The Technology, Media and Telecommunications Review: China

Overview

In terms of matters relating to TMT, the government has always taken an affirmative position with the intention of constantly harmonising different sets of sector-specific laws and regulations with the rapid development of the TMT industry. Meanwhile, various incentive measures and preferential policies have been designed to ensure the protection and conditions for the expansion of fair competition and the development of a healthy market.

TMT regulation in China divides all telecommunications into two categories: basic telecommunications services (BTS) and value-added telecommunications services (VATS). BTS essentially refers to the provision of infrastructure facilities and basic voice and data transmissions, both domestically and internationally, while VATS refers to the provision of specialised services via the basic infrastructure facilities. China adopts a strict licensing system for the telecoms industry, and telecoms operators are required to obtain a licence to engage in either BTS or VATS. To fulfil its commitments to the World Trade Organization, China is gradually opening up its telecoms industry to foreign investment.

Among all the VATS, internet content services and e-commerce have grown at a rapid pace in recent years. Following the prosperity of the internet industry, online IP infringement, unfair competition and anti-counterfeiting, antitrust, cybersecurity and data security risks, and personal information (PI) protection are issues that are starting to become of greater concern to telecoms operators.

Regulation

i The regulators

TMT is one of the broader sectors in China, touching upon a number of different fields of business. The Ministry of Industry and Information Technology (MIIT) is the primary regulatory body in charge of licensing for and administration of BTS and VATS, including internet content or service provision (internet content provider (ICP), internet service provider (ISP) and service provider) and internet access tariffs and charges. Due to its complex nature, the TMT sector is also governed by other regulatory authorities, including but not limited to:

  1. Ministry of Commerce (e-commerce policy, foreign investment);
  2. Ministry of Culture and Tourism (artistic creation);
  3. National Development and Reform Commission (IT industry planning and policy);
  4. State Administration for Market Regulation and its local branches (consumer rights protection, online advertising, fair competition, registration of entities, PI protection);
  5. Ministry of Public Security (cybersecurity, data security, PI protection and telecom fraud, etc.);
  6. National Radio and Television Administration (NRTA) (news, publications, TV, radio, film, import and export of films, books, music, etc.);
  7. State Intellectual Property Office (patent, trademark and geographical indication);
  8. Office of State Commercial Cryptography Administration;
  9. Cyberspace Administration of China (CAC)/Office of the Central Cyberspace Affairs Commission (central internet regulator and censor, regulating cybersecurity, data protection, PI protection, internet content, etc.); and
  10. National Information Security Standardisation Technical Committee (issuing national standards of information security).

ii Main sources of law

The main sources of legislation and regulations governing the TMT sector in China are as follows:

