In a relatively short time autonomous vehicles have gone from a flight of fancy to a fully anticipated event. It is no longer seen as a futuristic concept but increasingly real as governments are passing regulations and in even clearer statement of intent by allocating funds in preparation for driverless cars. For many it is seen the next major manufacturing revolution which will likely transform the global automotive industry. The World Economic Forum estimates the digital transformation of the automotive industry will generate US$67 billion in value for the sector and US$3.1 trillion in societal benefit.
Automakers around the world are planning to launch semi-autonomous vehicles by 2020 and have fully autonomous vehicles on the road by 2030. It is estimated that by 2035, in China alone, there will be approximately 8.6 million autonomous vehicles on road, which will be broken down into 3.4 million fully autonomous vehicles and 5.2 million semi-autonomous vehicles. 
A crucial piece of technology in driverless cars is high-definition maps or HD maps. The digital maps used in navigation devices and mobile phones today are relatively simple as they are primarily created for humans who are able to understand and follow simple instructions as they navigate. However, autonomous vehicles, machines and robots require a much different type of map purposely built for robotic systems before they can take control of the steering wheel.
However, creating HD maps is not only a technological challenge. A far greater challenge (especially for international companies wishing to access China’s auto market) will be government regulation.
This article focuses on the legal challenges facing market players including international companies in developing HD maps for autonomous vehicles in China as well as current market practices and our predictions for trends in China’s regulatory policy going forward.
What is a High Definition Map?
HD maps usually refer to maps particularly created for self-driving purposes. In order to allow semi-autonomous and fully autonomous vehicles (levels 3, 4 and 5) to safely operate on the road the vehicles must have built in technological capabilities to guide, brake, change lanes, use built-in cameras and sensors to avoid collisions and rely on artificial intelligence to analyze and adapt to new circumstances as they are shown in real-time HD maps.
The HD maps are not a static map of the past but are essential for fully autonomous vehicles which rely upon them to make real-time decisions. For this reason HD maps require far greater precision to centimeter-level accuracy unlike traditional GPS maps which are only accurate within five to ten meters. Such HD maps can even track weather through sensors on windscreen wipers and elsewhere. In addition to being an accurate snapshot of the geographic location the HD maps will also need to interact with billions of 3D points collected by LIDAR technology (i.e. laser based radar). This data allows the system to replicate the road surface and also capture details such as slope and curvature of the road. This will allow autonomous vehicles to understand and respond to real-time events such as traffic, construction work, accidents, lane closures, weather and other events that can impact the journey.
Naturally the amount of data required to create HD maps is massive. Automakers and mapmakers are using multiple cars to drive on the same road and aggregating the obtained data. For this reason data mass will be crucial. The more cars on the road, the more data is collected and the higher the quality of the HD maps.
General Legal Challenges in Creating HD Maps
Similar to other maps, regardless of form or nature, HD maps are strictly regulated by the laws of the relevant jurisdiction being mapped. This is particularly so in China where mapping activities are strictly regulated due to issues of national security, concerns over demarcation of borders, state secrets and privacy.
China has for this reason traditionally regulated the collection, preservation, ownership, usage and export of geospatial data very tightly.
Compounding the legal complexity in respect of HD maps is the gap between technological development and lagging regulation and policies.
China has also been taking steps to improve privacy protection for its citizens. In this regard China may follow in part the example of the European Union which has taken a very restrictive position on data collection and analysis. The European Union’s rules limit the ability of companies such as Google from collecting data in respect of road conditions and mapping street views. This is due to concerns that personal information in unencrypted wi-fi networks will be swept up as part of an overall data collection. The European Union has fined Google on several occasions, demanded copies of its data and placed limits on the material collected. China has a complex relationship with Google. In 2010 after Google refused to comply with Chinese censorship policies the China National Administration of Surveying, Mapping, and Geo-Information (NASG) denied Google’s application to provide online mapping services. Accordingly Google will need to find a solution for its relationship with China or be potentially excluded from the world’s largest automotive market.
