Navigating China’s rules for cross-border data transfers can feel overwhelming, especially as regulations evolve and enforcement increases.
Whether you’re a business leader, compliance officer, or just curious about how personal information moves across borders, understanding China’s Standard Contractual Clauses (SCCs) is essential for operating safely and legally.
Read on to discover what SCC China is, why it matters, and how you can protect your business and your data in 2025 and beyond.
What Are Standard Contractual Clauses (SCCs) in China?
China’s SCCs are official contract templates that set out strict rules for cross-border data transfers. They are designed to protect personal information when it leaves China and to ensure companies meet the requirements of Chinese data protection law.
How China’s SCCs Differ from EU SCCs and Other Models
Unlike the EU’s SCCs, China’s SCCs are mandatory for certain transfers and must be filed with the Cyberspace Administration of China (CAC) before any transfer occurs.
The Chinese SCC template is less flexible, modifications are very limited, and explicitly references Chinese law and allows for regulatory oversight.
Why SCCs Are Important for Businesses and Individuals
SCCs are crucial because they provide a legal mechanism for data exports, reduce compliance risks, and help maintain customer trust.
📖 Also read: Chinese Data Protection Law: Key Facts for Foreign Companies
Why Did China Introduce SCCs?
China introduced SCCs to strengthen personal data protection and to provide a legal pathway for international data transfers.
With the rise of global business and the Personal Information Protection Law (PIPL), SCCs help balance privacy and business needs.
The Background: China’s Data Privacy Laws and the PIPL
The PIPL, introduced in 2021, is China’s main data protection law. It sets strict requirements for collecting, using, and exporting personal information.
The Need for Cross-Border Data Transfers
Businesses often need to transfer data internationally for operations, HR, or cloud services. SCCs make these transfers legal and safe under Chinese law.
Key Goals Behind the SCC China Framework
The SCC framework aims to protect Chinese citizens’ privacy, clarify companies’ responsibilities, and align with international data protection standards while keeping a unique Chinese approach.
Who Needs to Use SCC China?
Not every company must use SCCs, but many do. If you’re a multinational, a Chinese business with international partners, or anyone transferring personal data out of China, SCCs may be required for you to stay compliant.
Clarification on Applicability and Thresholds
SCCs are required for cross-border transfers of personal information by data handlers who are not critical information infrastructure operators (CIIOs) and whose transfers do not exceed the thresholds for mandatory security assessments.
As of 2025, a security assessment is required if, in the previous calendar year:
- The personal information of 100,000 individuals or more is transferred out of China, or
- The sensitive personal information of 10,000 individuals or more is transferred out of China, or
- The data handler is a CIIO.
If you fall below these thresholds and are not a CIIO, you may use SCCs for your cross-border personal data transfers.
Multinational Companies and Data Exporters
Any company with operations in China that sends customer, employee, or other personal data abroad must consider SCCs if they are not subject to a mandatory security assessment.
Chinese Companies Working with International Partners
Chinese firms sharing data with foreign vendors, platforms, or affiliates are also required to use SCCs if they meet the applicability criteria above.
Scenarios Where SCCs Are Required in China
- Sending HR or payroll data to a foreign parent company (below the thresholds)
- Using overseas cloud services (below the thresholds)
- Sharing customer data with external support teams (below the thresholds)
Key Features of China’s Standard Contractual Clauses
China’s SCCs have a strict structure and set clear rules for both data exporters and importers. These clauses outline the responsibilities, security measures, and rights needed to keep personal data safe during international transfers.
Main Requirements and Structure
The SCC template covers what data is transferred, why, how it’s protected, and how long it’s kept. Both parties must agree to follow PIPL standards.
Obligations for Data Exporters and Importers
The Chinese exporter must ensure the data is lawfully collected and inform individuals about the transfer. The foreign importer must agree to Chinese supervision and security standards.
How SCCs Protect Personal Information
SCCs limit the use of data, require strong security measures, and guarantee that people can access, correct, or delete their information.
Step-by-Step: How to Use SCCs for Data Transfers in China
Using SCCs in China involves more than just signing a contract. You must follow a clear process, including filling out the official template, filing with authorities, and making sure your business is always up-to-date on compliance.
When and How to Sign SCCs in China
- Assess your data transfers: Determine if SCCs are required and if you fall below the security assessment thresholds.
- Use the official template: Fill in specific details about the transfer.
- Sign and file: Both parties sign the SCC.
Filing and Approval Process with Chinese Authorities
- Filing timeline clarification: The signed SCC and a self-assessment report must be filed with the CAC within 10 working days after the contract takes effect (i.e., after it is signed by both parties).
- Start of transfers: Transfers can begin after filing, unless the CAC objects or requests corrections. The authorities may request additional materials or clarifications, but there is no formal pre-approval process unless issues are raised.
