This newsletter summarizes the latest developments in technology, media and telecom in China with a focus on the legislative, enforcement and industry developments in this area.
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Key highlights
On 25 August 2022, the Ministry of Natural Resources issued the Notice on Promoting Development of Intelligent and Connected Vehicles and Protecting Security of Geographic Mapping Information (“Notice”). The Notice brings the processing of geographic mapping data in the ICV industry into the scope of surveying and mapping activities, which are now under close scrutiny by the authorities. The automotive manufacturers, service providers and certain intelligent driving software providers in the ICV industry, who collect, store, transfer and process geographic mapping data are now required to obtain a license or engage a licensed entity to process geographic mapping data. Export of such data is also subject to strict approval process. Entities in the ICV industry are advised to take immediate measures to adapt to the requirements of the Notice.
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Our View
China Strengthens Control over Geographic Data Processing by ICVs
Legislative Developments
On 2 August, the Ministry of Natural Resources issued the Notice on the Work Related to the Pilot Application of High-Precision Maps for Intelligent Networked Vehicles (the “Notice”) to implement trial programs for the application of high-precision maps for intelligent networked vehicles in six cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and Chongqing. The Notice encourages the innovation of management and technology including the exploration of diversified paths for the application of different map types in autonomous driving, verification and promotion of different technical routes and application scenarios conducted by different market entities, as well as pilot tests and demonstration application in the pilot cities of advanced assisted driving maps for common urban roads and high-precision navigation apps according to the practical needs of the industry. The Notice also proposes to strengthen the security and confidentiality management in the whole process of geographic information collection, aggregation, processing, and use in autonomous driving activities, develop and strictly implement emergency response plans for security incidents, and ensure that none of the piloting activities will endanger the security of China’s geographic information.
On 8 August, the Ministry of Transport released the Guidelines on Safety Services for Autonomous Vehicle Transportation (for Trial Implementation) (Draft for Comments) (the “Guidelines”). The Guidelines, under the premise of ensuring transportation safety, encourage the use of autonomous buses in enclosed BRT systems and autonomous taxis under simple and relatively controllable scenarios for passenger transportation services and allow the use of autonomous vehicles on point-to-point trunk roads that are relatively enclosed for cargo transportation. The Guidelines also put forward requirements for transportation operators, vehicles, personnel, and security measures of autonomous vehicle transportation.
3. MOST and another five departments issued guidance for the development of artificial intelligence
On 12 August, the Ministry of Science and Technology (MOST) and another five departments released the Guidance on Accelerating Scene Innovation to Promote High-Level Application of Artificial Intelligence for High-Quality Economic Development (the “Guidance”), which clearly sets scene innovation as the development goal of both AI technology upgrades and new paths for industrial growth. The Guidance also puts forward specific measures including creating major scenes for AI, improving innovation capabilities for AI scenes, accelerating the opening of AI scenes, and strengthening the supply of innovation elements for AI scenes.
On 22 August, the Shanghai Municipal Transportation Commission released the Implementation Rules for the Pilot Operation of Intelligent Networked Vehicles in Shanghai (for Trial Implementation) (Draft for Comments) (the “Rules”). The Rules contain 25 articles and further refine the Measures for the Management of Intelligent Networked Vehicle Testing and Application in Shanghai in various aspects including the definitions, scope of application, administrative agencies and their responsibilities, request and confirmation of pilot operations, and management of pilot operations.
5. Shanghai issued the Measures for the Management of Information Infrastructure in Shanghai (Draft)
On 22 August, the Shanghai Municipal Commission of Economy and Informatization released the Measures for the Management of Information Infrastructure in Shanghai (Draft) (the “Measures”). The Measures consist of 36 articles in 5 chapters including general provisions, the development of information infrastructure, the management of information infrastructure, relevant legal responsibilities, and supplemental provisions. In order to meet the needs of the city’s informatization development, the Measures clarify the responsibilities of all parties in upgrading the energy level of the information infrastructure, emphasize the role of planning for the coordinated development of information infrastructure, and introduce measures to regulate the management of information infrastructure.
