The European Union and China launched the first discussions under a new system that aims to streamline cross-border data flows, the EU said in a statement on Wednesday.

The mechanism aims to facilitate international transfers of non-personal data for European businesses while ensuring their compliance with Chinese data laws.

"A significant part of the EU-China foreign direct investment stock depends on companies’ ability to manage their data across borders. This is particularly relevant for sectors such as finance and insurance, pharma, automotive, and information and communication technology," the EU said.

Last year, after co-chairing an EU-China High-level Digital Dialogue, the EU had expressed concern about China's data laws, including their "lack of clarity" and the "long processes" that companies have to undergo.

(Reporting by Charlotte Van Campenhout; Editing by Sharon Singleton)