BPO Firms in India & China Face Challenges From New Privacy Laws

China and India are two popular destinations for outsourced business processes. Recent developments in the legal and regulatory environments in both countries might make it difficult for BPO firms to operate, particularly those that involve sensitive data such as contact details and personal information.
Draft Privacy Regulations in China Will Require Explicit Consent from Source

Privacy and intellectual property are highly valued concepts in the west, but the same might not be the case elsewhere. Consider the notoriety of China for reverse-engineering devices (even cars!) and getting away with mass-producing cheap knockoffs. This has gone to the extent that the Chinese are sometimes accused of economic espionage.

To help improve the business environment, legislators have been moving for laws that will better protect intellectual property, as well as privacy. Chinese legislators plan to address this with the introduction of new data security regulations that seek to enforce stricter controls over how to handle personal data, to wit:

* Organizations that manage personal data are required to keep such confidential, and will need explicit consent from the owner before this data is shared or divulged to another party.
* Specific restrictions will apply to collection, processing, use, transfer and maintenance of personal information.
* These principles will also apply to personal data on computer networks, and not just data in digital storage media or hard copy.
* Personal information cannot be exported unless given express permission by authorities or the law.

But given strict requirements, the question here would be whether the proposed rules might actually end up harming the thriving outsourcing industry that relies on foreign contracts for survival. These draft regulations are actually stricter than their US and EU counterparts.
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