  1. Decision of the National People's Congress Standing Committee to Strengthen Internet Information Protection;
  2. the following laws:
    • Advertising Law;
    • Anti-foreign Sanctions Law;
    • Civil Code;
    • Copyright Law;
    • Cryptography Law;
    • Cybersecurity Law (CSL);
    • Data Security Law (DSL);
    • E-Commerce Law;
    • Electronic Signatures Law;
    • Export Control Law;
    • Foreign Investment Law;
    • Law on the Protection of Consumer Rights and Interests;
    • Law on the Protection of Minors;
    • Personal Information Protection Law (PIPL);
    • Standardisation Law; and
    • State Security Law;
  3. the following regulations:
    • Provisional Regulations for the Administration of Internet Culture;
    • Radio Regulation;
    • Regulations for the Management of Commercial Cryptographic (Revised Draft for Comments);
    • Regulations for the Management of Online Publishing Services;
    • Regulations for the Management of Radio and Television;
    • Regulations for the Protection of Computer Software;
    • Regulations for the Protection of Security of Critical Information Infrastructure;
    • Regulations for the Protection of the Right of Communication through Information Networks;
    • Regulations for the Security Protection of Computer Information System;
    • Regulations on Import and Export of Technologies;
    • Regulations on Multi-level Protection for Cybersecurity (Exposure Draft); and
    • Telecommunications Regulations;
  4. the following measures:
    • Interim Measures for the Administration of Internet Advertising;
    • Interim Measures for the Administration of Online Car Hailing Services;
    • Interim Measures for the Administration on Use and Maintenance of Internet Information Security Management System;
    • Measures for Cybersecurity Review;
    • Measures for the Administration of Electronic Certification Services;
    • Measures for the Administration of International Communications Gateways;
    • Measures for the Administration of Internet Domain Names;
    • Measures for the Administration of Internet Information Services;
    • Measures for the Supervision and Administration of Online Transactions;
    • Measures for the Administration of Qualification of Secret-involved Information System Integration;
    • Measures for the Administration of Services of Private Network and Directional Transmission of Audio-Visual Programmes;
    • Measures for the Administration of Telecommunications Construction;
    • Measures for the Administration of the Connection of Telecommunications Equipment to Networks;
    • Measures for the Handling of Disputes Regarding Interconnections between Telecommunications Networks;
    • Measures for the Registration of Copyright in Computer Software;
    • Measures for the Security Assessment for Cross-border Transfer of Personal Information (draft for comments);
    • Measures for the Security Assessment of Export of Personal Information and Important Data (draft for comments);
    • Measures on Foreign Investment Security Review;
    • Measures on Internet-based Information Services (revision draft for comments); and
    • Measures on Pilot Scheme for Foreign-funded Value-added Telecommunications Businesses in China (Shanghai) Pilot Free Trade Zone;
  5. the following provisions:
    • Certain Provisions for the Administration of Automobile Data Security (for trial implementation);
    • Interim Provisions on Radio Management of Wireless Charging (Power Transmission) Equipment (draft for comment);
    • Interim Provisions on the Protection and Management of Personal Information in Mobile Internet Applications (draft for comments);
    • Internet User Public Account Information Services Management Provisions;
    • Provisions for Technical Measures of Internet Security Protection;
    • Provisions for the Administration of Internet Information Search Services;
    • Provisions for the Administration of Internet News Information Services;
    • Provisions for the Administration of Mobile Internet Applications Information Service;
    • Provisions for the Administration of Online Audio and Video Information Services;
    • Provisions for the Administration of the Construction of International Communications Facilities;
    • Provisions on Algorithm Recommendation of Network Information Services (draft for comment);
    • Provisions on Prohibition of Unfair Competition on the Internet (draft for comment);
    • Provisions on the Administration of Network Products Security Vulnerabilities;
    • Provisions on the Cyber Protection of Children's Personal Information;
    • Provisions on the Ecological Governance of Network Information Content; and
    • Provisions on the Security Assessment of Internet-based Information Services with Attributes of Public Opinions or Capable of Social Mobilisation;
  6. the following catalogues and lists:
    • Catalogue of Certification for Commercial Encryption Products (Batch 1);
    • Catalogue of Guide of Foreign Investment;
    • Catalogue of Network (Cyber) Critical Equipment and Cybersecurity-Specific Products (Batch 1);
    • Catalogue of Technologies Prohibited or Restricted from Export by China;
    • Catalogue of Telecommunications Services;
    • Industry Guidelines on Encouraged Foreign Investment (July 2020 Draft for Comments);
    • List of Commercial Cryptographic Products subject to Export Control;
    • List of Commercial Cryptographic Products subject to Import Licence;
    • Negative List for Foreign Investment Access in Pilot Free Trade Zones; and
    • Negative List of Access of Foreign Investment;
  7. the following rules:
    • Rules for the Commercial Password Product Certification;
    • Rules for the Administration of Foreign-Invested Telecommunications Enterprises;
    • Rules for the Administration of the Interconnection of Public Telecommunications Network;
    • Rules for the Protection of Personal Information of Telecommunication and Internet Users;
    • Rules for the Allocation of Radio Frequency Band;
    • Rules for the Registration of Real Names of Phone Users; and
    • Procedural Rules for the Resolution of Domain Name Disputes by China Internet Network Information Centre;
  8. and a great number of national standards and guidelines.

