Global law firm retreats from China ahead of data crackdown

afr.com:

Global law firm Dentons is splitting from its Chinese operations to comply with impending data regulations in one of the more significant withdrawals by a Western company as Beijing intensifies a campaign to curb leakages of valuable information.

Dentons, a law firm with partners from the US to Europe, is separating this month from its mainland arm in response to government mandates that tighten cybersecurity and data handling. Partner Beijing Dacheng Law Offices will gain full independence to serve domestic clients, Dentons said in a memo to clients.

Banking in particular is considered one of the more sensitive sectors to new data laws.  Mark Schiefelbein

The global agency is the latest Western firm to resort to drastic measures to comply with sweeping restrictions on the handling and transfer of data within and beyond China that will take effect later this year.

Among other things, Beijing’s new data security regime gives President Xi Jinping’s administration the power to shut down or fine companies that leak or mishandle sensitive information. Penalties include fines and suspensions.

Xi’s administration has tightened control over the hoard of information produced by the nation’s companies, considered critical for steering the economy as well as future technologies such as AI.

But the broad and vague nature of new regulations has spurred concerns about compliance, and the penalties for falling short. Morgan Stanley, for one, is shifting more than 200 technology developers — about a third of the tech cohort — out of mainland China after the country tightened access to troves of data stored onshore.

Every business has been forced to weigh the costs of complying with cybersecurity and data security laws with the benefits