Research On Legal Issues Of Data Localization In China In The Context Of Digital Trade

In the era of big data,under the profound influence of the rapid development of digital technology,digital trade,a new form of trade,has emerged and is changing the pattern of international trade.The emergence of digital trade has brought new opportunities for the development of international trade,and at the same time has posed no small challenge to trade rules.Value conflict,on the one hand,digital trade to data and information as the subject of trade,the Internet as the medium,can save a lot of trade intermediate costs,through the cross-border flow of data can create value.On the other hand,the lack of global uniform rules and mechanisms for data storage and processing makes data easy to be leaked or misused in cross-border flow,thus creating potential risks for national security and personal privacy security.In this context,countries will take certain restrictive measures,such as data localization measures.Since data localization measures may constitute "digital trade barriers" and "data protectionism",which may adversely affect international trade and contradict the purpose of WTO trade liberalization,the compliance of these measures is questioned.At present,WTO is still the most important rule for the operation of international trade.Given that data localization measures only target the cross-border flow of data and mainly affect trade in services,not trade in goods,this paper only discusses the compliance of data localization measures under GATS rules.First of all,according to the "technology neutrality principle",if members do not specifically exclude trade in digital services,services of cross-border data flow should be a kind of "trade in services".In addition,data localization measures will have an impact on the trade of data flow services across borders.Combining the above two elements,it can be considered that GATS rules are applicable to data localization measures.Secondly,on the basis of the above,the legal effect of WTO members’ specific commitments on conventional trade in services can be extended to digital trade in services.There is a risk that data localization measures violate the obligations of "market access" and "national treatment",and in this case,it is necessary to consider whether the data localization measures are eligible for invoking the exception clause under the GATS framework.At present,the starting point of data localization measures adopted by countries is to maintain national security and protect personal information security,which is in line with the "national security exception" and "personal privacy exception" under the GATS framework.However,there is no precedent of invoking the "national security exception" and "personal privacy exception" so far,and there is great uncertainty whether the above-mentioned exceptions can be invoked for data localization measures under such circumstances,and the specific situation of the country’s legislation also affects the possibility of successful invocation to a certain extent.In the absence of meaningful progress at the multilateral level,the WTO’s Working Group on Electronic Commerce,which was established in response to new trade developments,has stalled and new models are being developed in FTA negotiations to address barriers to the development of digital trade.Under the RCEP and CPTPP frameworks,the two regional trade agreements that have been of interest to China’s digital trade development in recent years,both have provisions that encourage the free flow of data and prohibit mandatory localization.Therefore,there is a risk of non-compliance with both Chinese data localization measures,but there is also the possibility of invoking the exceptions.At the time of digital transformation of the international trade landscape,China’s digital trade development has both opportunities and challenges.While national security is undoubtedly the primary value to be focused on in the process of crossborder data flows,we should also be fully aware that too much restriction on crossborder data flows can hinder economic development,and the urgent issue to be addressed in China’s current data legislation is how to balance these two value objectives.With the introduction of the Data Security Law and the Personal Information Protection Law in 2021,China’s cybersecurity legislative system has entered a new phase,which will form a "one main and three supplementary" protection system.Subsequently,the national legislature and relevant departments should provide clear guidelines and clarifications on the relevant rules,further improve the governance system of cross-border data flow in China,and find a balance point to maximize the value of data among the two value objectives of economic development and security protection.