The main statute governing telecoms services is the Regulations for the Management of Telecommunications, supported by the Catalogue of Telecommunications Services. Foreign-invested companies may refer to the Catalogue of Guide of Foreign Investment, Industry Guidelines on Encouraged Foreign Investment and Negative List of Access of Foreign Investment for additional restrictions and requirements imposed on acquiring telecom licences.

iii Regulated activities

A telecommunications operator who operates basic telecommunications services or VATS (as classified in the Catalogue of Telecommunications Services) shall obtain a licence under the Measures for the Administration of Telecommunications Service Operating Permits or the Rules for the Administration of Foreign-Invested Telecommunications Enterprises.

iv Ownership and market access restrictions

The newly revised Foreign Investment Law in 2019 and high-profile statements in recent years reveal China's willingness to be more open to foreign investors in the TMT field, which was also one of China's commitments to the World Trade Organization.

With certain restrictions and regulatory approval procedures, foreign-funded telecoms enterprises are able to engage in telecoms businesses not prohibited by the Negative List of Access of Foreign Investment or the Negative List for Foreign Investment Access in Pilot Free Trade Zones (if applicable) provided that they abide by the provisions of the Regulations for the Management of Telecommunications and other applicable laws and regulations.

BTS and VATS are available to foreign investment by way of a Sino-foreign equity joint venture. To establish a foreign-invested telecommunications enterprise providing BTS or VATS, the major Chinese investor shall submit the required application documents for approval to MIIT.

The ultimate proportion of contribution and registered capital required for BTS business is as follows.

Business classificationsGeographical areasRegistered capitalProportion of contribution
BTS businessNationwide, or beyond a single province, autonomous region or municipality directly under the central governmentNot less than 1 billion yuanForeign investors: no more than 49% (except radio paging services and the construction and operation of power grid systems)
Within a province, autonomous region or municipality directly under the central governmentNot less than 100 million yuan

The major foreign investor of a foreign-invested telecommunications enterprise providing BTS shall meet the following conditions:

  1. being qualified as a legal person or enterprise;
  2. having obtained a licence for providing BTS from the registration country or region;
  3. having the funds and professionals commensurate with its business operation; and
  4. having a good performance record and experience in providing BTS.

Advantages enjoyed by foreign investors in free trade zones, including Shanghai Pilot Free Trade Zone (Shanghai FTZ) and Hainan Free Trade Port (Hainan FTP), have become more obvious, particularly in VATS business. The availability of VATS for foreign investors in Shanghai FTZ and Hainan FTP is summarised in the following chart.

Type of VATSShanghai FTZHainan FTP
AvailabilityMaximum foreign equity ratioAvailabilityMaximum foreign equity ratio
B11 internet data centre services×\≤100%
B12 content delivery network services×\≤100%
B13 domestic internet protocol virtual private network services≤50%≤50%
B14 internet access servicesRestricted to ISP services provided to internet users, ≤100%Restricted to ISP services provided to internet users, ≤100%
B21 online data processing and transaction processing servicesE-commerce, ≤100%; others, ≤50%≤100%
B22 domestic multiparty communication services≤100%≤100%
B23 store-and-forward services≤100%≤100%
B24-1 domestic call centre services≤100%≤100%
B24-2 offshore call centre services≤100%≤100%
B25 information servicesApp store, ≤100%; others, ≤50%App store, ≤100%; others, ≤50%
B26-1 internet domain name resolution services≤50%≤50%

In addition to the availability of VATs, foreign investors in free trade zones also enjoy multiple substantive and procedural advantages.

Taking Shanghai FTZ as an example, the chart below compares the substantive and procedural differences in foreign investors' application for a VATS licence in Shanghai FTZ and non-free trade areas.

