Data Sheet: China and Hong Kong Sign a Memorandum of Understanding

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In this week’s Data Sheet, we look at what is arguably the biggest deal of the year so far: China and Hong Kong have signed a memorandum of understanding that will boost data flows between both territories. The announcement follows several years of efforts by both sides to establish a mechanism for the exchange of data, and could have profound implications for the digital economy.

The pact was announced by Hong Kong Chief Executive Leung Chun-ying and Chinese Vice Premier Liu Jian. It is expected to provide a platform for the “full and efficient” use of data and enhance cross-border trade and investment. It would also allow both parties to protect data privacy and security, while ensuring that the data is used for legitimate purposes and is not transferred to third parties.

A key part of the pact is that it will not apply to any data that is not personal data, defined as information that can identify an individual either directly or indirectly. This includes data that is aggregated or de-identified so that specific individuals cannot be identified, as well as CCTV recordings and logs of persons entering car parks that do not specifically identify the person concerned.

This is an important distinction for businesses that operate in multiple jurisdictions, as it may mean that they have to comply with different data protection laws. As Padraig Walsh, a member of our Data Privacy practice, explains, it can also mean that companies might have to interpret some key principles differently in each jurisdiction.

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