China TMT: Bi-monthly Update - November and December 2024 Issue

This newsletter summarises the latest developments in Technology, Media, and Telecommunications in China with a focus on the legislative, enforcement and industry developments in this area.

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Key Highlights

In November and December 2024, relevant authorities focused on key sectors such as artificial intelligence (“AI”), smart cities, and basic telecommunications, introducing a series of policies and measures aimed at empowering industrial innovation through technology and digitalisation. These efforts further promote the intelligent transformation and upgrading of industries. At the same time, the relevant authorities continue to strengthen legislation and enforcement regarding the protection of minors online, ensuring their legal rights and interests are upheld:

• AI: The National Technical Committee 260 on Cybersecurity of Standardization Administration of China (“TC260”), the National Intellectual Property Administration, and the Ministry of Industry and Information Technology (“MIIT”) are accelerating the standardisation of AI applications. They guide companies in improving security emergency response systems and have been providing guidelines for patent applications related to AI. Furthermore, national and local cyberspace administrations (“CAC”) have utilised measures such as algorithm filing, service registration, and administrative penalties to urge companies to regulate the provision of generative AI services.
• Smart Cities: The State Council and Shanghai Municipal Government, among other departments, have recently issued a series of guiding opinions and implementation plans aimed at promoting the intelligent development of urban infrastructure and enhancing AI applications in key sectors such as finance, manufacturing, and healthcare to build smart cities. Additionally, the municipal governments of Beijing and Hefei have introduced regulations to regulate the technological innovation, road testing, and demonstration applications of intelligent connected vehicles, thus promoting the growth of the intelligent connected vehicle industry.
• Basic Telecommunications: Authorities continue to promote the openness of telecommunications services and the development of international digital trade. There are plans to gradually expand the scope of foreign access to value-added telecommunications services, allowing foreign enterprises to apply for and operate telecommunications businesses in pilot areas in Shanghai. Additionally, the Haikou International Communication Access Administration is officially beginning construction, with the three major telecom operators actively deploying and advancing development in this area, thus facilitating the internationalisation of China’s digital industry.
• Protection of Minors: The CAC continues its efforts to combat unlawful activities that harm minors’ rights and interests, aiming to effectively curb the spread of harmful and illegal content, thereby safeguarding minors’ mental and physical well-being. In addition, the CAC and TC260 have issued a series of guidelines requiring App distribution platforms and other related entities to strictly implement “juveniles’ mode”, actively preventing and intervening in minors’ addiction to the Internet.

Follow the links below to view the official policy documents or public announcements.

Legislative Developments

1. The Anti-Unfair Competition Law was being revised to explicitly require the improvement of the regulatory system for unfair competition in cyberspace (21 December).

The Standing Committee of the National People’s Congress was reviewing the Anti-Unfair Competition Law (Revised Draft), aiming at further regulating unfair competition behaviour and promoting and protecting a market environment of fair competition. The revised draft strengthens the governance of behaviours such as commercial bribery, unfair competition in cyberspace, false advertising, and improves the regulations for the supervision and punishment of unfair competition. In terms of improving the regulatory system for unfair competition in cyberspace, the revised draft stipulates that platform operators shall lawfully specify the rules of fair competition within the platform in platform service agreements and transaction rules. Such entities are also prohibited from engaging in unfair competition practices such as malicious transactions using data and algorithms, technology, platform rules, etc.

2. TC260 was planning to release guidelines to guide entities such as generative AI services providers in conducting security emergency response work (17 December).

The TC260 was soliciting opinions on the national standard the Practice Guidelines for Cybersecurity Standards - Guidelines for Security Emergency Response for Generative Artificial Intelligence Service Providers, aiming to provide guidance for companies offering generative AI services to effectively respond to security emergencies, enhancing their ability to handle cybersecurity incidents. The standard outlines the classification and grading methods for security incidents related to generative AI services and specifies the security incident emergency response process, which includes emergency preparedness, monitoring and early warning, emergency response, and post-event review and improvement phases.

3. CAC released guidelines requiring the establishment of a mobile Internet mode for minors to prevent and intervene in minors' Internet addiction (15 November).