 Shanghai FTZNon-free trade areas
AuthorityShanghai Communications AdministrationMIIT
TimelineWithin three monthsAround one year in practice
RequirementsLegally established in the FTZ

 

Registered capital ≥1 million yuan

 

The place of registration and service facilities of enterprises shall be located within Shanghai FTZ (for operating e-commerce business of online data processing and transaction processing, the service facilities could be located outside Shanghai FTZ, but should still be located within Shanghai)

The foreign investor has a record of good performance and operation experience in operating VATS business; a business description and supporting certificates should be provided

For providing service nationwide or across different provinces, registered capital ≥10 million yuan

For providing service within a province, registered capital ≥1 million yuan

The foreign investor has a record of good performance and operating experience in operating VATS business; a business description and supporting certificates should be provided

In November 2020, China signed the Regional Comprehensive Economic Partnership (RCEP). The annex on telecommunications services sets out regulatory disciplines to underpin effective market access and competitive markets in telecommunications services in the RCEP area.

In June 2021, MIIT issued a notice on deepening the reform of separating business licenses from administrative permits. Across the country, the foreign investment in telecommunications business (basic telecommunications business) approval, the foreign investment in telecommunications business (category value-added telecommunications business) approval and the foreign investment in telecommunications business (type 2 value-added telecommunications business) approval will be cancelled, the Foreign Investment in Telecommunications Business Verification Opinions will no longer be issued, and the corresponding foreign investment review shall be included in the telecommunications business licence approval process.

v Transfers of control and assignments

An ownership change or transfer of equity of a foreign-invested telecommunications enterprise shall comply with China's laws and regulations on investor qualifications and industrial policy requirements. First, the ownership change or transfer of equity of a foreign-invested telecommunications enterprise shall not violate the Catalogue of Guide of Foreign Investment and the Negative List of Access of Foreign Investment or Negative List for Foreign Investment Access in Pilot Free Trade Zones (if applicable). In addition, in TMT industries, MIIT and its branches and the administrative, industrial and commerce authorities may review such transactions.

The enterprise shall, within 30 days of the date on which the examination and approval authority approves the change or the transfer, go through the formalities regarding that examination and approval authority. If the Chinese investor in a joint venture will obtain the entire equity it shall, within 30 days of the date of approval by the examination and approval authority, cancel the certificate of the foreign-invested enterprise to the examination and approval authority. The enterprise shall, within 30 days of the date of change or cancellation of the foreign-invested enterprise approval certificate, apply to the registration authority for registration of change.

Telecommunications and internet access

i Internet and internet protocol regulation

With regard to the government institutions that were restructured in 2018, generally, internet and IP-based services are regulated by the following authorities:

  1. internet services and cybersecurity issues: MIIT, the CAC and the Ministry of Public Security; and
  2. IP-based services: NRTA (news, publications, TV, radio, film, import and export of films, books, music, etc.), the Copyright Protection Centre of China (copyright registration issues) and the State Intellectual Property Office (patent, trademark and geographical indication).

ii Universal service

Under the current telecoms legal system of China, basic telecommunications operators are required to perform their corresponding obligations to make telecommunications services universally available in accordance with relevant state regulations. MIIT may determine which telecommunications operators shall assume specific obligations in respect of the universal availability of telecommunications services by designating such operators or by inviting tenders.

The State Administration for Market Regulation and the State Council's department in charge of pricing are responsible for formulating the procedures for the administration of compensation for the costs of making telecommunications services universally available.

In addition, telecommunications operators engaging in domestic telephone business and mobile phone business are required to provide their subscribers with free telecommunications services of a public welfare nature, such as phone numbers for reporting fire-related accidents, bandit-related incidents, medical emergencies and traffic accidents, and the availability of telephone lines shall be guaranteed.

iii Restrictions on the provision of service

Price regulation

According to the Announcement of MIIT and the National Development and Reform Commission on Market-Regulated Prices for Telecom Services issued in 2014, telecoms service prices are regulated by the market. When setting prices, operators must fully consider:

  1. production and operation costs;
  2. supply and demand in the telecoms market;
  3. other factors to reasonably determine charging rates; and
  4. the fact that operators must publish charge plans, billing methods and other information.

