China Regulatory Brief: New Cybersecurity Law, Regulation for Bike Sharing

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Language for China’s new cybersecurity law amended before enforcement

Changes to the language of China’s new cybersecurity law, which will come into force on June 1, could implicate a wider range of products and services, and provide the government with access to foreign companies’ sensitive data and technologies.

The law will necessitate many companies to store information within mainland China. Companies storing information via cloud computing may need to use domestic cloud computing services.

The government has chosen to go ahead despite more than 50 trade associations and chambers of commerce signing a petition calling for a delay passing the law. They argued that the law could affect billions of dollars of cross-border trade and lock out foreign cloud operators because of limits on how they operate in the country.

The law will also introduce a mechanism that will allow the government to oversee cybersecurity, implement a multi-layered cyber protection scheme, a security review of network products and services, and a security assessment for cross-border data transmission.

China to open oil and gas exploration to private sector

China has announced plans to open oil and gas exploration to the private sector, allowing foreign companies access to a previously state monopolized industry. Qualified entities that operate in a protective and sustainable way will be permitted to engage in the industry.

The reform was made with the aim to make the industry more competitive, improve resource allocation, and ensure national energy security.

China National Petroleum Corp. (CNPC), China National Offshore Oil Corp. (CNOOC), and China Petroleum & Chemical Corp. (Sinopec) form the ‘big three’ firms, accounting for 99 percent of the oil and gas market.

In 2015, China allowed private oil refineries to directly import crude oil, and increased the quota later in 2016. Petrol and diesel prices will become more market oriented, only being interfered by the state when price fluctuations occur.

China has set aims for domestic crude oil output to increase to 200 million tons by 2020, with natural gas to increase beyond 360 billion cubic meters by the same year.

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New regulation for bike sharing apps

China has issued its first set of regulations for the country’s bike sharing industry.

Customers registering to use bike sharing apps and platforms are now required to use their real identities, and must be over 12 years of age.

In addition, users must be insured against personal accidents and third person liabilities. Illegal acts and uncivilized behavior while using the vehicles will be noted on users’ personal credit records.

The law also requires that bike sharing companies introduce mechanisms to oversee the management of deposits paid by users, and strongly encourages companies not to require deposits at all.

It also discourages the use of shared electric powered bicycles. This could be because transportation law maintains that any motorized vehicle is classed in the same category as motorcycles and cars.

China’s bike sharing industry took off in 2016, with around 30 new firms sporting a variety of colors to distinguish their bikes from the next. Giants Ofo and Mobike still maintain greater shares of the market.


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Dezan Shira & Associates is a full service practice in China, providing business intelligence, due diligence, legal, tax, IT, HR, payroll, and advisory services throughout the China and Asian region. For assistance with China business issues or investments into China, please contact us at or visit us at

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