Li Chaoying: Opportunities of strengthening the supervision of data security protection outweigh challenges, especially for the industry of medical big data technologies

Security and compliance have always been the lifeline and bottom line of Yidu Tech. With the increasing global attention to the development of the digital economy and the establishment of relevant initiatives in China’s 14th five-year plan (“the Plan”), the government has recently promulgated and implemented a series of laws and regulations related to data security and protections. The digital economy and data security have become a critical topic in the process of China's economic transformation and upgrade.

Yidu Tech recently hosted the 2021 AI in Healthcare Seminar, in order to better explore the potential value of healthcare AI and to share the Company’s latest developments. During the seminar, Mr. Li Chaoying, Founding Partner of Han Kun Law Offices,shared his opinions about recent regulatory trends for data security protection and risk management. He believes that China has an inherent advantage in industries related to medical big data technology. Despite the tightening supervision, it presents to the industry as both opportunities and challenges. Competence to manage data compliance risks for businesses in the industry can be enhanced by strengthening their own compliance management.

The key messages of Li's speech are as follows:

China’s inherent advantages in medical big data technology-related industries

The State Council has continuously promulgated regulations and guidance to promote the standardization of healthcare big data applications. Following the top-level design, various ministries and commissions, including the Ministry of Industry and Information Technology of PRC and the National Medical Products Administration, are taking actions to accelerate the adoption and applications. Benefiting from China’s continuous emphasis on innovation-driven growth at the state-strategy level, investments and industrial developments have been keen to focus on relevant areas, which provides an inherent advantage and a good foundation for the development of the medical AI and big data technology industry.

Opportunities and challenges of compliance for the medical big data technology-related industries

China has been actively building and improving the legislative system on data and cybersecurity, which is a privilege for the development of the medical AI industry. As medical and health data is deemed as a kind of national fundamental strategic resources, the general office of the State Council has issued a series of specific regulations on data ownership identification, data circulation, transaction, and related property right protection. The National Health Commission has also issued relevant service specifications related to big data standards and security.

The essence of the healthcare industry is about treatment and wellbeing for people’s health. Under the constraints of relevant laws and regulations, China would support and encourage the development and applications of medical data. Those applications in the healthcare sector can contribute to the general improvement of medical diagnosis level, reduce costs and improve efficiency and people’s livelihood, which are expected to receive more policy and regulatory support. As one of the most fundamental industries related to people’s livelihood mentioned in the Plan, medical treatment is also a key focus area of the country’s overall goals from now to 2035.

Admittedly, there have been some incidents involving medical AI data security in recent years. However, this will not hinder the overall development of the industry. With the strengthening of supervision and punishment of companies with unlawful behavior and the resultant rectification of the industry, the related industries will achieve long-term and stable development and will deliver a greater value in the areas of medical treatment and people’s livelihood.

Controllable data compliance risk for the medical AI industry

Compliance risk management refers to how to achieve compliance, and develop orderly and healthily on the basis of compliance. According to the current data classification and grading standards in China, medical data is in the middle layer, which is different from top sensitive information involving state secrets. It is allowed to be developed and utilized on a regulated basis, which is also in line with the direction of industry development encouraged by China.

The relevant regulations and standards issued successively are guiding and standardizing all aspects of medical data development and utilization, such as data collection, storage, use, processing, transmission, provision and disclosure. Enterprises in all industries must ensure compliant governance at every step, for innovative developments to be sustainable, to the benefit of people’s livelihood.

Data’s cross-border transmission will be the next focus of China’s regulation, and is one of the key concerns for the medical AI and big data technology industries in particular. At present, China is soliciting opinions from various parties on several laws and regulations related to this area and is expected to issue them soon to provide clearer guidance for the international development and cross-border financing of companies in the industry.

Mr. Li Chaoying, Founding Partner of Han Kun Law Offices, has been practicing law for over 25 years. He has received several honors and awards and has been rated as the top lawyer in the categories of Asia, China, Company and Private Equity numerous times. He was selected as one of the top 1,000 foreign lawyers by the Ministry of Justice of the People’s Republic of China in 2018. In addition, he has published dozens of academic papers both internationally and in Mainland China, Taiwan, and Hong Kong.