On 23 August 2018, MIIT issued a Circular on Further Regulating Activities to Market Telecommunications Tariff Schemes, stating that telecommunications business operators must prepare their own reasonable schemes for telecommunications charges. These schemes must clearly specify the operator's:

  1. structure of fees;
  2. fee items;
  3. fee standards;
  4. charging principles;
  5. corresponding services;
  6. conditions for handling telecommunications business; and
  7. validity periods.

In addition, the Circular requires operators to use simple, definite, standardised and unambiguous language to present such information.

Consumers also have the right to protect their interests under the Law of the PRC on the Protection of Consumer Rights and Interests.

Requirements for manufacturers and operators

Under the network access permit system, the following requirements shall be met by telecommunications equipment manufacturers:

  1. obtaining the relevant network access permit;
  2. once a network access permit is obtained, promptly report such for the record to the telecommunications authorities in the various provinces, autonomous regions and municipalities, and accept the supervision and management of such departments;
  3. if there is any modification relating to technology and appearance, such changes shall be tested, and a new application for a new network access permit shall be submitted;
  4. ensure that the quality of the equipment for which they have obtained a network access permit is stable and reliable, and they may not lower the quality or performance of their products; and
  5. affix a sticker presenting the network access permit logo and the network access certificate stating the certificate number, applicant, name of manufacture, device name, device type and the effective date of the certificate.

The following requirements shall be met by telecommunications operators:

  1. obtaining network access approval prior to using telecommunications equipment;
  2. considering that users have the right to choose the telecommunications terminal equipment to be used, and no carrier shall prevent subscribers from connecting their own telecommunications terminal equipment for which the network connection permit has been obtained;
  3. assisting the authorities to review the certified equipment connected to their networks;
  4. major incidents caused by the telecommunications equipment shall be truthfully reported in a brief written report by the telecommunications operators; and
  5. they shall not monitor and control the content, applications and services accessed by their network users under the regulations on PI protection.

iv Privacy and data security

Regulatory and legislative policies in national interests

Pursuant to the CSL and the Cybersecurity Review Measures promulgated in 2020, there are two scenarios under which cybersecurity review will be triggered. One is when operators of critical information infrastructures (CIIOs) purchase network products and services, which impacts or may impact the national security. The other is when any member of the cybersecurity review working committee deems it necessary to initiate the cybersecurity review. Under the DSL, China is to establish systems for data security reviews and conduct national security reviews of data handling activities that impact or might impact national security. In addition to the aforementioned two scenarios, the Cybersecurity Review Measures (Amendment Draft for Public Comment) published on 10 July 2021 added two more circumstances that trigger cybersecurity review: one is when a data processor's data processing activity impacts or may impact the national security; the other is when the company who possess more than 1 million individual users' personal information is to be listed on foreign stock exchanges.

Under the CSL, network operators are required to provide technological support and assistance to public and state security organs in national security and criminal investigations. Under the DSL, public security organs and state security organs collecting data as necessary to lawfully preserve national security or investigate crimes shall follow relevant state provisions and complete strict approval formalities to do so, in accordance with the law, and relevant organisations and individuals shall cooperate.

The DSL also establishes the following mechanisms to protect national interests:

  1. an innovative proposal of the notion of national core data, defined as data in relation to national security, the lifeline of the national economy, important parts of people's livelihood and major public interests, which shall be subject to a more stringent management system;
  2. in line with the Export Control Law, the DSL specifies that the state exercises export control over the data that falls under controlled items and is related to the safeguarding of national security and interests and the fulfilment of international obligations;
  3. an echo of current international situations states that China may adopt equivalent countermeasures against any prohibitive or restrictive measures imposed by any country or region in terms of data-related investment or trade; and
  4. imposition of control over requests for data by foreign judicial or law enforcement agencies. The DSL stipulates that no organisation or individual within the territory of China can provide foreign judicial or law enforcement authorities with data stored within the territory of China without the approval of the competent authorities.