It will be difficult to balance protection of privacy and national security on the one hand and the desire to stimulate autonomous technology on the other hand. Different stakeholders will have very different interests and it may take time before the dust settles.
Overview of the Regulatory Framework in China
The activities for creating HD maps by using high-resolution LIDAR to detect the location of the surroundings and cameras to constantly scan streets, buildings and other objects that can be “seen” or “perceived” by the sensors or to record GPS coordinates clearly fall within the ambit of China’s regulations on surveying and mapping.
There are a number of legal hurdles to overcome in order to develop HD maps under the current China legal regime:
1. License is a Must
The current PRC Surveying and Mapping Law requires surveying and mapping in China be carried out exclusively by entities holding a license issued by the relevant governmental authority. In respect of electronic navigation maps, a license is required to be issued by NASG (“ENM License”).
In 2016, NASG issued an official notice (“2016 NASG Notice”) which specifies that the autonomous map is a new type of electronic navigation map and data collection, editing, processing and production of autonomous driving maps can only be handled by an entity holding an ENM License. The 2016 NASG Notice further specifies that when an ENM License holder cooperates with automakers in developing and testing maps for autonomous driving, the ENM License holder must separately conduct the surveying and mapping.
In the market the ENM License has the reputation as being a “gold key” for mapmakers in China due to the difficulty in obtaining one. At present, only 14 Chinese entities have been granted an ENM License. NavInfo, in which Tencent is the second largest shareholder, is the first to have obtained the ENM License back in 2001 and DiDi, China’s largest ride-hailing company, is the 14th entity to obtain an ENM License which was issued in late 2017.
This license regime means currently in China only these 14 entities are permitted to produce autonomous driving maps (i.e. HD maps). Some observers have commented that DiDi’s obtaining of an ENM License is a sign that the Chinese government is relaxing the requirements in respect of the issuance of such licenses but only time will tell if this is the case.
2. Security and Secrecy requirements
China has very strict secrecy requirements in respect of sensitive geographic information. Key requirements under China’s current regulatory regime are as follows:
- Public maps cannot be accurate beyond 50 meters. This requirement makes it difficult to develop the accuracy required for HD maps which require extreme precision (i.e. at the centimeter-level). Autonomous vehicles will not be able to operate safely with such lack of precision. In the market, there are suppliers already able to graph roads down to within several centimeters in accuracy.
- Public maps cannot present the attributes of the height, width or weight limits or slope of key bridges or the attributes of height and width of key tunnels. In addition, the maximum longitudinal gradient and minimum curvature of express ways, elevated roads, ramp ways, streets and internal roads are not permitted to be made public. These restrictions will make it impossible to compile sufficient information required for HD maps.
- Navigation products including electronic navigation maps, navigational software and devices shall not have, by text or database, any function-option that displays, records or stores any basic geographic data involving State secrets (e.g. coordinates or elevation). Again this data is key for HD maps and therefore these prohibitions present a major challenge to creating HD maps in China.
- Technical spatial processing must be carried out for electronic navigational maps prior to publication, sales, distribution and usage. Data of an electronic navigation map that has not been gone through the said technical process will be treated as State secrets at the “confidential” level. Under PRC State secrets law, there are three levels of State secrets – top secret, confidential and secret – a failure to observe the confidentiality requirements in respect of a State secret can lead to severe administrative penalties and even criminal liability.
- State secret cases are serious matters. The Yunan provincial geographic bureau investigated Coca-Cola for having illegally surveyed part of the province by using handheld GPS equipment on its trucks. Coca-cola maintained that the tracking was only done for logistics purposes. In 2010 the Beijing No. 1 Intermediate People’s Court sentenced Dr. Xue Feng, a naturalized American citizen to eight years prison for purchasing commercial information on oil wells in China which was considered to be a state secret. 
- Map approval process. Under China’s current regulatory system electronic navigation maps must be examined and approved by NASG or the local authority at provincial level before publication or display. This also extends to any update on the content presented within such maps or any change as to the data range or any conversion of data type. In all these cases re-approval must be obtained from the authority.
This examination and approval process will be unworkable for HD maps as they will be updated in real time as large amounts of data collected by the sensors of the autonomous vehicles will be constantly uploaded.
