,” Mahmut told local news portal MyLondon. She emigrated from the People’s Republic of China about two decades ago. However, it took three years before the Chinese authorities issued her a passport, she said. grz
Geopolitics
Tiananmen-Massaker
Uyghurs
Xinjiang
Tools
A close reading of China’s new cybersecurity review measures
By Zoey Zhang, Dezan Shira & Associates
Several revisions in China’s updated Cybersecurity Review Measures, in effect from February 15, 2022, focus on risks associated with data processing activities and the data security risks arising from Chinese entities listing overseas.
Under the new Measures, network platform companies with access to the personal information of more than one million users will need to apply for a cybersecurity review before listing abroad. A reading of the language of the new Measures has resulted in industry experts assuming that the geographical scope of “foreign listings” does not include Hong Kong. If this understanding is correct, the Measures could shift more Chinese companies towards Hong Kong IPOs to avoid potential reviews.
On January 4, the first working day of 2022, the Cyberspace Administration of China (CAC), in conjunction with 12 other authorities – including the China Securities Regulatory Commission (CSRC) – finally promulgated the high-profile Cybersecurity Review Measures (hereafter the “Measures”). The new Measures, which will come into force from February 15, 2022, spell out:
the legal basis
the scope of application,
government bodies in charge
content and
procedures for cybersecurity review.
Core statements of the cybersecurity law
The Measures will subject two main groups – critical information infrastructure (CII) operators as well as network platform operators – to a cybersecurity review, under the following circumstances:
For CII operators, if they purchase network products and services, which affects or may affect national security.
For network platform operators, if they conduct data processing activity, which affects or may affect national security; or if they hold personal information of more than one million users and plan to list their shares overseas.
The CAC began revising the Cybersecurity Review Measures on July 10, 2021, days after the announcement of the investigation into the ride-hailing firm DiDi Chuxing.
The revision was to supersede the original Measures that were effective from June 1, 2020, which focused on reviews of the procurement of ICT (information communication technology) equipment and services by CII operations – in other words, CII supply chain reviews. With a new aim to protect cybersecurity and data security, the draft revision started incorporating data processing activities and foreign IPOs into the scope of review, which in part echoed the Data Security Law (DSL) adopted on June 10, 2021.
What’s new in the 2021 Measures?
Compared with the original file, the 2021 Cybersecurity Review Measures have made the following amendments:
It adds the DSL and the Regulation on the Security and Protection of CII, both effective from September 1, 2021, as the legal basis of the Measures.
It incorporates data processing activities implicating national security into the scope of review. (According to the DSL, “data processing” includes the collection, storage, use, processing, transmission, availability, and disclosure of data, etc.)
It incorporates foreign listings by internet platform operators with data of more than one million users into the scope of review. Besides, IPO materials (like prospectuses) are required to be submitted when applying for the cybersecurity review.
It adds the CSRC as a member under the cybersecurity review working mechanism.
It improves the factors for the assessment of national security.
It extends the reviewing time for the special review process to 90 working days.
Will Hong Kong IPOs be exempt from cybersecurity reviews?
Among all the changes, the newly added Article 7 of the revamped Measures has attracted most attention. It stipulates that:
“Where any network platform operator who possesses the personal information of more than one million users seeks foreign listings (“国外上市”), it shall file an application with the Office of Cybersecurity Review for cybersecurity review.”
As the draft and final versions of the measures both use the term “foreign listings” (“国外上市”), instead of “offshore listings” (“境外上市”) – the former term is often interpreted as listing outside of China, like in the US, and excluding listing in Hong Kong, while the latter term would include Hong Kong, many lawyers and bankers speculate the wording indicates that mainland companies pursuing IPOs in Hong Kong may be exempt from the cybersecurity review process.
Such discussion took place in November when the CAC issued a draft of the Network Data Security Management Regulation. The regulation specifically mentioned Hong Kong listings as requiring special vetting if they involve matters of national security, and separated Hong Kong listings from foreign listings in two perspective items.
According to Caixin’s report citing several lawyers involved in Hong Kong IPOs, “the city’s bourse recently started to ask mainland companies whether they could be subject to cybersecurity reviews. The inquiries have extended to non-Internet companies. At the moment, companies are required only to submit a legal document drawn up by mainland lawyers outlining the likelihood of a cybersecurity review.”
China’s cybersecurity review process
The Office of Cybersecurity Review (OCR), a subordinate office under the CAC, will entrust the China Cybersecurity Review Technology and Certification Center (CCRC) to conduct the review, the CAC said in a press conference.
The CCRC will undertake the tasks of receiving the filing materials and conducting formal examination of the submissions under the guidance of the OCR. The CCRC will also set up a window for cybersecurity review consultation.