PI protection

Under the PIPL, a PI processor defined as an organisation or individual that independently determines the purpose and method of processing in the processing of PI is required to follow five principles for PI processing. The PIPL provides seven legal bases for processing PI. Prior to processing any PI, PI processors shall ensure that for each PI processing activity, there is an appropriate legal basis. PI processors are also required to follow specific rules, such as rules for processing sensitive PI, automated decision-making, collecting images or personal identity recognition in public venues and transferring PI outside of China. The PIPL also clarifies the PI rights of individuals and the obligations of PI processors. Besides, companies in violation of the PIPL may face severe penalties, including a fine of up to 5 per cent of the last year's turnover of the company, revocation of the company's licence to do business in China and personal liabilities for company executives.

Child information protection

To regulate the collection and processing of child information, the CAC published the Provisions on the Cyber Protection of Children's Personal Information in 2019. The term children refers to minors under the age of 14. Network operators are required to fulfil a number of obligations, including but not limited to:

  1. establishing specialised rules and user agreements for the protection of children's PI;
  2. informing the child's guardians in a noticeable and clear manner, and obtaining the consent of the child's guardians for the collection, use, transfer or disclosure of a child's PI; and
  3. designating persons to take charge of the protection of children's PI.

The Law on the Protection of Minors (Revised in 2020), which newly added a chapter on network protection, and the PIPL promulgated in 2021, both recite the requirements of establishing special rules for processing PI and obtaining parents' or other guardians' consent when processing PI of persons under 14. Additionally, under the PIPL, PI of persons under 14 also fall into the scope of sensitive PI, thereby rules for processing sensitive PI should be followed.

Security protection obligations

Except for the obligations of PI protection, network operators are also required by the CSL to fulfil the following security obligations according to the requirements of the multi-level protection scheme to ensure that the network is free from interference, damage or unauthorised access, and prevent network data from being divulged, stolen or falsified:

  1. formulating internal security management systems and operating instructions, determining the persons responsible for cybersecurity and implementing the cybersecurity protection responsibility;
  2. taking technological measures to prevent computer viruses, network attacks, network intrusions and other actions endangering cybersecurity;
  3. taking technological measures to monitor and record the network operation status and cybersecurity incidents, and preserve relevant web logs for no less than six months; and
  4. taking measures such as data classification, and back-up and encryption of important data.

Under the Security Protection Regulations for Critical Information Infrastructure, CIIOs shall establish sound cybersecurity protection systems and a responsibility system to ensure the input of workforce, financial and material resources. The person chiefly in charge of the CIIOs shall take overall responsibility for the protection of the security of critical information infrastructure, lead the security protection of critical information infrastructure and the disposal of major cybersecurity incidents, and organise the study and resolution of major cybersecurity issues.

Under the DSL, a data processor shall establish a sound data security management system throughout the whole process, organise data security education and training, and take corresponding technical measures and other necessary measures to ensure data security, in accordance with the provisions of laws and regulations. To carry out data processing activities by making use of the internet or any other information network, the aforesaid obligations for data security protection shall be performed according to the requirements of the multi-level protection scheme. Processors of important data are also required to designate personnel responsible for data security and the management body and implement the responsibility of data security protection.

Under the PIPL, PI processors shall, according to the purpose and method of processing PI, types of PI, impacts on personal rights and interests, and possible security risks, take the following measures to prevent unauthorised access and divulgence, falsification and loss of PI:

  1. formulating internal management systems and operating procedures;
  2. implementing category-based management of PI;
  3. taking corresponding technical security measures such as encryption and de-identification;
  4. reasonably determining the authority to process PI and conducting security education and training for relevant employees on a regular basis;
  5. formulating and organising the implementation of emergency plans for PI security incidents; and
  6. other measures stipulated by laws and administrative regulations.

