China has enforced a new controversial cyber-security law stipulating both local and foreign businesses to allow the country's cyber-security watchdogs to store and monitor all critical information within the mainland's servers. Consequently, all domestic and foreign enterprises are expected to abide by the new laws within 19 months starting June 1 and extending up to the end of 2018.
Although the cross-border data transfer law was passed in November 2016, the Chinese internet-regulatory authorities could not enforce the new laws, following widespread opposition from foreign companies and governments.
Foreign businesses and authorities averred that the law set unjustified barriers and conflicted World Trade Organisation rules while also lacked in compliance details, according to the South China Morning Post.
Fearing large-scale disruptions to business enterprises, Michael Chang, the vice-president of the European Union Chamber of Commerce in China said: "There are [still] uncertainties and unclarified terms" with the new cross-border cyber-data laws that are being passed by the Cyberspace Administration of China (CAC).
However, CAC has defended its move saying that the new laws are being enforced to "safeguard the national cyberspace sovereignty and national security rather than to restrict foreign enterprises."
Foreign firms and various lobby groups are worried about the abstract compliance details of the new cyber laws that could leave their business at risk. The biggest challenge to enterprise firms will be the mandate to pass security reviews, before their stored data can be transferred or moved across the Chinese border.
The Cyberspace Administration of China reiterated that their goal is to prevent the spread of illegal information across countries rather than impede the freedom of speech.
In line with China's ethics and principles of cyber sovereignty, the country is already practising a strict censorship regime on the internet. China has banned access to foreign news outlets while also limiting content access on search engines as well as social media sites, including Twitter and Facebook.