The CAC issued the Guidelines for the Construction of Juvenile Modes of Mobile Internet, aimed at guiding relevant entities to actively explore and promote the construction of juvenile modes. The guidelines set specific requirements for the construction, operation, and management of juvenile modes for three types of entities: mobile smart terminals, mobile Internet applications, and mobile Internet application distribution platforms. These requirements include regulations on usage duration, age-appropriate content recommendations, and function restrictions management, aiming to prevent and intervene in minors’ Internet addiction.

4. TC260 was planning to release guidelines, detailing the technical requirements for juvenile modes on the mobile Internet (18 December). 

The TC260 was soliciting opinions on the Practice Guidelines for Cybersecurity Standards - Technical Requirements for Juvenile Modes on the Mobile Internet, aiming to guide relevant parties in the development and application of juvenile modes. These guidelines are intended to provide guidance on the development and application of juvenile modes, detailing the technical requirements that mobile smart terminals, applications, and mobile application distribution platforms should adhere to when developing and applying juvenile modes. It also requires collaboration among the parties in terms of functional applications, mode security, personal information protection, and other aspects to ensure the effective implementation of juvenile modes.

5. SAMR issued interim measures to establish a mechanism for law enforcement cooperation in online transactions (20 December)

The State Administration for Market Regulation (“SAMR”) issued the Interim Measures for Law Enforcement Cooperation in Online Transactions, aiming to further implement the requirements for law enforcement cooperation and establish a mechanism for law enforcement cooperation in online transactions. These measures clarify the scope, subjects, content, and objects of law enforcement cooperation, requiring platform operators to provide relevant information about operators within the platform and related transaction information as requested by the market supervision department. This document will come into effect on 20 January 2025, with the goal of better regulating the order of online transactions.

6. National Intellectual Property Administration issued the trial guidelines, clarifying the standards for patent applications related to AI (31 December)

The National Intellectual Property Administration issued the Guidelines for Patent Applications Related to Artificial Intelligence (Trial), providing standards for intellectual property applications in new fields and new business forms such as AI. These guidelines categorise AI patent applications into four types: AI algorithms or models themselves, functional or domain-specific applications based on AI algorithms or models, inventions assisted by AI, and inventions generated by AI. Additionally, the guidelines address key legal issues in this field, including the eligibility of inventors, object standards, disclosure requirements, and ethical issues, etc.

7. Beijing issued regulations, standardising autonomous driving vehicle technology innovation and road testing activities (31 December)

Beijing issued the Beijing Autonomous Driving Vehicle Regulations, aiming to standardise and promote the innovation and application of autonomous driving vehicles. These regulations regulate the specific requirements for conducting activities such as autonomous driving vehicles technology innovation, road testing, and demonstration applications within Beijing. Regarding road testing, the regulations specify the application process and requirements for conducting road testing and demonstration application activities. Furthermore, the regulations also involve management provisions for autonomous driving vehicles, including requirements for hanging or displaying the corresponding licenses and appointing safety personnel, etc.

8. TC260 released guidelines to assist companies in reasonably setting up a one-click stop collecting data outside the vehicle function (19 December)

The TC260 issued the Practice Guidelines for Cybersecurity Standards - One-Click Stop Collecting Data Outside the Vehicle, aiming to guide companies in effectively setting up a one-click stop collecting data outside the vehicle function for intelligent connected vehicles to avoid collecting important data and sensitive personal information. The guidelines provide the process for stopping the collection of data outside the vehicle and require the setting of status indicators to help sensitive area managers accurately identify the vehicle data collection status, in order to maintain data security and public interests.

9. National Cryptography Administration was planning to issue regulations to standardise the use of commercial passwords for critical information infrastructure (15 November)

The National Cryptography Administration was soliciting opinions on the Regulations on the Use of Commercial Passwords for Critical Information Infrastructure, aiming to standardise the use of commercial passwords. The regulations require operators of critical information infrastructure to report annually to relevant authorities on the use of commercial passwords in the previous year. The regulations also specify requirements for commercial passwords in terms of technology, products, data security, personal information protection, security assessments, and other aspects to safeguard the security of critical information infrastructure.

