In addition to the anti-sanctions law, China also issued a Data Security Law yesterday, which includes some good news and some not-so-good news.
I will start with the good news:
1. The law explicitly mentions in two provisions that China will safeguard and promote the free flow of data, which is consistent with China’s new position on data flow in the RCEP;
2. China will actively participate in the making of international rules on data security and standards. This is consistent with China’s active participation in the WTO JSI negotiations on e-commerce, which was analyzed extensively in my paper at ssrn.com/abstract=36953….
Now let me turn to the not-so-good news: 1. In most countries, data protection laws focus on personal data. In China, however, there is also the highly ambiguous concept of “important data”, as mentioned in Art. 31 of the Cybersecurity Law.
Now Data Security Law creates yet another type called “core data”, which is more important than important data & subject to the most stringent restrictions. “Core data” includes those on national security, lifeline of national economy, key people's livelihood, public interests.
There seems to be a lot of overlap between "core data" and important data on “critical information infrastructure”, which as I discussed in this paper is a rather vague concept: ssrn.com/abstract=34302…
2. Under Cybersecurity Law, review on data transfer is only required for important data collected and generated by operators of critical information infrastructure.
Under Data Security Law, however, even the transfer of important data collected and generated by other data processors could be subject to security review, subject to the rules to be made by the Cyberspace Administration of China.
3. Data security issues will now be decided and coordinated by the Central National Security Commission of the Chinese Communist Party.
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I’m tired of people claiming that China and US reached an agreement in Madrid last month to refrain from introducing new restrictions.
That is simply not true — even by China’s own account.
1. People’s Daily editorial published the day after the talks quoted He Lifeng saying
“China HOPES US and China would go hand in hand, cancel the relevant restrictions on China as soon as possible, jointly safeguard the hard-won results of the talks with practical actions, and continue to create a good atmosphere for stability of economic and trade relations.”
2. The next day, another People’s Daily editorial made it even clearer:
“It must be pointed out that after a series of economic and trade consultations, the wrong practice of the US to unilaterally impose economic and trade restrictions on China has not stopped. The US has
Why the sudden wave of retaliations and escalations from Beijing?
The answer lies in the eight editorials published in the People’s Daily over the past few days.
Written under the pen name 钟才文, these pieces are widely understood to represent the views of the Office of the
Central Financial and Economic Commission, headed by He Lifeng — China’s economic tsar.
The Oct 4 editorial proclaimed that China has become “the main contributor to global economic growth and an anchor of stability,” attributing this to the “certainty” of China’s development
strategy - a pointed contrast to the “back-and-forth” policies of “some Western countries.” It went on to mock US inconsistencies: “In the past, they championed globalization; now they turn inward. In the past, they vowed to fight climate change; now they withdraw from Paris Agr”
Xi’s Feb speech to private firms is finally published—and it confirms everything I predicted before the meeting:
Private firms must fully align with China’s strategic competition vs the US.
Xi says private firms’ problems stem from external shocks (tech revolutions, trade restrictions) or internal missteps (over-diversification).
To Xi, the Party is not the problem, it is the solution.
Thus, firms must “unify their thoughts and actions with the Central Committee.”
Xi was even more explicit on measures to boost private firms: they should lead national science & tech projects, access major research infrastructure, and join state-led initiatives.
Exactly what I predicted 3 years ago in my @CIGI essay: private firms must be integrated into
What’s the biggest threat to China’s economy in the 2nd half of 2025?
It’s not the trade war, nor any new government policy. It’s a judicial interpretation from the Supreme Court.
On July 31, the Court issued Interpretation on Applicable Law in Trying Labour Dispute Cases (II).
Article 19 states:
“If the employer agrees with the employee, or the employee promises the employer, that there is no need to pay social security premiums, the people’s court shall find the agreement or promise invalid. If the employer fails to pay social security premiums in
accordance with the law, and the employee requests the termination of the labour contract in accordance with the third paragraph of Article 38 of the Labour Contract Law and demands economic compensation, the people’s court shall support the claim.”
The new tariff numbers confirm what I wrote 4 months ago in my @commonplc piece “The Art of a Trade Deal”:
1. I stressed that these negotiations aren’t just about trade-security alignment would be a key factor. This is now explicit in the executive order, which repeatedly cites
security considerations in setting final tariff rates.
2. I predicted countries would be grouped based on key criteria. That’s exactly what we see: broadly speaking, there are three groups—friends (10–15%), enemies (30%+), and frenemies (19–25%).
3. I anticipated aggressive transshipment controls targeting China. The executive order includes just that.
4. Perhaps most tellingly, the order hints what China—the last holdout from the Liberation Day Tariffs—is likely to face: at least 40%, matching the rate applied to