TMT Developments in China

The first half of 2015 has seen a number of landmark developments shaping China's TMT sector.

Since becoming the world's largest online retail market in 2013, China's e-commerce market has continued to expand at a much higher rate than the economy overall. China's online retail market reportedly totalled USD 450 billion in 2014, with the most rapid growth now being seen in outlying regions underserviced by traditional retail businesses.

This explosive growth has been well received by the Chinese authorities, and so the e-commerce sector saw a flurry of market liberalisation measures in the second quarter, with the availability of 100% foreign participation in online data processing and transaction processing services being a highlight of the State Council's Opinions on Vigorous Development of E-Commerce, which were implemented through MIIT's Circular 196. The State Council followed with further important measures in June directed at encouraging cross-border e-commerce.

At the same time, the State Council's liberalisation of the payment clearance market in May creates the possibility of further payment services liberalisation in China, supporting the accelerating movements in e-commerce.

These developments bode very well for multinational participation in China's e-commerce and payments markets, but have been tempered somewhat by equally ground-breaking developments in cyber security regulation. July saw the passage of China's new National Security Law, which casts an extremely wide net for regulation of national security matters in China. The same month saw the publication of a draft Cyber Security Law that show a China increasingly conflicted by the desire to integrate in the global economy through technology and at the same time preserve its unique understanding of national security and stability. These tensions will be closely watched in coming months as multinationals evaluate the implications for technology deployment in China.

Other key developments show a greater China coming to grips with more advanced regulatory concepts that are critical to the TMT sector, including important antitrust developments in China and Hong Kong, cookie regulation and the possibility of a recognition of a "right to be forgotten" in Hong Kong.

We hope that you enjoy this selection of articles, which we believe represent a good cross-section of the vibrant developments in Greater China's TMT sector.

The content of this TMT brief is as follows:

• China’s new national security law – new hurdles for technology companies?
• China’s draft cyber security law proposes more stringent regulation of cyberspace
• E-commerce liberalization kicks off in China
• Chinese court provides guidance on lawful use of cookies
• A right to be forgotten in Hong Kong?
• Supreme People’s Court clarifies certain patent dispute rules
• MIIT think-tank issues white papers on mobile internet industry
• China opens up domestic bank card clearing market to foreign competition
• Merger control in Hong Kong’s telecom industry – emperor’s new cloths?
• Drive towards “more market” in China’s standard-setting process
• China’s first antitrust regulation against IPR abuses

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