The New Chinese Encryption Regime: Towards A Sustainable Approach

With the coming into effect of the new PRC Encryption Law on January 1, China is moving steadily to develop and implement an encryption regime that protects core state security interests, while allowing businesses that do not implicate state security to create, trade and use encryption relatively freely. Additionally, it appears that restrictions on foreign investment in the encryption sector and the deployment of foreign encryption technologies, products and services in Mainland China are to be relaxed. The expectation is that the new regime will be rolled out on a phased basis in 2020.

The Standing Committee of the PRC National People's Congress passed the PRC Encryption Law on October 26, 2019 and government authorities were required to issue amendments to existing encryption regulations and rules by January 1, 2020. On December 30, 2019, however, the State Cryptography Administration (SCA) and other PRC authorities issued two administrative notices regarding the