Network platform operators holding data of more than one million users are required to proactively apply to the OCR for a security review before they apply to foreign securities regulators to list. Operators voluntarily filing an application for cybersecurity review should submit the following materials:
A written declaration;
An analysis report concerning the impact or possible impact on national security;
The procurement document, agreement, contract to be entered into, or IPO materials to be submitted, etc.; and
Other materials necessary for cybersecurity reviews.
When members under the cybersecurity review working mechanism deem a network product or service or a data processing activity as affecting or potentially affecting national security, the OCR can also report to the CCRC for approval and initiate a cybersecurity review in accordance with the Measures.
The reviewing time and process
Upon receipt of the submitted materials, the OCR will, within 10 working days, determine whether the review is required and notify the operator in writing.
If the OCR deems it as necessary to conduct a cybersecurity review, it will complete the preliminary review within 30 working days from the date of issuing the written notice.
If the case is complicated, the said time may be extended by 15 working days.
When conducting the preliminary review, the OCR will formulate review findings and suggestions and send them to members of the cybersecurity review working mechanism and other relevant authorities for comments. Members of the cybersecurity review working mechanism and relevant authorities will give a written reply within 15 working days upon receipt of the review findings and suggestions.
If members of the cybersecurity review working mechanism have conflicting opinions, the case will be handled through a special review procedure, which should be completed within 90 working days in general and may be extended if the case is complicated.
In aggregate, the general review process takes up to 70 working days from the start of the application. For the special review process, the maximum reviewing time required can be more than 160 working days, or more than eight months.
How will China assess for national security risks?
When carrying out the cybersecurity review, the OCR will focus on the assessment of national security risks that may be brought about by procurement activities, data processing activities, and overseas listing. The following factors are taken into account (the last three items are newly added, zeroing in on protecting core or important data and personal information):
Risks of illegal control, interference, or destruction of CII brought about by the use of products and services;
The harm caused by supply interruption of products and services to the business continuity of CII;
Security, openness, transparency, and diversity of sources of products and services, reliability of supply channels, and risks of supply interruption due to political, diplomatic, trade, or other factors;
Information on compliance with Chinese laws, administrative regulations, and departmental rules by product and service providers;
Risks of theft, disclosure, damage, illegal use, or cross-border transfer of core data, important data or large amounts of personal information (newly added);
Risks of influence, control, or malicious use of critical information infrastructure, core data, important data, or large amounts of personal information by foreign governments after overseas listing (newly added); and
Other factors that may endanger CII, cybersecurity, and national data security (newly added).
Looking forward
Most revisions in the new Cybersecurity Review Measures relate to risks associated with data processing activities. It also emphasizes the data security risks arising from Chinese market entities listed overseas, which reflects China’s growing concerns that foreign regulators could gain access to sensitive data from Chinese entities listed on foreign stock markets, particularly in the US.
In the mid- to long-term, mainland companies, especially those whose businesses impact cybersecurity, data security, and are subject to foreign investment restriction, will face a stringent review process when seeking offshore listings.
The practical processes are still a black box for many companies, and even a conundrum for officials, as it will not be easy to secure the data without compromising the potential economic loss caused by data blocking. Thus, more detailed rules and guidelines can be expected along with the implementation of the new Cybersecurity Review Measures. Presently, it may very well be that many mainland companies hold out their IPO plans, shift towards Hong Kong IPOs, or navigate a route that does not trigger cybersecurity or data security red flags.
This article first appeared in Asia Briefing, published by Dezan Shira Associates. It advises international investors in Asia and has offices in China, Hong Kong, Indonesia, Singapore, Russia, and Vietnam.
CSRC
Cybersecurity
Market
Executive Moves
Ferdinando Sorrentino is to become the new head of automotive supplier SEG Automotive, based in Stuttgart, Germany. Sorrentino succeeds Peter Sokol and Frank-Lorenz Dietz, who have left the company. He is to increase the market presence in China.
Daniel Zhang Yong has resigned from the supervisory board of Weibo. The CEO of Alibaba Group Holding had also left the supervisory board of ride-hailing company Didi Chuxing just a few days ago.
Dessert
Part of the Harbin Snow Festival is the sculpture competition. The pieces are not as huge as the professionally built ice palaces of the main attraction. Instead, they are lovingly cut and scraped by hand from snow blocks. But will the shark eat up the competition? The large smooth surfaces are rather easy to make compared to the finely chiseled portraits of famous people and replicas of famous buildings.
German security authority acquits Xiaomi smartphones
Half of migrant worker children grow up without parents
‘Tibet Hill’? Dispute over street names around London embassy
Tools: What does cyber law mean for businesses?
