China Cybersecurity Law
CSL
Chinese law requiring critical information infrastructure operators to store personal information and important data within China.
Overview
The China Cybersecurity Law (CSL), enacted in 2016, represents a pivotal moment in China's approach to digital infrastructure regulation and national data sovereignty. Developed in response to increasing cybersecurity threats and the rapid expansion of digital technologies, the law replaced fragmented previous regulations with a comprehensive framework for protecting critical information infrastructure (CII). Unlike Western data protection models that emphasize individual privacy, the CSL prioritizes national cybersecurity interests and state control over digital assets. The law mandates that critical infrastructure operators maintain strict data localization requirements, ensuring that sensitive personal and operational data remains within Chinese borders. This approach fundamentally transforms how data centers operate in China, particularly in strategic sectors such as telecommunications, energy, finance, transportation, and government services. The CSL's most significant impact is its dual-layered compliance mechanism. Data centers must simultaneously maintain advanced cybersecurity protocols and implement rigorous controls preventing unauthorized data transfers. Enforcement is robust, with penalties reaching up to 5 million RMB or 5% of annual revenue for serious violations. This creates a comprehensive regulatory environment that goes beyond traditional cybersecurity standards, effectively integrating national security objectives with technological infrastructure management. Since its implementation, the CSL has driven substantial infrastructure investments, compelling major cloud providers and data center operators to establish dedicated domestic facilities and implement sophisticated security measures. The law distinguishes itself by explicitly linking cybersecurity requirements with broader industrial policy objectives, positioning China's digital infrastructure as a strategic national asset.
Key Requirements
Critical Information Infrastructure Designation and Registration
Data centers supporting CII operators must first identify whether their services fall under the CSL's definition of critical infrastructure, which includes telecommunications networks, energy systems, finance, transportation, water, and government services.
Operators must register with the Cyberspace Administration of China and relevant sector regulators, providing detailed network topology, data flows, and security architecture documentation.
Failure to properly register or misclassifying infrastructure status can trigger enforcement actions and operational disruptions.
Mandatory Data Localization for Personal Information and Important Data
All personal information collected from Chinese residents and data classified as 'important data' by sector regulators must be stored on servers physically located within mainland China and cannot be transferred abroad without explicit security assessment and approval.
Data centers must implement technical controls preventing unauthorized data export, including network segmentation, encryption key management within China, and audit logging of all data access and movement.
This requirement fundamentally restricts cloud providers' ability to replicate data to offshore disaster recovery sites without additional government authorization and security certification.
Real-Name User Registration and Identity Verification
Internet service providers and platforms hosted on CII-designated data centers must implement real-name registration systems requiring users to provide identity documents verified against national databases.
Data centers must provide infrastructure supporting this authentication system and maintain records of user identities linked to account activities.
This requirement extends data center responsibilities beyond infrastructure provision into identity management and surveillance support.
Security Assessment and Vulnerability Management
Data centers supporting CII operators must conduct annual security assessments by qualified third-party assessment organizations approved by the Cyberspace Administration, testing network resilience, access controls, encryption implementations, and incident response capabilities.
Results must be reported to sector regulators, and identified vulnerabilities must be remediated within specified timeframes.
Data centers must maintain continuous vulnerability scanning, patch management programs, and security testing documentation demonstrating ongoing compliance throughout the year.
Cross-Border Data Transfer Security Assessment
Any transfer of important data or personal information across borders requires submission of security assessment reports demonstrating encryption, transfer controls, recipient security measures, and necessity justification to relevant authorities.
Data centers facilitating international operations must implement technical controls logging all cross-border data movement, maintaining audit trails for regulator review.
The assessment process typically requires 30-60 days review time, making real-time disaster recovery or cloud failover to international sites non-compliant without pre-approval.
Network Operator Security Obligations and Access Controls
Data centers must implement granular access control systems limiting employee and contractor access to systems and data, with multi-factor authentication for administrative functions and segregated management networks.
All privileged account activities must be logged and audited; access must be revoked immediately upon employee termination.
Data centers must maintain documented security policies, employee training records, and background screening documentation demonstrating personnel security compliance with CII requirements.
Encryption and Cryptographic Key Management Requirements
All sensitive data at rest and in transit within CII-designated networks must be encrypted using approved cryptographic algorithms (Chinese SM2, SM3, SM4 standards are increasingly mandated for sensitive applications).
Encryption keys must be generated, stored, and managed within China without reliance on foreign key management services.
Data centers must maintain cryptographic inventories documenting all encryption implementations, key rotation schedules, and backup key storage procedures compliant with national standards.
Incident Response and Reporting Obligations
Data centers must establish incident response teams, maintain detailed response procedures, and report security incidents affecting CII to the Cyberspace Administration within specified timeframes (typically within hours for critical incidents).
Data centers must preserve forensic evidence, conduct root cause analysis, and provide incident reports including attacker tactics, compromised data scope, and remediation actions taken.
Major incidents may trigger third-party forensic investigations conducted by government-approved firms.
Who Uses & Why
The China Cybersecurity Law applies mandatorily to data centers hosting critical information infrastructure (CII) operators across multiple sectors. Mandatory compliance is triggered when a data center serves entities in telecommunications, power generation, financial services, transportation, water utilities, or government agencies. Foreign data center operators face additional compliance challenges. They must establish Chinese subsidiary entities, appoint local legal representatives, and create mainland data centers with Chinese staff managing infrastructure. Parent company compliance is not sufficient; each entity bears independent regulatory responsibility. Compliance becomes optional but strategically beneficial for data centers serving international or non-CII customers. Organizations should carefully assess whether their customer base includes any services that might trigger CII-related requirements, such as payment processing, government procurement, or critical infrastructure management. Geographic considerations are crucial. Special economic zones and free trade zones receive no CSL exemptions, though some may offer streamlined assessment processes. The most cost-effective approach involves integrating CSL requirements during initial facility design, as retrofitting existing infrastructure is significantly more expensive and disruptive.