Germany, China sign declaration on data sharing

BERLIN (Reuters) - Germany and China have signed a declaration of intent on how to discuss cross-border data transfer, a further step towards carmakers being able to transfer data to Germany, a German minister said on Wednesday.

Transferring data outside of China is a contentious issue for foreign firms operating there. The EU and US are concerned about the possible security risk of Chinese technology entering their markets and collecting data locally.

The Memorandum of Understanding, signed by Germany's minister for digital affairs and transport and the director of China's Cyberspace Administration, follows a cooperation deal between the two countries on autonomous driving in April.

German minister Volker Wissing said it was essential for data to flow as freely as possible while taking into account privacy and security interests and the joint declaration provided the basis for a mechanism for dialogue.

"We are creating a continuous exchange and a common understanding of the data policy legal framework between the two countries," he said in a statement.

Chinese regulators have indicated a softening of their stance after last year tightening data rules for the auto industry by proposing to ban smart vehicles in China from transferring data directly abroad.

Self-driving cars collect a mass of data both on passenger and driver behaviour, and the car's surroundings.

(Reporting by Madeline Chambers, editing by Thomas Seythal)