Dear reader,
The official religious communities in China are cooperation partners of the government. That is no surprise. After all, Christian CP organizations were founded on Mao’s behest to eliminate any spiritual competition for his ideology. This still works today. Pictures of Xi Jinping are more prominently placed in state churches than those of Jesus.
Nevertheless, Christianity has found its own profile in China. Hong Kong, on the other hand, still has thriving Christian communities dating back to British times. The city’s recently inaugurated Catholic bishop thus occupies a key role for Chinese Christians. Fabian Peltsch’s analysis looks at the current state of Christianity in China and the challenges of the new bishop who finds himself between deeply devout communities and an unsympathetic government.
Religion is not exactly the specialty of the atheist CP leadership. It is more proficient in industrial development. China is already so far advanced in this regard that even the Americans come knocking looking for expertise – in autonomous driving, for example. Google’s sister company Waymo is teaming up with Geely subsidiary Zeekr. As a testing ground, China has the advantage that autonomous cars can gain field experience in the harsh conditions of everyday life, analyzes Frank Sieren.
It took Stephen Chow Sau-yan months of consideration in prayer before accepting the post of bishop of Hong Kong. “I didn’t feel the call in myself to be bishop,” the 62-year-old explained in a press conference. In the end, it was a handwritten letter from Pope Francis that convinced the Jesuit. “The Holy Father wrote something in his handwriting that he believed I should be the bishop … and so, for me, this was a sign.”
The Hong Kong-born cleric, who trained as a psychologist in the United States, now has the difficult task to build “a bridge between the government and the Church in HK, and between the Catholic Church, fellow Christian denominations, and other religions,” he said in his inaugural speech in December. Just over 12 percent of the city’s citizens identify as Christian. Schools, universities, and social institutions often have a Christian background.
The political turmoil in Hong Kong has left deep cracks within the Christian community. “The political situation is causing great uncertainty among Christians,” said Pastor Tim Buechsel in an interview with China.Table. The German-American has been working for the Vine Church in Wanchai District since 2018. Many church members have fled the city, he says. The Vine Church still had 2,500 members at the end of 2019. Now there are some 1,300 left. A considerable proportion fears that they will soon no longer be able to practice their faith freely under the growing influence of the Chinese Communist Party.
Charity also quickly reaches its limits in today’s heated political atmosphere. Often, there are even conflicts within families over political disagreements. “The mood is explosive. Parents no longer talk to their children and vice versa,” the pastor said. Despite dwindling numbers of members in his community, some new believers have even joined, “because many people no longer feel understood in their existing social spheres”.
Christians among protesters and government
The schism within families reflects the city’s political fronts. Many members of Hong Kong’s protest movement are devout Christians, including its leaders such as Joshua Wong, Agnes Chow, and Benny Tai, who have repeatedly cited their faith as an inspiration for their political commitment. A study by the city’s University Grants Committee found that nearly 25 percent of Hong Kong’s students are Christians. One of their main protest songs was “Sing Hallelujah to the Lord.”
And even Carrie Lam, the head of government who is loyal to Beijing, is also a follower of Catholicism, as was her predecessor Donald Tsang. Although some Hong Kong protesters find inspiration in Dietrich Bonhoeffer, a Christian resister who was murdered in a concentration camp, the Hong Kong protest movement is by no means an “us against them” in the shade of the cross.
The church’s continued weighty role in Hong Kong’s social life is a legacy of British colonial rule, as Buechsel explains. “Because the British could not cater to certain needs, or perhaps even deliberately refused to, Christian organizations filled these gaps, especially during times when many refugees arrived in Hong Kong.” Today, his congregation has an average age of 30. Worship services and home groups are held in English, Cantonese, or Mandarin.
Uncertain future for practiced faith
It is uncertain what the future holds for the Christian church in Hong Kong. For Hong Kong Christians, the big challenge in the coming years is a rapidly changing political situation. “That might mean we have to find new ways of dealing with reality,” Buechsel says. The 43-year-old points to mainland China. Between 40 and 120 million Christians live there, according to estimates. However, churches there are under strict state supervision. China has its official state church, congregations of people with foreign passports, and many underground churches.
Because the former dictator Mao Zedong did not tolerate any authority besides himself, the party had an official Chinese state church founded as early as the 1950s, which today has a Protestant and a Catholic branch. The Chinese Patriotic Catholic Association (CPA) and the Three-Self Patriotic Movement consider themselves to be Christian cooperation partners of the government. Portraits of the great chairman are emblazoned on their premises. Today, pictures of Xi Jinping are often placed more prominently than those of Jesus and his apostles.