Enforcement Developments
1. CAC revealed typical cases of telecom and online fraud against minors
On 8 August, in order to enhance the public, especially minors’ awareness of fraudulent practices, the Cyberspace Administration of China (CAC) detailed several typical cases of telecom and online fraud against minors. At the same time, the CAC demanded website platform operators implement the management rules of information content, establish and improve the mechanisms for account monitoring and alerting and fraud reporting, and carry out security assessments. The CAC also pointed out that relevant enterprises failing to fulfil their risk control responsibilities and resulting in fraud cases would be held liable under the law.
2. CAC cracked down on virtual currency speculation
According to news on 9 August, the CAC has cracked down on virtual currency speculation and managed to close a number of accounts and websites encouraging users to invest in illegal virtual currency trading this year. Under the guidance of the Notice on Further Preventing and Resolving the Risks of Virtual Currency Trading and Speculation, the CAC has been working to supervise and guide major website operators to effectively implement their responsibilities including continued efforts to crack down on virtual currency trading speculation and intensified censoring of content and accounts related to virtual currencies to protect people’s assets.
3. CAC released the filing information about the algorithms for Internet information services
On 12 August, according to the Provisions on the Administration of Algorithm-generated Recommendations for Internet Information Services, the CAC detailed information such as the names and filing numbers about the algorithms that tech companies in China used in their services and published a list of algorithms of the companies as of August 2022. The relevant information can be accessed via the algorithm filing system for Internet information services (https://beian.cac.gov.cn).
On 15 August, the Shanghai Communications Administration reported 6 entities found to have failed to fulfil their management responsibilities of communication network security protection, as well as 22 graded systems of 18 entities that had not implemented the rectification requirements on schedule. The Shanghai Communications Administration demanded the concerned entities implement the rectifications before 15 September 2022. Any failure to implement the rectification as scheduled will result in further actions by the Shanghai Communications Administration in accordance with the law.
5. Zhejiang released ten typical cases of illegal cybercrimes
It was reported on 15 August that the Zhejiang Provincial Public Security Department recently released ten typical cases cracked by its cybersecurity branch involving telecom and Internet fraud, the online black market, illegal intrusion into computer information systems, infringement of personal information, illegal production and sales of spy cameras, and other cybercrimes. In addition, since the 100-day summer campaign to crack down on illegal behaviors and the 2022 special action to “clean up” the Internet were launched, the cybersecurity departments of the public security force have pooled resources to solve a large number of cases of grave concern and with great impact and protect the legitimate rights and interests of the public.
It was reported on 11 August that in order to further prevent and control telecom and Internet fraud and strictly strengthen the source of governance, under the instruction of the Ministry of Industry and Information Technology (MIIT), the Guangdong Communications Administration organized a group of experts to carry out a special inspection on the security management of the IoT SIM cards and SMS ports and the real name registration for mobile users of basic telecom operators in the province. The inspection focused on issues such as the management system, contracts, network admission requirements, channel management, technical level, and uncompleted rectifications and put forward rectification requirements for the problems found in the inspection.
It was reported on 4 August that in order to further prevent and control telecom and Internet fraud and strictly strengthen the source of governance, under the instruction of the MIIT, the Zhejiang Communications Administration carried out a special inspection program on the security management of the IoT SIM card and SMS port of Zhejiang Telecom, Zhejiang Mobile, and Zhejiang Unicom. The program included both self-inspection by the enterprises and on-site inspection by the authority. It focused on the compliance of the admission process and registration information, the technical development, and the monitoring and response mechanisms of each enterprise’s IoT SIM card and SMS port by selectively examining the contracts, simulating the account opening process, and testing on-site before putting forward corresponding rectification advice.
On 14 August, the People’s Procuratorate of Binjiang District, Hangzhou City, Zhejiang Province released the province’s first Guidelines for Reviewing Criminal Cases on Trade Secret Infringement (the “Guidelines”), which provide a set of comprehensive and systematic rules for the review of cases related to trade secret infringement crimes. The Guidelines propose a phased path in case review which calls for the identification of a trade secret before deciding on the infringement and the degree of seriousness. The Guidelines also detail provisions on the key and difficult issues such as the definition of trade secrets, determination of infringement and intent, the threshold of incrimination, and determination of judicial appraisal.