10. State Taxation Administration was planning to issue regulations to standardise the tax-related information reporting obligations of Internet platform Enterprises (20 December)

The State Taxation Administration was soliciting opinions on the Regulations on the Tax-Related Information Reporting Obligations of Internet Platform Enterprises, to further regulate the behaviour of Internet platform enterprises in reporting tax-related information. The reporting regulations clearly stipulate the identity information and income information that Internet platform enterprises need to submit to the competent tax authorities and specify the obligations of Internet platform enterprises to report and properly store tax-related information for operators on the platform. Enterprises are responsible for the truthfulness and accuracy of the tax-related information they submit.

11. TC260 proposed two standards, aiming to implement security requirements for e-government information and wireless network access (2 December)

The TC260 was soliciting opinions on two national standards named Cybersecurity Techniques - Guidelines for Implementation of Internet Electronic Government Information Security Part 1: General Principles and Information Technology - Security Techniques – Cybersecurity, Part 6: Wireless Network Access Security. The first guideline specifies requirements for the reference model, technical system, implementation framework, and the use of encryption in Internet e-government cybersecurity. The second guideline focuses on wireless network security, detailing security threats, requirements, controls, and design techniques, further enhancing network security maintenance.

12. Ministry of Finance and relevant departments issued basic guidelines, aiming to standardise companies' sustainable disclosure criteria (20 November)

The Ministry of Finance and relevant departments issued the Guidelines for Enterprise Sustainable Disclosure - Basic Guidelines (Trial), aiming to standardise the disclosure of information on company sustainability and promote the practice of sustainable development principles. This document sets out general requirements for the disclosure of sustainable information by companies, including key aspects such as disclosure goals, information quality, and disclosure elements. For instance, the sustainable information disclosed by companies should cover four core elements: governance, strategy, risk and opportunity management, as well as indicators and targets. The release of this document will advance the sustainable development of the economy, society, and environment, contribute to the development of a social sustainable disclosure framework, and regulate companies’ sustainability information disclosure.

13. Hefei issued regulations to clarify provisions on road testing, traffic violations, and accident handling to promote the innovative development of intelligent connected vehicles (24 December)

Hefei issued the Regulations on Promoting the Application of Intelligent Connected Vehicles, aimed at standardising and promoting the innovative development of intelligent connected vehicles to enhance the level of governance in smart cities. The regulations require companies to apply for approval from relevant authorities before conducting road tests or demonstration applications of intelligent connected vehicles. They also mandate strengthening remote dynamic supervision of vehicles and promptly handling emergencies. Additionally, the regulations specify the allocation of responsibilities and liabilities in the event of traffic accidents. For instance, if an intelligent connected vehicle commits a traffic violation, the driver will be held accountable in according with the laws; if there is no driver present, the vehicle owner and operator will be held responsible. These regulations are set to be enforced starting from 1 February 2025, aiming to provide legal protection for the innovative development of intelligent connected vehicles and enhance the governance of smart cities and the level of social traffic safety.

Enforcement Developments

14. CAC Launched special action on algorithm governance, targeting six typical issues with algorithms on online platforms (24 November)

The CAC organised a special action under the initiative “Clear and Bright Action: Governance of Typical Algorithm Issues on Online Platforms”, focusing on addressing key issues where algorithms harm users’ legal rights and interests. The CAC highlights major areas of concern for algorithm governance: “information cocoons”, ranking manipulation, rights of workers in new forms of employment, promoting positive algorithms, and ensuring the implementation of algorithm security responsibilities, etc in this action. The CAC also calls on companies to self-assess the compliance of their algorithms in accordance with the relevant laws and regulations and promptly rectify any illegal or non-compliant practices.