The underground church, on the other hand, which still swears allegiance to the pope and holds its services in private, operates in a gray area and is more or less tolerated depending on the political climate. More than two-thirds of Chinese Christians belong to this group. Since Xi’s inauguration, the situation for China’s believers has deteriorated considerably, explains Thomas Mueller of Open Doors, an international aid organization that advocates for Christians in more than 70 countries around the world. “The gray area that used to exist has shrunk considerably if it still exists at all. This became particularly noticeable in 2018.”
Fear of “Chinese” conditions
In the past, the party published a white paper calling on all religions to “submit to and serve the interests of the state and the Chinese people “. The rules by which clergy are selected were tightened, as were the rules they had to obey in their daily work. In December 2021, another strict set of regulations on the use of the Internet for religious organizations was introduced – “a medium that is particularly important in times of pandemic,” Müller explains. They will come into force in March.
Even in the state churches, which “continue to faithfully proclaim the Christian message,” ideological pressure has once again increased “to the point of coercion.” Pastors would be compelled to praise the Communist Party and its policies, for example, in fighting the pandemic. Others must submit their sermons in advance for review. “Therefore, there are also repeated reports that Christians are seeking the way (…) into underground churches,” says the analyst of the Christian aid organization.
The Vatican has not yetfound aclear strategy on how to deal with the situation in China. “One of the most difficult issues in recent decades has been the appointment of bishops, a right that the Vatican claims worldwide,” Mueller explains. “Consequently, some bishops were abducted and placed under house arrest by the Communist Party. Conversely, there are bishops appointed by the party but not approved by the Vatican.”
Vatican concessions to Beijing
In an attempt to liberate Chinese Christians from the gray area and thus perhaps convert more Chinese, Pope Francis has already officially recognized eight bishops of the state church. It’s a concession that didn’t quite work out, Mueller notes. The agreement has also been used by the Communist Party to increase calls for underground churches to join the CPA. But many Chinese Catholics who remain loyal to the Vatican reject this call.
The new Hong Kong bishop Stephen Chow must now also balance on this fine line. For three years, the Vatican had been searching for a suitable candidate with enough tact and sensitivity for the task. Cardinal Joseph Zen, one of Chow’s predecessors, is still one of Beijing’s harshest critics. And in recent years, Chow has also participated in events such as the Tiananmen commemorations in Hong Kong on June 4. Since the introduction of the Security Law in 2020, such participation has been punishable in the city.
Since taking office, however, he has chosen diplomatic words: “God who wants us to be united,” he wrote in an essay in December. “We hope to have dialogue and develop better understanding.” He said he sees himself in the role of “a bridge” in this effort: “Being a bridge, in a sense, entails bearing the burden. My words may not cater to both sides, but at least, it brings people from the two sides to come together in the middle. Otherwise, there is no future for society. My role is to act as a bridge.”
Geely brand Zeekr and Google subsidiary Waymo are planning to launch an all-electric, autonomous car. The first released images show a minivan with sliding doors that open in opposite directions and a large lidar radar system on the roof. A steering wheel and exterior and rearview mirrors are not present, at least in the concept. A human driver, who would require these, is said to no longer be necessary.
Instead, the car has a central screen that can communicate with its passengers via voice control. According to Zeekr, however, customers can fully customize the cabin. The spacious e-minivan will be used primarily in the USA as a ride-hailing vehicle for Waymo.
It has not yet been announced where the still unnamed model will be manufactured. According to Zeekr, the vehicle will be designed at its China Europe Vehicle Technology Center in Gothenburg, Sweden. It will be designed in Sweden because the designers of sister brand Volvo are also located there. The technology is to be based on a new Geely platform that follows an “open source” concept.
Mutual assistance
Zeekr CEO Andy An says the strategic partnership with Waymo and shipping of vehicles helps “share our experience, ideals and provide our expertise in collaborating on a fully electric vehicle.”
Zeekr, the Geely Group’s new EV brand, just began the production of its Model 001 last October. Its models will be built based on Geely’s SEA (Sustainable Experience Architecture) electric platform, unveiled in September 2020, which develops in-house battery and electric drive technologies.
Geely founder Li Shufu, who is also the largest single shareholder in Daimler, wants to establish Zeekr as a hip lifestyle brand. The 001, which is based on sleek Porsche shapes, was also designed at the design center in Gothenburg. “Chinese carmaker Geely plans to attack American electric carmaker Tesla head-on,” writes the German automobile magazine Auto, Motor, Sport.
