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Keep Your Technology Company Out of China

Keep your technology company out of China. According to several reports, tech companies may be subjected to reveal company secrets under a Chinese security law. In May 2015, a draft of China’s new national security law was made public; however, it was very ambiguous.

By Milton Bertrand

Keep your technology company out of China. According to several reports, technology companies may be forced to reveal company secrets under a Chinese security law. In May 2015, a draft of China’s new national security law was made public; however, it was very ambiguous.

The Chinese government has released a final version of the law on Wednesday, 07/02/2015. Beijing got more specific, but in a way that is sending ripples through the global technology industry.

New language in the rules calls for a “national security review” of the technology industry that includes networking, other products and services; in addition that includes foreign investment. The law also calls for technology that supports crucial sectors to be “secure and controllable,” a catchphrase that multinationals and industry groups argue that could be used to force companies to build so-called back doors; in so doing, that will allow third-party access to systems, provide encryption keys or even hand over source code. That sounds like China to many tech industry leaders.

As the law is so ambiguous, it suggests a new front in the wider clash between China and the United States over online security and technology policy.

The most recent policy clash between the United States and China was in April, and it ended with Beijing’s saying that it would withdraw a law that restricted which technology products could be sold by foreign companies to Chinese banks. Groups that represent companies like Apple, Google and Microsoft had pushed against that law.

“I think it’s a perfect storm: The cyber security concerns because of Snowden and the techno-nationalist perspective have really gained strength over the past few years,” said Adam Segal, a senior fellow at the Council on Foreign Relations in New York. “China is not particularly swayed by or sympathetic to arguments that the foreign companies have made, and they’re going to push forward on all these fronts.”

At a news conference on Wednesday, 07/02/2015 in Beijing, Zheng Shuna, deputy director of the legislative affairs commission of the National People’s Congress, China’s legislature, underscored those concerns.

 “China’s cybersovereignty shall be respected and maintained,” she said, using the term Beijing has adopted to argue that countries should be allowed to enact whatever laws are necessary to manage the Internet and information technology within their borders.

“Raising the idea of ‘safeguarding national cybersovereignty’ in the National Security Law is a response to the needs of the development of the Chinese Internet,” Ms. Zheng added. “It provides the legal basis for managing cyberactivity on China’s soil and resisting activities which jeopardize China’s cybersecurity.”

Mr. Segal pointed to one phrase in the new Chinese law that could be particularly problematic: “secure and controllable.”

“Since no one knows how you implement that phrase,” he said, “foreign companies are worried about what that’s going to mean. Does it mean they have to give access through back doors, or are they going to have to partner with Chinese firms?”

Mr. Segal added that one recourse would be to argue through the World Trade Organization that what China considers national security concerns are not valid.

 

Article source:

Jitters in Tech World Over New Chinese Security Law­—New York Times.

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