Where the quantity of PI processed reaches the number specified by the CAC, the PI processor shall designate a person in charge of PI protection to be responsible for supervising the activities of processing of PI and the adopted protection measures.

Spectrum policy

In terms of telecommunications resources, the central government is attempting to carry out uniform planning, centralised administration and reasonable allocation, and to implement a system of use with compensation. Telecommunications resources are resources that have telecommunications functions, and are limited in amount, including, inter alia, radio frequencies, satellite orbit locations and telecommunications network codes.

A telecommunications operator that occupies or uses telecommunications resources shall pay telecommunications resource fees. MIIT is the major government body responsible for formulating specific measures for fee collection for use of telecommunications resources. When MIIT allocates telecommunications resources, it needs to consider factors including telecommunications resource planning, usage and expected service capability. The allocation of telecommunications resources may be made either by designation or by auction. To date, no auctions have been conducted.

Without the approval of MIIT, an operator may not unilaterally use, transfer or lease out telecommunications resources or change the use of telecommunications resources. After a user of telecommunications resources obtains a telecommunications network code, the major telecommunications operators or other relevant parties shall be obligated to take the necessary technical measures to cooperate with such user of telecommunications resources to allow it to achieve the functionality of its telecommunications network code resources.

Media

i Regulation of media distribution generally

China has systematic restrictions on TV and radio content provision and transmission.

Radio or television stations shall be established by the administrative departments for radio and television under governments, and educational television stations may be established by the administrative departments for education under the governments at or above the level of a city divided into districts or counties. No other entity or individual may establish radio or television stations.

An entity that intends to establish a cable television station shall obtain the preliminary consent of the competent department of radio and television of the province and apply for the approval of NRTA. Upon approval, a permit to establish a cable television station shall be issued by NRTA to the applying entity. An entity that intends to establish a small cable television station shall obtain the preliminary consent of the competent department of radio and television of the country, and apply for the approval of the competent department of radio and television of the province. Upon approval, a permit to establish a small cable television station shall be issued by the competent department of radio and television of the province to the applying entity.

An entity or individual that intends to set up master antenna television shall report to the department of radio and television of the district or county for its records.

An entity that intends to utilise its existing ground satellite receiving facilities or install special ground satellite receiving facilities to receive television programmes transmitted via foreign satellites shall apply in writing to the competent department at or above the provincial level. If consent is granted thereto upon examination, the applying entity shall proceed to submit the application for examination and approval to the department (or bureau) of radio and television of the province, autonomous region or municipality directly under the central government where the applying entity is located. Upon this approval, a permit to receive television programmes transmitted via foreign satellites shall be issued to the applying entity, and the case shall be reported by the examining and approving authorities to MIIT, NRTA, the Ministry of Public Security and the Ministry of State Security for their records.

The watchdog also keeps a close eye on emerging platforms, such as bulletin board systems, blogs, microblogs, chat rooms, communication groups, public accounts, short videos, online streaming, information sharing and mini programmes. MIIT, the Ministry of Public Security, Ministry of Culture and Tourism and NRTA have jointly released a Notice on Promulgation of the Guiding Opinions on Strengthening the Standardized Administration of Online Live-streaming clearly stating the requirements for the urging of the implementation of primary responsibility, ensuring correct orientation and content security, establishing and improving systems and norms, and enhancing comprehensive management capacity. The CAC and the Ministry of Public Security jointly released the Provisions on the Security Assessment of Internet-based Information Services with Attribute of Public Opinions or Capable of Social Mobilisation, clearly stating the goals of strengthening the security management of internet-based information services and relevant new technologies and new applications, regulating internet-based information service activities and safeguarding national security.