Compliance Tips for Businesses
Keep records, regularly review transfers, and train staff on SCC compliance.
SCC China vs. Other Data Transfer Mechanisms
There are several ways to transfer data out of China, but SCCs are just one option. It’s important to understand how SCCs compare to security assessments and certifications so you can choose the best approach for your business.
Comparison with Security Assessments and Certifications
Security assessments are mandatory for CIIOs or for data handlers exceeding the volume thresholds mentioned above, and the process is more complex and time-consuming than SCCs.
Certifications are a voluntary mechanism and show compliance but do not replace the need for SCCs or security assessments.
Pros and Cons of Using SCCs for Cross-Border Data Transfers
Pros: Faster and simpler than assessments, government-approved.
Cons: Only for certain transfers, must follow the strict template.
When to Choose SCCs Over Other Options
SCCs are best for routine, small-to-medium data transfers that do not exceed regulatory thresholds and where a straightforward, legal path is needed.
📖 Also read: Legal Clause Templates vs Custom Drafting in China
Common Questions About SCC China
Many businesses have questions about SCC China, from their legal power to how often they must be updated. This section answers the most common concerns and explains what happens if you don’t follow the rules.
Is SCC China Legally Binding?
Yes, once signed and filed, SCCs are legally enforceable in China.
How Often Do SCCs Need to Be Updated?
You must update SCCs if the nature, scope, purpose of transfer, or parties change, or if regulations are updated.
What Happens if You Don’t Follow SCC Requirements?
Non-compliance can lead to fines, business disruption, and reputational damage.
Challenges and Risks with SCC China
Implementing SCCs in China comes with its own set of challenges and risks. Legal complexity, operational difficulties, and data security concerns can all trip up businesses if they’re not careful.
- Legal and Operational Challenges for Businesses: Complex legal language, frequent updates, and monitoring overseas partners can be difficult.
- Data Security and Privacy Concerns: Ensuring your foreign partners protect data as required by Chinese law is critical.
- How to Avoid Common Mistakes: Use the latest templates, work with legal experts, and train your staff.
📖 Also read: Differences Between Western and Chinese Contracts
Practical Tips for Implementing SCCs in China
To make SCC compliance easier, it’s smart to follow best practices, work closely with legal teams, and use the right tools and resources. These tips help ensure your business stays on the right side of Chinese regulations.
Best Practices for Drafting and Negotiating SCCs
Stick to the official template, clearly define transfer details, and make sure everyone understands their roles.
Working with Legal and Compliance Teams
Involve legal teams early, assign compliance responsibilities, and conduct regular audits.
Tools and Resources to Stay Up-to-Date
Monitor CAC updates, subscribe to legal news, and attend compliance webinars.
Conclusion
SCC China is now a cornerstone for legal, secure cross-border data transfers. Whether you’re a multinational, a Chinese tech company, or a growing startup, understanding and following these rules is essential for protecting your business and your customers.
For personalized legal advice on SCC China or any other legal issue in China, consider reaching out to Choi & Partners, trusted experts in Chinese law and cross-border compliance.
Frequently Asked Questions About SCC China
How much does data cost in China?
The cost of data in China depends on several factors, including the type and volume of data, storage requirements, and the level of security and compliance needed.
For businesses, significant costs often come from ensuring compliance with Chinese data protection laws such as SCC regulations, which may involve legal consultations, system upgrades, and staff training.
Additionally, using secure cloud storage or cross-border data transfer services can add to the expenses. Investing in proper compliance measures is essential to avoid hefty fines or operational disruptions.
What is the purpose of the standard contractual clauses?
The purpose of Standard Contractual Clauses (SCCs) in China is to provide a legal framework for the secure transfer of personal data out of the country.
SCCs ensure that personal information receives the same level of protection abroad as it does within China, in line with the Personal Information Protection Law (PIPL).
They clearly define the responsibilities of both the data exporter and the overseas recipient, including security measures and rights for data subjects. By using SCCs, businesses can demonstrate their commitment to data privacy and reduce legal risks.
What are the different types of contracts in China?
China recognizes a range of contract types, including sales contracts, service agreements, employment contracts, and licensing contracts, each with its own legal requirements and implications.
Standard Contractual Clauses (SCCs) are a specialized form of contract specifically for cross-border data transfers under Chinese data protection law. Understanding the differences between contract types is crucial for ensuring legal compliance and protecting your business interests.
What are standard payment terms in China?
Standard payment terms in China often include advance payments, payment upon delivery, or payment within 30 to 60 days after the invoice date, depending on the industry and the parties’ agreement.
It’s common for Chinese businesses to negotiate flexible terms, especially in new or international relationships. Clear and well-drafted contracts help avoid misunderstandings and disputes over payment schedules. Always confirm payment terms in writing to ensure both sides have the same expectations.
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