DigiChina Digest – September 2018

This month DigiChina launches our upgraded Digest newsletter, which from now on will include exclusive new content and news tracking from Chinese-language sources on digital policy in China. The DigiChina Digest will continue to evolve and is produced in partnership with our colleagues at the Leiden Asia Centre.

Translation: Managing Privacy Risks Through Detailed Impact Assessments

China's draft "Security Impact Assessment Guide of Personal Information" is set to become a key part of the country's emerging system of laws, regulations, and standards on data privacy. This translation reveals the details of Chinese authorities' risk-based approach to estimating the severity and likelihood of incidents affecting personal information. It embeds the idea of privacy-by-design and echoes elements of the European General Data Protection Regulation (GDPR). [Read the translation.]

This month's news digest was compiled by Katharin Tai, Graham Webster, and Alessandra Jonkhout.

Personal data–handling challenges for Didi after passenger murder raises scrutiny

Didi Chuxing, China’s ride-hailing giant, attracted intense scrutiny and increased regulatory attention after a 20-year-old passenger was raped and murdered by a driver in Wenzhou, Zhejiang. In response, the company suspended late-night rides (then brought them back) and introduced new security measures.

With new regulations and measures came new questions about privacy and personal data handling. One question was how the company should share data with authorities. Southern Metropolis Daily reported that several local governments sought to link Didi data to government systems. “Entering online ride-hailing data into a government supervision platform cannot ensure 100 percent effective supervision," Jinan University Law School Professor Liu Wenjing told the paper, "but without entering it, effective supervision is all but impossible.” An unnamed lawyer, however, emphasized the amount of personal information contained in ride-hailing data and noted that government systems had suffered breaches.

At the same time, Didi faces another new data handling challenge. After the Wenzhou murder, the company began a practice of “full-ride recording,” in which audio is recorded during trips in case an incident occurs. How such recordings would be handled raised obvious privacy concerns, and the company later announced that recordings would be deleted after a week if no incident is reported.

China’s top cyberspace regulator CAC gets a new chief

On August 1, Zhuang Rongwen (庄荣文) was appointed minister of the Cyberspace Administration of China, taking over from Xu Lin. Before his recent promotion, Zhuang worked for the Overseas Chinese Affairs Office, which was merged with the United Front Work Department in March, the Central Leading Group for Cybersecurity and Informatization, and the Central Propaganda Department. In addition to this experience in parts of the government that are central to the CCP’s ideological work, Zhuang is an engineer by training.

Xi Jinping calls for international cooperation on AI policy and governance

For the opening of the World Artificial Intelligence Conference in Shanghai, President Xi Jinping sent a congratulatory letter. According to a Xinhua report, he said China is willing to cooperate to share opportunities in the digital economy. “To seize the development opportunity of AI and cope with new issues in fields including law, security, employment, ethics and governance, it requires deepened international cooperation and discussion,” Xi reportedly said.

Official media dismisses Australian, Indian security concerns about Huawei

Over the past two months, Huawei was banned from contributing to 5G networks in Australia and 5G trials in India. Japan’s is reportedly considering a ban on yet unnamed companies for government contracts. Chinese government institutions have generally been quiet on the matter, save for a Foreign Ministry spokesperson's expression of "grave[] concern" about the Australian case and formulaic responses on India and Japan.

A Xinhua commentator, however condemned the move as “ideologically motivated.” “The so-called security concerns can be solved by technical means,” Xu Haijing wrote. “Huawei had already promised that Australia could adopt measures to supervise the 5G network, including base stations, signal towers, and wireless transmission facilities. For example, the UK and Huawei jointly established a Network Security Facility.” The piece portrayed the global chain of production of telecommunications equipment as a fact of 21st century life and echoed Huawei’s denial that it is exposed to Chinese government pressure.

• Related: Despite some work with Huawei to examine equipment, the British government in July raised security concerns over Huawei’s equipment.

Vice Premier Liu He presides over first meeting of science, technology, and innovation leading group

Coinciding with a leadership shuffle at the National Science and Technology System Reform and Innovation System Construction Leading Group (国家科技体制改革和创新体系建设领导小组), Vice Premier Liu He presided over the group’s first meeting on September 5. An official statement on the meeting seemed to reference the U.S.-China trade and investment tensions, noting the “external development environment” and indicating that China will make efforts to stimulate scientific and technological innovation to build its “national strength and international competitiveness.”

MIIT minister identifies China’s dependencies in core technologies a key risk

Translated excerpt from an article by Ministry of Industry and Information Technology chief Miao Wei in party journal Quishi:

Today's revolutionary breakthroughs in such fields as AI, quantum communication, the Internet of Things, blockchain, and new materials create the possibility of systemic breakthroughs in a number of fields, such that the world is entering a critical period in which emerging industries foster development. We must seize the rare historic opportunity to use breakthroughs in core technologies to cultivate emerging industries. At the same time, new energy also comes from the transformation and upgrading of traditional industries. For traditional industries to compete successfully in the market with vitality, they must transform industrial processes, products, and model innovation through strengthening core technologies and upgrading to advanced technologies. They must substantially increase labor productivity and product added value, and continuously strive toward the middle-upper level.

Strengthening core technologies is a key move in maintaining industrial security. General Secretary Xi Jinping has repeatedly emphasized that core technology is an important instrument of the state and our greatest source of vitality. Allowing our core technology to be controlled is a great hidden danger. Developed countries have restricted exports to China of some critical technologies and core products. China faces hidden risks to industrial security in many sectors such as integrated circuit, basic software, Internet, high-end manufacturing equipment, and new materials.