15. CAC intensified efforts to address financial information chaos online, imposing penalties on unqualified websites and accounts engaged in financial activities (11 December)

The CAC continued its efforts to address financial information chaos on the Internet, taking measures such as clearing illegal traffic-driving information and dealing with non-compliant websites and accounts. These actions aim to combat illegal financial activities conducted through Internet platforms. The CAC urges the public to adopt proper investment concepts, improve their ability to discern risks, and avoid engaging in illegal financial activities. The CAC also announced plans to strengthen future efforts to tackle financial information chaos online and regulate the dissemination of financial information.

16. CAC published the ninth batch of deep synthesis service algorithm filing information, guiding providers and technical supporters to filing in compliance (20 December)

The CAC published a batch of deep synthesis service algorithm filing information, revealing the names of companies, algorithm titles, application products, and their main uses. The CAC reminds companies that have not yet filed their algorithms to comply with the Provisions on the Administration of Algorithm-generated Recommendations for Internet Information Services and complete their filing procedures, including necessary updates or cancellations.

17. SAMR announced seven typical cases of unfair online competition, encouraging businesses to self-regulate network competition behaviour (30 December)

The SAMR released a set of typical cases related to unfair online competition, further standardising such practices and maintaining fair market competition. Enforcement agencies have imposed penalties on violators in accordance with the Interim Provisions on Anti-Unfair Competition on the Internet and the Anti-Unfair Competition Law, including orders to cease unlawful activities, eliminate their impact, and impose fines. Violating companies used tactics such as obstructing other operators’ legal services through technological means, commercial defamation, and false advertising. The SAMR urges companies to learn from these cases and compete within legal boundaries.

18. Shanghai CAC published information on generative AI service registrations, with 63 registered services (30 December)

The Shanghai CAC published updated information on generative AI service registrations, with an additional 9 newly registered services, bringing the total to 63. In accordance with the Interim Measures for the Management of Generative AI Services, generative AI services that directly invoke registered models via APIs or other means, and which provide services with public opinion or social mobilisation capabilities within China, must be registered with the relevant cyberspace administrations.

19. Nanchang CAC imposed penalties on a generative AI service company for poor content review and failure to comply with responsibility requirements (2 December)

The Nanchang CAC imposed an administrative penalty on a generative AI service company, ordering it to shut down related services and rectify issues within a specified period. The investigation reveals that the company fails to fulfil its primary responsibilities of online platforms, particularly in content review, which leads to the generation of illegal content by its AI operations.

20. CAC published a batch of typical cases harmful to minors' mental and physical health, involving seven types of violations, including the display of illegal and harmful content in juvenile mode (19 December)

The CAC reported a batch of typical cases that impacted minors’ mental and physical health, continuing its enforcement of online protection for minors. The illegal activities are diverse, including the covert distribution of soft pornography content involving minors and the generation of harmful content using new technologies. The CAC has taken legal action against the involved entities, imposing administrative penalties to curb the spread of illegal and harmful information and safeguard minors’ well-being.

Industry Developments

21. State Council and other departments issued opinions, clarifying the empowerment of transport development through data and technology and accelerating the construction of a unified and open transport market (23 December)

The State Council and other departments issued the Opinions on Accelerating the Construction of a Unified and Open Transport Market, aiming to speed up the establishment of such a market. Specifically, the document calls for deepening reforms in key transport sectors and improving the transport market system. In addition, the opinions clearly emphasise optimising the allocation of resources within the transport market, advancing the empowerment of transport development through data and technology. The proposed supporting measures include accelerating the construction of the national comprehensive transport information platform, establishing and improving data security management systems, and advancing data classification management.

22. State Council and other departments issued opinions, calling for the integration of new-generation information technology with urban infrastructure construction (6 December)

The State Council and other departments issued the Opinions on Promoting the Construction of New Urban Infrastructure to Build Resilient Cities, aiming to promote the development of new urban infrastructure that is digital, networked, and intelligent, enhancing cities’ capacity for risk prevention and governance. The opinions focus on smart construction and highlight tasks such as the renovation of municipal infrastructure, the improvement of urban information model platforms, and the establishment of urban operations management service platforms. The goal is to build a set of high-level resilient cities by 2030.

