Data Localization Hampers US Companies’ Growth in China - AmCham Chairman

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American Chamber of Commerce in China Chairman James Zimmerman said that Chinese data localization requirements are preventing the growth and innovation of US companies in China because they block access to data and hamper competition.

WASHINGTON (Sputnik) — Chinese data localization requirements are preventing the growth and innovation of US companies in China because they block access to data and hamper competition, American Chamber of Commerce in China Chairman James Zimmerman said in a statement on Tuesday.

“We have to ask whether the Chinese government is willing to allow foreign companies to compete and succeed in the information and communications technology sector — as well as numerous other sectors reliant on the movement of data across borders — and thereby contribute to China achieving its innovation objectives,” Zimmerman said on Tuesday.

China began multiple policies dating back to 2010 of keeping financial and personal data, such as credit history and health records, only on its territory that is not accessible anywhere else.

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Data localization makes easier for companies to exchange and gain access to data, but Chinese requirements limit access to the data that US companies can access, according to the statement.

Zimmerman said the impact of ongoing data localization requirements is raising important questions regarding Chinese commitment to innovation strategy and goals.

“The reality is that data today is what goods were when China joined the World Trade Organization,” Zimmerman said.

“It is simply untenable to have a bilateral investment treaty between the two largest economies in the world without providing investors the guaranteed right, with very limited exceptions, to store their data and move their data globally according to business needs.”

According to the US-China Business Council, the US and China are currently negotiating a bilateral investment treaty, which sets economic rules for foreign investment in both countries. The treaty gives US investors better access to foreign markets on fairer terms.

The American Chamber of Commerce in China is a non-profit organization which represents US companies and individuals doing business in China with more than 40 industry and issue-specific forums and committees, according to their website.

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