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Business trends

China's strict new cybersecurity law ensnares Japanese companies

Regulators scrutinize privacy safeguards and data localization

Japanese companies doing business in cities like Shanghai that lack sufficient protections for user data may face fines or worse.   © Photo by Yusho Cho

TOKYO -- China's tough new cybersecurity legislation is causing headaches for Japanese companies doing business there as authorities demand more protections for customer information and look to keep data within the country.

"There have been a number of cases where Japanese companies' bases in Shanghai or Guangzhou have been raided by authorities," said Li Tianyi, vice president at a Chinese unit of Internet Initiative Japan. Li, a consultant, reports being approached by many businesses for advice on how to manage customer data, for example, after regulators demand an inspection.

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