The Impact of Cross-Border Data Regulation on the Resilience of China’s Industrial and Supply Chains

Abstract

Digital transformation has created huge economic benefits for cross-border data flow around the world, but it has also caused real problems such as violating privacy and leaking business secrets. For China, how to manage data well and maintain the stability of the industrial supply chain is a difficult policy problem in the negotiation of international rules. This article analyzes two opposite effects of cross-border data regulation. On the one hand, strict regulatory review and uncertain policy results will increase the compliance burden of enterprises. This will lead to the interruption of information exchange in the supply chain, which will weaken the ability of the supply chain to recover from the shock. On the other hand, if the regulatory framework is stable and predictable, mutual trust can be established between enterprises, which will help improve the adaptability of the supply chain. Whether regulatory rules are beneficial to the supply chain or harmful to the supply chain depends on two practical conditions: first, whether domestic rules are in line with international norms, and second, the degree of dependence of the industry on data resources. Combined with the experience of the three-stage reform of China's data outbound management and the actual cases of logistics and digital trade industries, this article believes that policymakers should no longer be entangled in the simple debate of "should be relaxed or tight" the rules, but should focus on establishing institutional interoperability. Specifically, a practical balance between data supervision and supply chain resilience can be found by unifying negative lists, promoting mutual recognition of regulators, and introducing business continuity assessment tools.