Waymo is responsible for the development of autonomous cars in Google’s parent company Alphabet. Waymo has so far been testing its driverless vehicles without backup drivers mainly in California and Arizona. Like Tesla, however, the company wants to get its foot in the door in China. Waymo’s autonomous vehicle division has already registered a company in Shanghai called Huimo Business Consulting. “Huimo” is not only the word for Waymo but translates to “emblem” in Mandarin.
If not a search engine, then at least mobility
Google was not allowed to and did not want to establish its search engine in China. The situation is different for autonomous vehicles. The People’s Republic is not only the largest automotive market in the world but also the most important test field for autonomous vehicles alongside the USA. Since 2019, the number of test projects for autonomous cars on Chinese roads has more than doubled. No other country develops as many software-supported automobiles as China. Huge pools of data are generated in China’s often chaotic traffic. These, in turn, are the fuel for progress and improvements in the entire autonomous vehicle industry.
For a long time, Waymo was the leader when it came to autonomous driving. But in the meantime, the Americans have been overtaken by Chinese specialists for self-driving cars. For example, by Auto X from Shenzhen. The first production plant for Level 4 autonomous cabs opened last December.
These cars have already been on the road for a year in the 168-square-kilometer Pingshan district in heavy everyday traffic. Waymo, on the other hand, still has drivers behind the wheel, for example in “during inclement weather,” as a Waymo spokeswoman confirms. However, passengers receive this message on their app even when the sun is shining. Auto X has long since left this stage. Moreover, the traffic in Shenzhen is much heavier than in Phoenix.
The Chinese government is promoting autonomous driving, for example by equipping the public road network with the necessary infrastructure. The expansion of the 5G network is intended to accelerate the high-speed transmission of data between cars and traffic systems. The USA is also lagging behind in this area.
Autonomous driving: the state is applying pressure
The long-term goal here, too, is of course expansion overseas: As with e-mobility, China also wants to set global standards in autonomous driving as a market leader right from the start. According to the development strategy for “smart vehicles” published by the National Development and Reform Commission in February 2020, China is aiming for mass production of Level 3 autonomous vehicles by 2025. Level 3 autonomous driving allows vehicles to take full control in certain situations, such as when parking or changing lanes. Auto X is already a step ahead. Waymo is also working with Geely to now ramp up its development with Chinese know-how.
In addition to Waymo, General Motors is also investing in self-driving technology in China. The US automaker has invested around $300 million in the Beijing EV startup Momenta. Momenta, in turn, has set up a joint venture with BYD to deploy autonomous driving functions in BYD cars. In China, however, search engine provider Baidu is so far the leader in the field of autonomous cars.
Baidu has been testing its Apollo Go robot cabs in Beijing since October – without a driver behind the wheel, but like Waymo with security personnel on board for emergencies. There are currently 67 self-driving cars being operated in the Yizhuang district on the outskirts of Beijing. Baidu CEO Robin Li wants to expand his Apollo Go robot cab service to 65 cities by 2025 and 100 cities by 2030. All manufacturers are already eyeing Level 5 automation. This is the level at which the car can drive autonomously under all conceivable conditions. The US magazine Automotive World assumes that this level will only be achieved if the major players join forces. The cooperation between Waymo and Geely is the first step in this direction.
Autoindustrie
News
VW temporarily closes Tianjin plant due to Covid
Volkswagen hastemporarily shut down itsplant in Tianjin because of a Covid outbreak among its workforce. The car factory in northern China, located about 100 kilometers from the capital Beijing, had already suspended operations earlier in the week after employees contracted the virus, a spokesman said Thursday. On Wednesday, 41 cases of domestically transmitted infections with confirmed symptoms were reported after 33 were reported the day before, according to data from the National Health Commission.
At the site, VW operates a component plant and a plant for automatic transmission in cooperation with its Chinese partner FAW. It is said that both plants had tested all employees twice this week and were now waiting for the results. The hope is to resume production soon and make up for the lost time. Volkswagen has had to temporarily halt production at several sites in China since the pandemic broke out two years ago.
BDI expects continued supply chain problems due to Covid
The Federation of German Industries (BDI) continues to expect supply chain problems stemming from the Covid pandemic in 2022. Although the order books of industrial companies in Germany are full, missing or late deliveries of raw materials and base material could disrupt production. The worst is probably over in the automotive industry, but other sectors reportedly expect issues until the end of the year. “These bottlenecks will slow down industrial value creation by more than €50 billion in each of 2021 and 2022,” BDI President Siegfried Russwurm said in Berlin on Thursday. Despite these constraints, the association expects economic growth of 3.5 percent for 2022, and exports could even increase by four percent.
Meanwhile, two Omicron caseshave beenreported in the Chinese port city of Dalian. Students returning from a visit to Tianjin had infected themselves. Dalian is the second major port city in China with confirmed Omicron cases after Tianjin. Its ports are among the twenty largest in the world, Bloomberg reports. Major companies such as Volkswagen, Toyota, and Airbus have factories in the cities. Toyota also had to shut down its assembly lines.