The Radio and Television Law (draft for comments) released in March 2021 applies to radio, television and online shows. The draft law includes a list of banned content across all broadcast channels such as content that:

  1. violates the Constitution and laws;
  2. harms national security, sovereignty, honour and territorial integrity;
  3. incites ethnic hatred and discrimination;
  4. damages traditional customs;
  5. distorts history and attacks national martyrs and heroes; and
  6. promote cults, superstition, fake news, violence, drugs and terrorism.

The drafted law further stipulates rules on overseas broadcasters and international shows. Overseas broadcasters must first receive approval from NRTA before establishing China offices, and imported shows should also seek approval from NRTA prior to being aired. Overseas satellite television networks that want to broadcast shows in the Chinese mainland or via China–international co-productions should first get permits from NRTA and make sure their shows fit the demands outlined in the regulatory list.

ii Internet-delivered video content

An entity that intends to provide internet audio and video programme-related services shall obtain a permit for audio and video programmes transmitted through an information network issued by the competent radio and television authority, or go through the formalities for registration in accordance with the provisions of these regulations. Article 6 of the Provisions for the Administration of Online Audio and Video Information Services published in November 2019 affirmed this qualification and permit requirement.

As internet access is very common in China and because of technology development, ICPs pay great attention to the protection of their contents' copyright. ICPs may include large platforms providing audio and video content to consumers, or personal media. ICPs take technical measures to prevent copyright infringement. More and more lawsuits related to the right of communication through the information network (a subclass of copyright under the Copyright Law of China) are being filed to fight against the unauthorised use, reproduction or transmission of internet contents. The amount of compensation being awarded in these types of cases is getting higher, especially in judgments of the intellectual property courts in Beijing, Shanghai and Guangzhou that focus on the protection of copyright ownership of internet content.

The year in review

With the rapid development of technology, China is developing a comprehensive regulatory system to address the protection and processing of different types of data with an increased focus on national security.

In June 2021, China passed the DSL to regulate data processing activities, guarantee data security, promote the development and utilisation of data, protect the legitimate rights and interests of individuals and organisations, and safeguard the sovereignty, security and developmental interests of the state. In July 2021, the State Council passed Security Protection Regulations for Critical Information Infrastructure in accordance with the CSL for the purposes of protecting the security of critical information infrastructure and maintaining cybersecurity.

The legislature is also working on establishing China's PI and privacy structure. The Civil Code, which contains an individual chapter on right to privacy and protection of personal information, came into effect as of January 2021. In August 2021, China passed the PIPL, in accordance with the Constitution, to protect the rights and interests of PI, regulate the processing of PI and promote the reasonable use of PI. The PIPL is expected to be a milestone in the establishment of China's PI protection system.

With the promulgating of the DSL and the PIPL, the legislature and administrative agency will in the future focus on enacting accompanying measures, including but not limited to catalogues of important data and national core data; rules for data security risk assessment, data security review, important data and PI cross-border transfers; and rules relating to emerging technologies and applications such as artificial intelligence and the internet of vehicles.

Conclusions and outlook

To fulfil China's commitments to the World Trade Organization and RCEP, as well as to show China's sincerity in wishing to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, we believe that the VATS market will gradually become more open to foreign investors, even though foreign investment is still likely to be restricted or prohibited in internet content services and the media (including emerging platforms).

In the age of big data, China has seen continuing progress towards legislation to protect data and PI and increasing law enforcement in this field ever since the CSL came into effect. The PIPL and DSL were promulgated in 2021, and are expected to become the driving force of data security and privacy protection of China together with the CSL. A number of rules and measures accompanying the CSL has been released, and more rules and measures accompanying the DSL and the PIPL are expected to come out, such as, inter alia, rules for cross-border transfers of important data and standard contractual clauses for cross-border transfer of PI, which will be of critical interest to foreign investors doing TMT business with China.

Footnotes

1 Jihong Chen is an equity partner at Zhong Lun Law Firm.

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