In his latest policy address 2022 (the “Policy”), Chief Executive John Lee emphasized the importance of transforming Hong Kong into a smart city that improves the quality of life of Hong Kong citizens.  The Policy alludes to, amongst others, the “open[ing]-up” of data—meaning that the HKSAR Government encourages private and public enterprises to utilize the benefits of data as a driver for innovation and growth.  Furthermore, the Hong Kong SAR Government is committed to exploring ways to facilitate data transfer from the Mainland to Hong Kong to promote the coordinated development of smart cities within the Greater Bay Area (“GBA”). 

 

The Institute of Big Data Governance (iBDG) has been advocating for setting high standards on data governance in facilitating cross-border data transfer so as to build Hong Kong into a regional data hub.  iBDG is particularly excited to see the HKSAR Government committed to facilitating cross-border data transfer between the Mainland and Hong Kong in this Policy Address.

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In order to protect national interests and personal data privacy, Mainland China has been active in promulgating a spate of measures that regulate cross-border data transfer, including the recently-enacted Measures for the Security Assessment in September 2022. Due to the highly-integrated nature of the GBA cities, the movement of information across Hong Kong and Mainland borders would determine the future of the digital and physical economies within this region.  We believe that a seamless yet safe movement of digital information would allow businesses and consumers of both regions to access the best available technology and provide an essential bulwark conducive to collaborative and innovative development.  The well-governed free flow of data across borders benefits industries ranging from financial services to healthcare to manufacturing to the overall economy.  The secure and dependable data transfer of a region of over 90 million residents will create a “rising tide lifts all boats” as the old saying goes. 

 

It is our firm belief that for the GBA cities to develop as an integrated unit, businesses across both sides of the borders must have access to reliable and continuous digital sources strategically interwoven throughout the data lifecycle and supported by regulatory endorsement.  Routine business activities, from providing goods and services to managing workforce to maintaining a dependable supply chains, require the data transfer among strategic locations within the GBA.  In addition, as the Internet fueled the growth and success of many digital endeavors, businesses on both sides of the borders now have access to millions of potential customers and can expand based on the quality of their offerings, unimpeded by geographic limitations. 

 

Despite the myriad benefits of making data accessible, there is an obvious peril in letting data flow freely without proper governance and safety measures.  A lack of robust technical and regulatory safeguards will only limit the long-term ability of companies to safely process, store, and access information while compromising data security and personal privacy, dampening users’ trust to rely on the best available technologies. “At iBDG, we recognize that security and privacy safeguards are of utmost importance.  But these concerns need not be the enemy of the free flow of data – we therefore advocate a risk-based, industry-backed certification regime that promotes data passage within the GBA regions while ensuring the adequacy of protection.  We strive to work with industry veterans to create a path forward by highlighting existing privacy and security rules that can be implemented at scale and propose new mechanisms to facilitate cross-border data transfers between Hong Kong and the GBA,” said Allen Yeung, founding Chairman of iBDG.

 

Technological advances and an increasingly integrated economy have brought us to an uneven regulatory crossroads.  Since the dawn of the tidal wave of digital disruptions on a global scale, access to data has always been a critical component of innovation.  We remain optimistic about the future shared economic growth fueled by an increasingly interconnected digital economy at the GBA.  Ideally, this would be supported by regulatory frameworks that encourage collaboration by joining the digital borders for Hong Kong and Mainland businesses of all sizes, driving innovation, subsidizing jobs, research, and other innovation initiatives.  Our Institute will continue to work with all stakeholders, seek out the opportunities presented by this critical juncture, and map out a path toward prosperity.

 

Institute of Big Data Governance

October 20, 2022