23. People's Bank of China and other departments jointly issued an action plan, emphasising the strengthening of data and network security protection to promote the high-quality development of digital finance (27 November)

The People’s Bank of China and other departments jointly issued the Action Plan for Promoting the High-Quality Development of Digital Finance, aiming at driving the high-quality growth of the digital economy. The action plan calls for a systematic advancement of the digital transformation of financial institutions and the use of digital technologies to enhance the quality and efficiency of financial services in key sectors. Additionally, the plan stresses the need to continuously improve the governance framework for digital finance, strengthen data and network security protection, and solidify the foundation for the development of digital finance. 

24. Shanghai allowed foreign companies to apply for value-added telecommunications business licences in the Lin-gang area and other regions, further expanding the pilot scope for the opening-up of value-added telecommunications services (25 November)

Shanghai launched a pilot project to expand the opening-up of value-added telecommunications services, allowing foreign companies to apply for permits to independently operate Internet data centres and engage in online data processing and transaction processing services in the Shanghai pilot zones. The pilot areas include the Lin-gang New Area of the Shanghai Pilot Free Trade Zone and regions leading the construction of socialist modernisation. This initiative removes the previous equity restrictions for foreign companies involved in value-added telecommunications services, aiming to significantly promote the prosperous development of China’s digital industry.

25. Shanghai issued an implementation plan, proposing to accelerate the deployment of world-class AI industrial clusters and promote the AI-driven transformation of Shanghai (27 December)

Shanghai issued the Implementation Plan for AI-Driven Transformation of Shanghai, aiming to create a world-class AI industrial cluster and build an AI “highland” in Shanghai. The plan calls for continuous strengthening of foundational capabilities, accelerating the integration of AI with technologies such as intelligent terminals, scientific intelligence, and autonomous driving. Furthermore, the plan emphasises the promotion of AI applications in key vertical sectors such as finance, manufacturing, education, and healthcare, to accelerate the intelligent transformation of these industries.

26. Haikou launched the construction of the International Communication Access Administration, advancing the opening-up of telecommunications services, cross-border data flow, and international digital trade (2 November)

The launch ceremony for the Haikou International Communication Access Administration was held in Haikou, aiming to advance the opening-up of telecommunications services, cross-border data flow, and the development of international digital trade in an orderly manner. The International Communication Access Administration serves as an interconnection point between domestic and overseas telecom operators, primarily facilitating interconnectivity and data exchange. Relevant telecom operators are also actively establishing a presence, with approval granted for the setting up of International Communication Access Administration in Hainan. All parties plan to collaborate in advancing the construction of digital technology infrastructure and other key sectors, contributing to the development of Hainan’s digital economy.

27. Beijing SAMR and other departments issued guidance, explicitly calling for the promotion of high-quality development in the digital advertising industry (20 November)

The Beijing SAMR and other departments issued the Guidance on Promoting the High-Quality Development of the Digital Advertising Industry, aimed at upgrading and enhancing the digital advertising industry in Beijing and strengthening its international competitiveness. The guidance encourages companies to develop digital technologies such as big data and cloud computing, research large-scale model services, and build an innovative development system for the digital advertising sector. It also stresses the need to improve service quality in the industry and promote its international expansion. In addition, the guidance calls for the improvement of the regulatory system, the protection of intellectual property in digital advertising, and the strengthening of compliance within digital advertising companies.

28. National Data Bureau published the first batch of typical cases for the construction of Digital China, covering data infrastructure, digital technology innovation, digital government, digital economy, and digital society (27 November)

The National Data Bureau released the first batch of 50 typical cases for the construction of Digital China, reflecting the practical achievements of recent years. These cases focus on key areas such as digital technology innovation, data infrastructure development, digital economy growth, and the construction of a digital society, marking the continued deepening of China’s digital transformation and smart city development efforts.

29. MIIT established the Artificial Intelligence Standardisation Technical Committee to further promote the standardisation of the AI industry (31 December)

The MIIT established the Artificial Intelligence Standardisation Technical Committee in Beijing. This committee is the first of its kind formed by the MIIT, with its main responsibilities including revising industry standards for the AI sector and advancing the standardisation of the AI industry.