In addition, there are reports that container ships are avoiding the port in Ningbo and heading to Shanghai instead. Delays had occurred in Ningbodue to Covid infections affecting truck traffic to the port. Accordingly, this caused traffic jams outside the port of Shanghai. Schedules for container ships will be delayed by about a week, freight forwarders told Bloomberg. The delays could spread to the US and Europe, as they did last year. nib/rtr
Autoindustrie
EV market grows rapidly
Last year, 2.9 million battery-electric vehicles were sold in China, including 2.73 million passenger cars. That marks a 160 percent increase over the previous year, according to new data from the China Association of Automobile Manufacturers. Plug-in hybrid sales doubled to 600,000 units. A total of 26.3 million vehicles were sold in the People’s Republic last year (up 3.8 percent), of which nearly 21.5 million were passenger cars. Together, cars with alternative drive systems, known in China as New Energy Vehicles (NEV), accounted for a good 15 percent of all passenger cars sold. It is estimated that China accounts for 60 percent of all global NEV sales, according to Nikkei Asia.
Polestar reaches sales target
The Chinese-Swedish joint project Polestar also reported positive sales figures. The Geely and Volvo company sold 29,000 vehicles worldwide last year and is now active in 19 countries, as reported by the specialist portal Electrive. The company plans to expand into additional markets this year. In Germany, however, the brand has so far sold only a few hundred cars per month. nib
Autoindustrie
Allegations against Xiaomi: German investigation reports nothing suspicious
The German Federal Office for Information Security (BSI) spent months examining several devices from the Chinese provider Xiaomi. In response to a query from Europe.Table, the federal IT security authority has now announced that the investigation “did not reveal any anomalies” that would require “further investigations or other measures.”
Xiaomi had come under suspicion when an investigation by the Lithuanian IT security authority NCSC discovered a software module in a consumer device that allegedly detected and censored certain words that were undesirable in China – without being noticed by the user. The BSI investigation was apparently unable to reproduce this behavior: “In particular, the BSI was unable to detect a transfer of filter lists, as described in the original report,” a BSI spokesperson announced. At the same time, he emphasized that this result referred specifically to the investigation conducted in Germany. The German authority thus avoids passing judgment on the findings of its Lithuanian colleagues.
Relations between China and Lithuania are currently extremely difficult. Most recently, the small EU member state in the Baltic region received demonstrative support from Taiwan. Falk Steiner
Geopolitics
Lithuania
Technology
Xiaomi
Millions of migrant workers’ children separated from parents
More than half of all children of migrant workers of school age in China live separated from their parents. This is the result of a report by the Chinese aid organization New Citizen Program, quoted by the business portal Caixin. Among 6 to 14-year-old children of migrant workers, 26.7 million grow up without a mother or father. Instead, relatives and sometimes neighbors take care of the children. Their parents have mostly migrated to large cities to work there.
Only 20 million children have accompanied their parents to the cities. The problem is that migrant worker have fewer rights than their fellow citizens. The household registration (hukou) system differentiates between urban and rural registered households. Migrant workers suffer from lower social security in cities.
For example, access to public schools in cities is much more difficult for their children. With considerable consequences: “The educational level of migrant children is declining,” says the general director of the New Citizen Program. At China’s universities, they make up only 2.4 percent of all applicants. Butmigrant childrenmake up about 40 percent of all children in the country.
Education is also often below average in the children’s hometowns. Scientists warn that educational disparities could jeopardize China’s future growth. Children in rural areas are simply not learning the skills needed to compete in the labor market of the future, research findings show (China.Table reported).
China’s State Council, therefore, plans to attract more and better teachers to China’s rural areas, according to consulting agency Trivium China. “China has a considerable head start in manpower and their education largely depends on teachers in rural areas,” Premier Li Keqiang said. nib
Education
Hukou
Society
Is a diplomatic conflict brewing over China’s embassy in London?
The relocation of the Chinese Embassy in London could spark a diplomatic conflict. Councilors in the borough of Tower Hamlets have decided to name adjacent streets and buildings of the new Chinese embassy after regions where massive repression and human rights abuses by the Chinese Communist Party have been reported. Proposed names include Tiananmen Square, Uyghur Court, Hong Kong Road, and Tibet Hill. The renaming is intended to reaffirm “support for the freedom and diversity of our borough,” the council said.
The initiator is Rahima Mahmut, a singer of Uyghur origin, who presented her request to the district council. In the autonomous Chinese region of Xinjiang, around one million Uyghurs are being forcefully detained in internment camps. China does not deny the existence of the camps but speaks of training centers for vocational education.
