Agreement with China: car data agreement causes cabinet dispute

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How to deal with China? This question is increasingly preoccupying Europe and the Federal Republic of Germany. While China is demonstrating its power and its claims more and more clearly, the desired "de-risking" has so far only worked to a very limited extent. For years, China's strategy towards Europe has been characterized by getting individual actors to cooperate and deliberately punishing others – and thus calling into question the unity that has been established in the EU and the German government in internal negotiations, some of which have lasted for years. This is one of the reasons why there was so much excitement after Digital Minister Volker Wissing (FDP) signed a Memorandum of Understanding (MoU) with the director of the People's Republic of China's Cyberspace Administration during a visit to China on Wednesday.

Need for discussion with China and within the German government

Its content: a dialog format is to be established in which issues relating to the flow of data between the two countries are to be discussed. This primarily concerns automated and connected driving - now that more and more cars from Chinese manufacturers are being sold on the European and German markets, many questions arise: Who has access to which data? Where may or must it be stored? As a company, the manufacturers are subject to Chinese law and are therefore obliged to cooperate with the security authorities. As a supplier to Europe, however, European law also applies. The two are hardly compatible with each other, which is why it is only a matter of time before major problems arise here too. In the worst-case scenario, Chinese manufacturers would no longer be able to offer their cars in the EU. It is also unclear whether the vehicles sold would still be usable.

After the signing, Wissing was accused of not having coordinated his steps with the other federal government departments. Handelsblatt quoted Jens Zimmermann, digital policy spokesperson for the SPD parliamentary group in the Bundestag, as saying: "Wissing is a 'loose canon' when it comes to China." Criticism also came from the Greens and from Wissing's own parliamentary group. Even Federal Chancellor Olaf Scholz (SPD) criticized Wissing after the agreement. "The things we do are based on the principle of agreeing things together and agreeing that things actually happen," said the Chancellor on Friday on the sidelines of the European Council on the new EU Commission in Brussels. However, he added: "In this respect, it is regrettable that this did not happen here. But we still have a clear strategy."

BMDV rejects criticism

Wissing's ministry rejected the criticism: the declaration of intent was the result of a cooperation agreement with China on autonomous driving - which was signed in the presence of the Chancellor in April. The draft had been sent to other departments at an early stage and had been available since May. According to the BMDV, what it contains is an implementation within the framework of the adopted China strategy, as pursued by the "specialist ministries within the scope of their responsibilities". CDU foreign affairs politician Norbert Röttgen was quick to sharply criticize the Chancellor and Minister: Scholz was acting as if dependence on Russia had never existed - and Wissing was turning himself into a lobby representative for a few large companies, Röttgen said in social media postings.

Wissing's solo effort has no direct consequences for data issues

Wissing is repeatedly perceived as an advocate of Chinese interests – for example, in the debate on whether Chinese network equipment suppliers can remain in the German telecommunications network. Here, the sovereignty over the decision lies solely at the federal level – in contrast to the debate surrounding the Memorandum of Understanding. It is questionable whether Wissing's MoU has any relevance at all. The ministry is aware of this: "A concrete agreement on how the data transfer will be organized is expressly not linked to this," the BMDV announced on Friday.

Apart from talks, there are hardly any concrete options for action for Wissing – because other players are primarily responsible. As soon as personal data from vehicles is involved, the European General Data Protection Regulation applies. This sets high hurdles for the transfer of data from EU residents to third countries. The People's Republic, on the other hand, has a relatively new data protection law, parts of which are almost copy and pasted from the GDPR.

However, following the decisions of the European Court of Justice on EU-US data transfers, there is no possibility of an adequacy decision by the EU Commission in the foreseeable future, which would contain a general authorization for the transfer of personal data to the People's Republic. This is because neither the Chinese security regulations nor the legal remedies available in China come close to the level of protection required for such a decision. The jurisdiction of the People's Republic is not free and independent in its decisions for systemic reasons. The Dutch data protection supervisory authority is responsible for the Chinese e-car manufacturer BYD, UEFA sponsor of the European Football Championship, as BYD's European headquarters are located there.

The obligation to cooperate with security authorities and the lack of judicial quality are also obstacles when it comes to non-personal data that is to be processed via data brokers: The Data Governance Act, which was only passed in the last EU legislative period, also regulates such data transfers by law. Here too, the requirements for general permission are comparatively high and cannot currently be met by China. In addition, there are the obligations arising from the Data Act, which will apply as EU law from September 12, 2025 - for example, regarding the exportability of data and the ability to migrate between cloud providers. Wissing's BMDV is currently working on a draft for accompanying legislation in German law.

(usz)