Industry Developments
1. The working group on China’s accession to DEPA was formally established
It was reported on 23 August that the working group on China’s accession to the Digital Economy Partnership Agreement (DEPA) was formally established. The DEPA, initiated by New Zealand, Singapore, and Chile in May 2019 and signed in June 2020, is the world’s first regional agreement on the digital economy. On 1 November 2021, Wang Wentao, Minister of Commerce, filed a formal application to join the DEPA on behalf of China. After careful evaluation, the DEPA decided to set up a working group on China’s accession. According to the Ministry of Commerce, the establishment of the accession working group means that China will fully advance the negotiations to join the DEPA. China’s application to join the DEPA and its active efforts to facilitate the process have reflected China’s willingness to establish an integrated digital trade market with the same rules and compatible standards as DEPA’s members, expand international cooperation in the digital economy, and promote a higher level of opening up.
On 1 August, the Supreme People’s Court released the Judicial Big Data Report on the Characteristics and Trends of Information Network Crimes (the “Report”). The Report begins with an outline of the basic situation and characteristics of information network crimes, pointing out that the number of cases has been on the rise year by year, involving a total number of more than 660,000 defendants in the past 5 years. Among all these cases, cyber fraud cases accounted for the highest proportion (about 40%). The number of assisting cybercrimes also increased drastically by over 17 times of that in the previous year. The Report also provides a detailed analysis of the fraud cases and online gambling cases respectively.
3. CAC released the 2021 Report on the Development of Digital China
On 2 August, the CAC released the 2021 Report on the Development of Digital China (the “Report”). The Report begins with a summary of China’s remarkable achievements in nine fields since the Party’s 19th National Congress including digital technology innovation, digital economy, digital government, digital society, and digital security. The Report then assesses the level of digital development in each region in 2021 and lists the top 10 provinces in terms of their comprehensive digital development level. In the end, the Report looks to the future at the development of digital China in 2022 from ten different perspectives, including digital technology innovation, digital infrastructure construction, digital economy, and digital government.
4. CAICT released the top 10 keywords for Artificial Intelligence in 2022
On 16 August, at the “2022 Trustworthy AI Summit”, He Baohong, Director of the Cloud Computing & Big Data Research Institute of the China Academy of Information and Communications Technology (CAICT), officially released and interpreted the “2022 Top 10 Keywords for Artificial Intelligence”, which were: Big Model, Generative AI, AI4S, Knowledge-Driven AI, Hyperautomation, AI Middle Platform, MLOps, New AI Infrastructure, Enterprise Intelligence, and Trustworthy Implementation.
5. CAICT released the July 2022 Data Report on the Operation of the New Energy Vehicle Industry
On 30 August, the CAICT released the July 2022 Data Report on the Operation of the New Energy Vehicle Industry (the “Report”). According to the Report, in July 2022, China’s new energy automobile sector maintained its high-speed growth momentum, with production reaching a new record, sales remaining at a high level, and market penetration steadily increasing. All these indicate that new energy vehicles have been widely accepted by the market. At the same time, the export of new energy vehicles has grown significantly, with products gaining international recognition at a faster pace.
6. CAICT “2022 Financial Digital Transformation Conference” was held in Beijing
On 16 August, the “2022 Financial Digital Transformation Conference”, was held in Beijing by the CTTL-Terminals of the CAICT. The conference unveiled a number of achievements of the CAICT in the financial digital transformation, such as the IoT-based inclusive and green finance solutions, the financial digital risk control platform and existing user management platform for mobile Internet businesses, and the “micro middle platform” tool for financial digital transformation. According to the CAICT, it will work together with enterprises in the financial industry to create an open, healthy, and secure digital ecology and promote high-quality development of China’s digital transformation.
7. The 2022 World New Energy Vehicle Congress opened in Beijing
On 17 August, the 2022 World New Energy Vehicle Congress (the “Congress”) opened at the Beijing Economic and Technological Development Zone. In the congratulatory letter to the Congress from Premier Li Keqiang, it is noted that China’s new energy vehicle industry has developed rapidly in recent years and has entered a period of full market expansion. In the future, China will continue to deepen international cooperation in the related fields with opening-up efforts and seek to achieve win-win results with all parties. Wan Gang, Chairman of the China Association for Science and Technology and Chairman of the Congress, said that the new problems facing the global new energy vehicle industry included: the need to coordinate and promote the market popularization of new energy passenger vehicles based on users’ needs, to accelerate the electric conversion of commercial vehicles with a focus on hydrogen fuel cells, to build an innovative energy system for vehicles featuring new energy, and to promote a new mode of electrified travel empowered by intelligent networked vehicles.