The possible renaming is “a symbol,” Mahmut told local news portal MyLondon. She emigrated from the People’s Republic of China about two decades ago. However, it took three years before the Chinese authorities issued her a passport, she said. grz
Geopolitics
Tiananmen-Massaker
Uyghurs
Xinjiang
Tools
A close reading of China’s new cybersecurity review measures
By Zoey Zhang, Dezan Shira & Associates
Several revisions in China’s updated Cybersecurity Review Measures, in effect from February 15, 2022, focus on risks associated with data processing activities and the data security risks arising from Chinese entities listing overseas.
Under the new Measures, network platform companies with access to the personal information of more than one million users will need to apply for a cybersecurity review before listing abroad. A reading of the language of the new Measures has resulted in industry experts assuming that the geographical scope of “foreign listings” does not include Hong Kong. If this understanding is correct, the Measures could shift more Chinese companies towards Hong Kong IPOs to avoid potential reviews.
On January 4, the first working day of 2022, the Cyberspace Administration of China (CAC), in conjunction with 12 other authorities – including the China Securities Regulatory Commission (CSRC) – finally promulgated the high-profile Cybersecurity Review Measures (hereafter the “Measures”). The new Measures, which will come into force from February 15, 2022, spell out:
the legal basis
the scope of application,
government bodies in charge
content and
procedures for cybersecurity review.
Core statements of the cybersecurity law
The Measures will subject two main groups – critical information infrastructure (CII) operators as well as network platform operators – to a cybersecurity review, under the following circumstances:
For CII operators, if they purchase network products and services, which affects or may affect national security.
For network platform operators, if they conduct data processing activity, which affects or may affect national security; or if they hold personal information of more than one million users and plan to list their shares overseas.
The CAC began revising the Cybersecurity Review Measures on July 10, 2021, days after the announcement of the investigation into the ride-hailing firm DiDi Chuxing.
The revision was to supersede the original Measures that were effective from June 1, 2020, which focused on reviews of the procurement of ICT (information communication technology) equipment and services by CII operations – in other words, CII supply chain reviews. With a new aim to protect cybersecurity and data security, the draft revision started incorporating data processing activities and foreign IPOs into the scope of review, which in part echoed the Data Security Law (DSL) adopted on June 10, 2021.
What’s new in the 2021 Measures?
Compared with the original file, the 2021 Cybersecurity Review Measures have made the following amendments:
It adds the DSL and the Regulation on the Security and Protection of CII, both effective from September 1, 2021, as the legal basis of the Measures.
It incorporates data processing activities implicating national security into the scope of review. (According to the DSL, “data processing” includes the collection, storage, use, processing, transmission, availability, and disclosure of data, etc.)
It incorporates foreign listings by internet platform operators with data of more than one million users into the scope of review. Besides, IPO materials (like prospectuses) are required to be submitted when applying for the cybersecurity review.
It adds the CSRC as a member under the cybersecurity review working mechanism.
It improves the factors for the assessment of national security.
It extends the reviewing time for the special review process to 90 working days.
Will Hong Kong IPOs be exempt from cybersecurity reviews?
Among all the changes, the newly added Article 7 of the revamped Measures has attracted most attention. It stipulates that:
“Where any network platform operator who possesses the personal information of more than one million users seeks foreign listings (“国外上市”), it shall file an application with the Office of Cybersecurity Review for cybersecurity review.”
As the draft and final versions of the measures both use the term “foreign listings” (“国外上市”), instead of “offshore listings” (“境外上市”) – the former term is often interpreted as listing outside of China, like in the US, and excluding listing in Hong Kong, while the latter term would include Hong Kong, many lawyers and bankers speculate the wording indicates that mainland companies pursuing IPOs in Hong Kong may be exempt from the cybersecurity review process.
Such discussion took place in November when the CAC issued a draft of the Network Data Security Management Regulation. The regulation specifically mentioned Hong Kong listings as requiring special vetting if they involve matters of national security, and separated Hong Kong listings from foreign listings in two perspective items.
According to Caixin’s report citing several lawyers involved in Hong Kong IPOs, “the city’s bourse recently started to ask mainland companies whether they could be subject to cybersecurity reviews. The inquiries have extended to non-Internet companies. At the moment, companies are required only to submit a legal document drawn up by mainland lawyers outlining the likelihood of a cybersecurity review.”
China’s cybersecurity review process
The Office of Cybersecurity Review (OCR), a subordinate office under the CAC, will entrust the China Cybersecurity Review Technology and Certification Center (CCRC) to conduct the review, the CAC said in a press conference.