3. Legal restrictions on foreign investment
Given the political sensitivities and the practical restrictions it is not surprising that surveying and mapping is a restricted area for foreign investment. According to the 2017 Foreign Investment Catalogue, foreign investors can only set up joint ventures with Chinese partners to engage in surveying and mapping. In these joint ventures the Chinese partners need to be the controlling shareholders. The shareholding ratio in such joint ventures generally has the Chinese partner holding at least 51%.
Further the PRC Surveying and Mapping Law which was also revised in 2017 states that foreign entities or individuals involved in surveying or mapping must cooperate with China departments or entities to ensure no involvement of State secrets or issues in respect of Chinese national security.
Similarly foreign investment in internet mapping services is also restricted to joint ventures with Chinese partners. The foreign investor shareholding in such joint venture cannot exceed 50% if the joint venture will apply for a license for Internet mapping services only. Currently around 300 Chinese entities have obtained the Internet mapping services with A or B class license issued by NASG or the local authority at the provincial level.
The holder of A class license for Internet mapping services is entitled to provide a full scope of services including (i) map search, location services, (ii) geographic information mark services, (iii) map downloading and reproduction services, and (iv) map sending and reference services. A holder of B class license is not entitled to provide services outlined in (iii) and (iv) above.
A number of Sino-foreign joint ventures have obtained licenses including Microsoft (which it inherited from Nokia) and General Motors (Shanghai OnStar).
However, it should be noted that foreign investment in creating electronic navigation maps is prohibited. Accordingly foreign investment is not permitted even if surveying and mapping joint ventures are allowed. This may explain recent reports of foreign automakers facing restrictions in China when “driving around China making photos and recording GPS coordinates” as these activities may be considered as activities relating to the creation of electronic navigation maps.
In addition, map data generated from autonomous driving technology testing or road testing (including adding more data, elements or accuracy to traditional electronic navigation maps) must be kept in accordance with secrecy requirements in relation to surveying and mapping and shall not be provided or shared with foreign entities, individuals or foreign invested entities (including wholly foreign owned entities or joint ventures).
At present it is not fully clear how companies will charge for maps. Given the costs it is likely that at some stage the HD maps will be provided on a subscription basis. In such case the HD maps would likely fall within the scope of Value Added Telecom Services which again is subject to restrictions on foreign investment.
Market Practice in China
As surveying and mapping is highly regulated under the current China legal regime international companies will need to carefully review their plans to ensure compliance with local regulations.
A number of international automakers and mapping firms are in practicing adopting an “OEM model” or forming partnerships with Chinese mapping firms in order to tap into the China market.
Option 1: OEM Model
Traditionally, navigation systems installed in new vehicles are ordered from system developers by vehicle OEMs. In such case the base map data is directly procured by the OEMs from the map data supplier (“First OEM model”) or the system developer processes the base map data and supplies custom-made vehicle specific “mapping data and navigation application” which can be installed on new vehicles (“Second OEM model”).
NavInfo’s collaboration with Tesla and BMW are typical case studies under the First OEMs model. NavInfo provides Tesla and BMW with its base map data information (such as road surface information, and POI data etc.), for Tesla and BMW to process and develop their own unique in-vehicle navigation system on top of the base map data information. Therefore, the ultimate user interface of the navigation system presented to the end user (driver) will be different for Tesla and BMW, although both vehicle manufacturers did procure their original base map data information from the same mapping firm.
For vehicle manufacturers which are concerned about brand image the First OEM model offers greater flexibility in designing a user interface and experience.
AutoNavi on the other hand adopts the Second OEM model in its collaboration with Cadillac in China. Under this arrangement AutoNavi provides Cadillac with a complete package of the custom-made navigation system rather than only being a supplier of the base map data. Under the Second OEM model mapping firms are involved in the design and creation of the in-vehicle navigation systems and contribute to the development of a user friendly interface.
