Book Review: ‘China and the International E-commerce and Digital Trade Law’– David Markus

This is a review of Dr. Jie (Jeanne) Huang’s China and the International E-commerce and Digital Trade Law: the case of the Comprehensive and Progressive Trans-Pacific Partnership (University of International Business and Trade Press, August 2022, Beijing China, ISBN: 9787566323989, 262,000 words). Dr Huang is an Associate Professor at the University of Sydney Law School, specializing in conflict of laws and digital trade. She is the Co-chair of the American Society of International Law Private International Law Interest Group and Co-Director of the Centre for Asian and Pacific Law at the Sydney Law School. 

Dr Huang’s book, ‘China and the International E-commerce and Digital Trade Law: the case of the Comprehensive and Progressive Trans-Pacific Partnership’ is invaluable to stakeholders who are interested in E-commerce and Digital Trade (EDT) with China.  It is also a very useful resource for diplomats and delegations involved in free trade negotiations as it simplifies the four key areas where the PRC has provided simplification of its national and provincial frameworks to assist in navigating complex rules. 

The book follows the recent Chinese Measures for the Supervision and Administration of Online Transactions promulgated by the State Administration for Market Regulation on 15 March 2021 (“China EDT Measures), available in Chinese and English, and their implications.  The Book compares the e-commerce/digital trade chapters in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) and United States-Mexico-Canada Agreement (“USMCA”) with the Regional Comprehensive Economic Partnership (“RCEP”) and other free trade agreements concluded by China and discusses the impact of these rules on relevant Chinese domestic laws and development strategies.

During a panel discussion I moderated about Dr Huang’s new book for the Centre for Asia Pacific Law and the China Studies Centre at the University of Sydney in October 2022, my first question to the panel was “What does E Commerce and Digital Trade mean to you?”  What I noticed in this discussion was that that EDT meant different things for different stakeholders: for policy makers it was about “FTAs”, for entrepreneurs it was about “Multi modal transport and integrated track and trace”, for the IT community it was about “servers and platforms”, and for governments like China it was about “data sovereignty” and “jurisdiction”.  

Huang rightly points out that the “Brussels Effect” or the notion of globalised regulation of data protection such as baselining to frameworks like the European General Data Protection Regulation (“GDPR”) is not possible when we look at the China EDT Measures: the very notions underpinning EDT such as privacy and personal jurisdiction under Chinese law are very “territorially based”.  The effect, she argues, is that we cannot assume the same rules apply to the same FTA transactions.  To support this, she provides examples of the 2012 Tencent v Qihoo  case (which is not available in English but discussed here) and the 2014 Rockwool case (similarly unavailable in English but see its discussion further in Huang (2019)), where a third party contracting to assist both companies enlivened jurisdiction of Chinese courts as the third parties were located in China.  Huang also compares this approach against the Australian Valve Corporation case where the Australian court did not ask ‘where is the server located’ in order to have jurisdiction, but rather where Valve was ‘carrying on business’ as well as the volume of accounts located in Australia (as stated in paragraphs 189-205 at first instance and upheld in paragraphs 140-153 of the appeal).  

Huang thereby provides us with an interesting reconceptualization of China’s EDT law affirming an “externalization of domestic law” approach. It is the same long-arm jurisdiction we see in EDT, privacy and cybersecurity which allows us to understand the increasing trends in applications of Chinese domestic law to parties located outside China.

One of the key ‘wins’ of Huang’s analysis is that there is a more reasonable “middle ground” approach to compliance which she highlights may be useful for foreign companies who provide EDT to Chinese citizens.  This is due to the existence of an exemption for such foreign e-commerce businesses from local registration requirements with the State Administration for Market Supervision (“SAMR”).  This discussion is very useful to allowing foreign e commerce providers to grasp and engage with the EDT measures thereby unlocking greater value in their global supply chains. 

Perhaps this ability to navigate the EDT Measures is what allows us to understand the significance of Huang’s “externalisation of domestic law” approach in China as it applies to other areas of technology, privacy, and trade. This method of rationalisation of EDT with reasonable exemptions for foreign companies may prove invaluable in shaping interoperability (rather than Brussels Effect harmonisation) in the field of EDT in the years to come.  

In turn, this would allow cross border trade and compliance to piece together more seamlessly without the need to avoid FDI in China due to differences in laws. It is this very thesis of Huang’s book which delivers both comfort and value to the EDT compliance frameworks in understanding and bringing together differences in frameworks between East-West so as to ensure companies and governments can operate with mutual respect in the field of EDT. 

What should not be overlooked is whether this trend of rationalisation of the “externalisation of domestic law” through national standards will repel or attract FDI, and whether the similar ‘middle ground’ concessions for foreign companies will dispel any angst in the international community that compliance with long-armed data sovereignty will unravel efforts at effective cross border trade. 

David Markus is a senior risk and compliance manager.  He is an adviser to the United Nations Centre for Trade Facilitation and E Business (UN/CEFACT) based in Geneva on Sustainable Value Chains in the Circular Economy.  He has consulted on Information Communications Technology & Privacy for United Nations Economic and Social Commission for Asia Pacific (UNESCAP) based in Bangkok. The views in this article are those of the author and do not in any way represent the views of any organisation.  This review is published under a Creative Commons License and may be republished with attribution.