The CCRC will undertake the tasks of receiving the filing materials and conducting formal examination of the submissions under the guidance of the OCR. The CCRC will also set up a window for cybersecurity review consultation.
Network platform operators holding data of more than one million users are required to proactively apply to the OCR for a security review before they apply to foreign securities regulators to list. Operators voluntarily filing an application for cybersecurity review should submit the following materials:
A written declaration;
An analysis report concerning the impact or possible impact on national security;
The procurement document, agreement, contract to be entered into, or IPO materials to be submitted, etc.; and
Other materials necessary for cybersecurity reviews.
When members under the cybersecurity review working mechanism deem a network product or service or a data processing activity as affecting or potentially affecting national security, the OCR can also report to the CCRC for approval and initiate a cybersecurity review in accordance with the Measures.
The reviewing time and process
Upon receipt of the submitted materials, the OCR will, within 10 working days, determine whether the review is required and notify the operator in writing.
If the OCR deems it as necessary to conduct a cybersecurity review, it will complete the preliminary review within 30 working days from the date of issuing the written notice.
If the case is complicated, the said time may be extended by 15 working days.
When conducting the preliminary review, the OCR will formulate review findings and suggestions and send them to members of the cybersecurity review working mechanism and other relevant authorities for comments. Members of the cybersecurity review working mechanism and relevant authorities will give a written reply within 15 working days upon receipt of the review findings and suggestions.
If members of the cybersecurity review working mechanism have conflicting opinions, the case will be handled through a special review procedure, which should be completed within 90 working days in general and may be extended if the case is complicated.
In aggregate, the general review process takes up to 70 working days from the start of the application. For the special review process, the maximum reviewing time required can be more than 160 working days, or more than eight months.
How will China assess for national security risks?
When carrying out the cybersecurity review, the OCR will focus on the assessment of national security risks that may be brought about by procurement activities, data processing activities, and overseas listing. The following factors are taken into account (the last three items are newly added, zeroing in on protecting core or important data and personal information):
Risks of illegal control, interference, or destruction of CII brought about by the use of products and services;
The harm caused by supply interruption of products and services to the business continuity of CII;
Security, openness, transparency, and diversity of sources of products and services, reliability of supply channels, and risks of supply interruption due to political, diplomatic, trade, or other factors;
Information on compliance with Chinese laws, administrative regulations, and departmental rules by product and service providers;
Risks of theft, disclosure, damage, illegal use, or cross-border transfer of core data, important data or large amounts of personal information (newly added);
Risks of influence, control, or malicious use of critical information infrastructure, core data, important data, or large amounts of personal information by foreign governments after overseas listing (newly added); and
Other factors that may endanger CII, cybersecurity, and national data security (newly added).
Looking forward
Most revisions in the new Cybersecurity Review Measures relate to risks associated with data processing activities. It also emphasizes the data security risks arising from Chinese market entities listed overseas, which reflects China’s growing concerns that foreign regulators could gain access to sensitive data from Chinese entities listed on foreign stock markets, particularly in the US.
In the mid- to long-term, mainland companies, especially those whose businesses impact cybersecurity, data security, and are subject to foreign investment restriction, will face a stringent review process when seeking offshore listings.
The practical processes are still a black box for many companies, and even a conundrum for officials, as it will not be easy to secure the data without compromising the potential economic loss caused by data blocking. Thus, more detailed rules and guidelines can be expected along with the implementation of the new Cybersecurity Review Measures. Presently, it may very well be that many mainland companies hold out their IPO plans, shift towards Hong Kong IPOs, or navigate a route that does not trigger cybersecurity or data security red flags.
This article first appeared in Asia Briefing, published by Dezan Shira Associates. It advises international investors in Asia and has offices in China, Hong Kong, Indonesia, Singapore, Russia, and Vietnam.
CSRC
Cybersecurity
Market
Executive Moves
Ferdinando Sorrentino is to become the new head of automotive supplier SEG Automotive, based in Stuttgart, Germany. Sorrentino succeeds Peter Sokol and Frank-Lorenz Dietz, who have left the company. He is to increase the market presence in China.
Daniel Zhang Yong has resigned from the supervisory board of Weibo. The CEO of Alibaba Group Holding had also left the supervisory board of ride-hailing company Didi Chuxing just a few days ago.
Dessert
Part of the Harbin Snow Festival is the sculpture competition. The pieces are not as huge as the professionally built ice palaces of the main attraction. Instead, they are lovingly cut and scraped by hand from snow blocks. But will the shark eat up the competition? The large smooth surfaces are rather easy to make compared to the finely chiseled portraits of famous people and replicas of famous buildings.
