Liberalization of cross-border data flows

The World Bank estimates that the digital economy accounts for 15% of global GDP, outpacing the traditional economy in annual growth by a factor of 2.5 over the past 10 years. Today, countries are striving to balance the requirements for data circulation in order to eliminate unnecessary barriers. For example, in November 2024, China launched an international initiative facilitating cross-border data flows.

Experience of China

The draft Global Cross-Border Data Flow Cooperation Initiative envisions the following objectives:

1) Prohibition to discriminate against countries when regulating cross-border data transfers.

2) Prohibition to use by a state any security measures to protect data restrictions or requirements as a pretext for restricting data flow into the territory of that state.

3) Cooperation on personal data protection.

4) Mutual recognition of standards in the field of data protection.

5) Definition of closed lists of data types for special regulation.

6) Definition of conditions for a healthy competitive environment in the field of data circulation. For example, the development of regulatory measures for digital platforms that prevent monopolization of the digital services market based on the accumulation of large data sets.

7) Support of developing countries in the digitalization of their economies, for example through technical assistance.

8) Identification of data mishandling practices.

China expects the International Initiative to ensure free circulation of data not only from China, but also from third countries to China. Thus, China ranks first in terms of e-commerce market volume, outpacing the United States by 2.2-fold. China is also actively developing data-driven technologies: China's share in global funding of AI startups hits 48%.

Russia’s experience

In Russia, cross-border transfer of personal data is limited by the requirement to notify Roskomnadzor in advance of data transfer to third countries. Roskomnadzor can decide to restrict data transfers, but the criteria under which such a decision can be made are not disclosed. In terms of the China Initiative principles, such risky regulatory measures could be seen as a means of arbitrarily restricting data transfers to China.

From the monitoring issue No. 11, November 2024. Download the full issue (PDF) · issue page at the Gaidar Institute