China wants in on digital economy pact, pledges global collaboration

Beijing has formally applied to join the Digital Economy Partnership Agreement, which currently includes Singapore, New Zealand, and Chile, paying China is ready to work with other nations and deepen digital collaboration.
Written by Eileen Yu, Senior Contributing Editor

China has formally applied to join the Digital Economy Partnership Agreement (DEPA), pledging to work with all parties to drive the "healthy and orderly" development of digital economies. The global partnership pact currently covers Singapore, New Zealand, and Chile, with others such as South Korea and Canada expressing interest in joining the agreement. 

In force since 7 January 2021, DEPA establishes common digital trade rules and seeks to drive interoperability between different regimes and digital systems of participating nations. 

Under the agreement, businesses in Singapore, New Zealand, and Chile can achieve greater efficiencies, trust, and reduced costs when trading and conducting digital transactions with one another, said Singapore's Ministry of Trade and Industry. For example, digital identities could be mutually recognised, mechanisms would be developed to secure personal data transferred across borders, and common e-invoicing standards could be adopted to reduce processing time.  

Canada and South Korea have began exploratory discussions to join the trade pact. 

China now "stands ready" to collaborate in the development of digital economies, said President Xi Jinping, in his address Saturday via video at the first session of the 16th G20 Leaders' Summit. "China attaches great importance to international cooperation on digital economy and has decided to apply to join DEPA," Xi said.

The country's Ministry of Commerce on Monday confirmed it filed a formal application to join DEPA, sending a letter to New Zealand's Minister for Trade and Export Growth, currently the depositary of the agreement. The Chinese ministry said the application was in line with Beijing's direction of "further deepening domestic reform and expanding high-level opening up". 

In his speech, Xi said innovation was a significant enabler of economic and social development, and urged G20 members to collectively "unleash" the potential of innovation-driven growth. "Draw up rules based on extensive participation and broad-based consensus to foster an enabling environment," he said. "Forming exclusive blocs or even drawing ideological lines will only cause division and create more obstacles, which will do no good but only harm to scientific and technological innovation."

Adding that digital economy was an important frontier of scientific and technological innovation, he noted that G20 should "shoulder responsibilities" in the digital era and accelerate the development of new types of digital infrastructure. Members also should drive deeper integration of digital technologies with the economy and help developing nations plug the digital divide. 

Xi said China might discuss and develop international rules for digital governance that "reflect the will and respect the interests of all sides". It also would actively foster an "open, fair, just, and non-discriminatory environment" for digital development, he said. 

It is unclear, however, how DEPA potentially can be aligned with China's Personal Information Protection Law (PIPL), in particular, the latter's rules on cross-border data transfers.  Effective since November 1, 2021, the PIPL details rules around how data is collected, used, and stored, and includes data processing requirements for companies based outside of China. 

The new legislation encompasses a chapter that applies specifically to cross-border data flow, stating that companies that need to move personal information out of China must first conduct "personal information protection impact assessments". They also will need to obtain separate consent from individuals pertaining to the transfer of their personal information and meet one of several requirements. These include agreeing to a "standard contract" issued by authorities overseeing cyberspace matters and fulfilling requirements outlined in other laws and regulations established by the authorities.


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