But not all data centre players are convinced by the proposed change that comes just two years after the People's Republic of China (PRC) passed a sweeping data privacy law restricting how companies collect, use, and manage personal data.

There’s still a “fear factor” among international and local data centre operators in Hong Kong regarding access by PRC authorities to data, says Timmy Fung, Senior Director, Data Centre Capital Markets, Greater China, JLL.

How this pans out will largely depend on the drafting of the rules, which is anticipated to take months to complete.

From a legal standpoint, however, the concerns over data access and governance appear to be unfounded. The ITIB has reassured Hong Kong residents not to worry about privacy invasion as personal information is protected under strict laws.

“One of the aims of the proposed rules is to facilitate data flowing from Mainland locations in the GBA to Hong Kong, presumably to address current legal restrictions on transferring certain types of data to a place outside the PRC Mainland, including to Hong Kong,” says Dominic Edmondson, Special Counsel, Baker McKenzie, Hong Kong.

“But it remains to be seen whether the new rules are drafted in a way that further facilitates or encourages the flow of data collected or stored in Hong Kong into Mainland areas of the GBA,” he says.