Germany, China sign joint declaration on car data sharing

(Reuters) -Germany and China have signed a joint declaration to cooperate on autonomous and connected driving which Germany hopes will enable carmakers to transfer data from China to Germany, a contentious topic for foreign businesses in China.

The two countries will work together to develop shared standards and rules for how to manage the data generated as companies develop autonomous driving, a move which Germany's auto association VDA said would save resources in development and production.

The statement comes amid growing concern from the EU and U.S. over the possible security risk of Chinese technology entering their markets and collecting data locally, with Washington opening a probe in February on possible national security risks from Chinese vehicle imports.

Yet European business leaders - including Volkswagen's China chief - have expressed frustration over restrictions by China on data transfer from China back to Europe, which are significantly more limiting than European regulations on data transfer from Europe to China.

China has strengthened its oversight over data management within the country and most industries must apply for permission before data can be transferred abroad.

Last year, authorities tightened data rules for the auto industry and proposed to ban smart vehicles in China from transferring data directly abroad, pushing them instead to use domestic cloud services.

However, Chinese regulators have since indicated a softening on their stance as firms complained about a lack of clarity and how onerous and disruptive the laws could be to their businesses.

The declaration will provide a space for further discussion on the topic, Germany's statement said, highlighting that there was not yet consensus and advocating for "tangible improvements for German and EU companies in this area".

Self-driving cars collect masses of data both on passenger and driver behaviour, and the car's surroundings via lidars and sensors. Cars are also collecting increasing amounts of data on drivers via links to their phones and other devices.

(Reporting by Victoria Waldersee, Sarah Marsh in Berlin; Brenda Goh in Shanghai; Editing by Rachel More and Chizu Nomiyama)