Option 2: Partnership with Chinese Mapping Firms
In July 2017, TomTom and Baidu made a public announcement to form an alliance in the development of HD maps. Pursuant to this Baidu will leverage TomTom’s HD map-making platform combined with its artificial intelligence capabilities to improve HD map-related technologies as they are utilized in China. The alliance brings TomTom a global mapping company together with Baidu a major mapping service provider in China. The goal is to create a “globally unified HD map services” for OEMs.
Similarly, NavInfo and HERE have established a 50:50 Sino-foreign Joint Venture in May 2017. The main purpose of the joint venture is to provide HERE’s clients with a global location service platform with content and service based solutions that includes China mapping data and real-time information.
China does face a dilemma – on the one hand it has a strong interest in tightly regulating surveying and mapping activities but on the other hand it has a strong ambition to become a world leader in autonomous cars.
We expect that autonomous cars is so important that China will indeed make necessary change as to how it regulates surveying and mapping laws or at least their practical implementation in regards to HD maps.
One example of China’s efforts in this regard is the 2017 revision to the Surveying and Mapping Law which required a unified national system of continuously operating reference stations (CORS). The CORS system is able to provide accurate positioning to the centimeter or even millimeter level. In May 2017, the national CORS system was put into operation – this is a fundamental step in providing the accurate positioning data needed for HD Maps in China.
In addition, the 2016 NASG Notice also notes that the authority is speeding up the study and formation of policies on autonomous driving maps. In a news conference held by NASG in 2017 it was announced that the authority will strongly support the development of autonomous driving in China and has been actively conducting research on relevant policies and map processing technology.
However, we are less optimistic about the restrictions on foreign investment being relaxed anytime soon. We would anticipate that these will remain in place so that foreign companies interested in the China market or needing to serve the China market as part of a global strategy will need to find an accommodation within the current framework – either a joint venture or cooperation.
 Darrell M. West – Moving forward: Self-driving vehicles in China, Europe, Japan, Korea, and the United States
 How autonomous vehicles could relieve or worsen traffic congestion？
 Darrell M. West – Moving forward: Self-driving vehicles in China, Europe, Japan, Korea, and the United States
 Revised and adopted at the 27th Session of the Standing Committee of the Twelfth National People’s Congress of China effective on 1 July 2017.
 Articles 4, 5 of the Regulations on Qualification of Surveying and Mapping, and the Classification Standards on Surveying and Mapping Qualification, issued by the NASG and on 1 July 2014.
 The full name is the Notice on Strengthening the Administration of the Making, Testing and Application regarding Maps for Autonomous Driving issued by NASG in February 2016.
 Article 3 of the Supplemental Rules on Public Map Content Presentation(trial) issued by NASG in January 2009
 Article 7 of the Supplemental Rules on Public Map Content Presentation(trial) issued by NASG in January 2009
 Rules on Public Presentation Content of Basic Geographic Information(trial) issued by NASG in September 2010
 Article 10 of the Notice on Rules on Administration of Electronic navigation map issued by NASG in November 2007
 Article 3 of the Basic Security Processes for Electronic Navigation Maps (GB 20263―2006)
 Article 1 of the Notice on further Strengthening the Administration of Confidentiality of Data of Electronic navigation maps issued by NASG in April 2012
 Articles 10 and 48 of the PRC State Secrets Law promulgated by the Standing Committee of the National People’s Congress effective on 1 October 2010.
 The Reply to Issues regarding Electronic Navigation Maps issued by the NASG in May 2008
 The 2017 Foreign Investment Catalog jointly issued by the National Development and Reform Commission and the Ministry of Commerce effective on 28 July 2017
 Article 8 of PRC Surveying and Mapping Law
 Article 8 of the Temporary Measures on Administration of Mapping and Surveying in China by Foreign Organizations and Individuals issued by the Ministry of Land and Resources on 27 April 2011
 The 2017 Foreign Investment Catalog and Article 7 of the Temporary Measures on Administration of Mapping and Surveying in China by Foreign Organizations and Individuals issued by the Ministry of Land and Resources on 27 April 2011
 Article 2 of the 2016 NASG Notice
By Mark Schaub, Atticus Zhao and Xia Shengying