Reed Smith Client Alerts

Key takeaways

  • Free trade zones in China spearheading pilot policies to facilitate data classification and cross-border data transfers.
  • Significant business implications for MNCs and their business operations in China.
  • Stay abreast of the regulatory developments, take necessary compliance steps and plan business operations accordingly.

On 28 September 2023, the Cyberspace Administration of China (CAC) released the draft Provisions on Regulating and Promoting Transborder Data Flow for comments, with the aim of easing regulatory requirements for cross-border data transfers and enhancing the business environment. Within the draft provisions, the free trade zones (FTZs) are empowered to formulate and adopt local preferential policies for companies within their respective jurisdictions.

Recent, significant developments in the FTZs of Shanghai, Beijing and Tianjin have positioned them at the forefront in China in this regard. This client alert summarises the key points of these new local developments and discusses what practical steps companies can take in response to the changes.


On 8 February 2024, the Shanghai Lingang FTZ issued the Provisional Measures for Administering Classification and Grading of Cross-Border Data Transfer (Lingang Measures), with a valid term of one year from 8 February 2024 to 7 February 2025. The full text of the Lingang Measures was not made public until 18 February. According to the Lingang Measures, the Shanghai Lingang FTZ will classify data into three categories and undertake corresponding measures:

  • Core data (prohibited from being transferred out of China).
  • Important data (can be transferred after a security assessment). The Shanghai Lingang FTZ will formulate a catalogue of important data, the cross-border transfer of which will be submitted to the Shanghai Lingang Cross-border Data Transfer Service Center for security assessment.
  • General data (freely transferable if relevant requirements are met). The Shanghai Lingang FTZ will formulate a catalogue of general data, without prejudice to national security, public interest and personal privacy. The catalogue will be updated by the Shanghai Lingang FTZ from time to time. Companies processing general data must file with the regulator so that they can transfer such general data freely, subject to the relevant conditions.