Tech industry upset with wording of China law

China’s new national security law is causing consternation throughout the global technology industry.

“New language in the rules calls for a ‘national security review’ of the technology industry — including network and other products and services — and foreign investment. The law also calls for technology that supports key sectors to be ‘secure and controllable,’ a catchphrase that multinationals and industry groups say could be used to force companies to build so-called back doors — which allow third-party access to systems — provide encryption keys or even hand over source code,” wrote The New York Times.

“As with many Chinese laws, the language is vague enough to make it unclear how the law will be enforced, but it suggests a new front in the wider clash between China and the United States over online security and technology policy,” said the Times.

The technology industry is already upset at Chinese efforts to get them to transfer technology to Chinese firms. Many have come flat out and accused the government and Chinese firms of stealing intellectual property. Last month, some US officials implied that China was behind a recent hacking incident that stole data on government employees from a US agency.

China has a different take on the cybersecurity issue. After Edward Snowden’s release of documents on US espionage, China countered that it has much to fear from foreign technology that could have been tampered with by the US government.

Asia Unhedged worries that allegations of Chinese hacking and criticism of the new national security law may derail pending agreements with China that offer US tech firms much bigger opportunities in the world’s second largest economy.

“The popular US posture when determining how to approach trade and investment issues with China is to focus on grievances,” wrote Manisha Singh, an international lawyer and former Deputy Assistant Secretary at the US Department of State, in Forbes. “Because of this, we often overlook avenues that could provide our companies and workers with greater access to one of the world’s largest consumer markets. The pending Bilateral Investment Treaty would give American companies the ability to operate more effectively and be treated fairly in the Chinese market.”

Grievances about China’s new national security law and alleged hacking are one thing and should be addressed. But Asia Unhedged wonders if all this is worth scuttling the BIT currently being negotiated by China and the US.

Categories: Asia Unhedged, China

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  • Infidel007

    You people who decided to outsource American jobs and use cheap labor, and hurt the country as a result, are now going to pay a price. You thought you had it made, why pay Americans a livable wage, you could still make a nice profit, but you multi national corps with no allegiance to the nation didn’t care about the American working man or women you took a dump on. It’s a smart strategy get you to open up shop, steal your technology and other trade secrets then duplicate the same thing, and undercut you.

    If the Chinese state also decides to consider it a national security matter, they could back the Chinese company’s play and through attrition bankrupt their competition using the assets of the state to back the Chinese company. Many Chinese companies are state owned as well, so obviously they are backed by the Chinese state. You greedy short sighted fools so blinded by quarterly statements only focused on the trees and not the forest.

    I hope China puts you all out of business and steals all of your technology. It would be poetic justice. I’ll take nationalist over globalism any day. For all of their faults at least the Chinese government is nationalistic in nature. I don’t like their government, but I at least respect that they aren’t selling their own people out for 10 pieces of silver. It used to be 30, but due to supply and demand it has been reduced to 10 pieces of silver.

  • Daniel Berg

    Corporate media is part of these greedy people, belongs to them, share their stories and defends these stories,,I think A Times is not an exception ,

  • China Lee

    China’s national security law is identical to the US national security law.

    The US blocked Huawei from selling any equipment in the United States due to the “potential” for spying. Huawei offered to have the US government review Huawei’s source code. The US still said “no.”

    What can’t China have the exact same standard as the United States? If the United States can block any electronic equipment on the potential for spying, why can’t China do the same?

  • Abir Hasan

    But website say different things.

  • Infidel007

    Everyone has an agenda, you can’t solely trust one source. Getting your information from multiple sources, is important. The most important thing is to learn to think for yourself and trust nothing you see and hear at face value. The old saying trust but verify comes to mind.

    Often times third parties feed the media information, thats’s not even 100% factual, for specific purposes for instance. Question everything including yourself. Questioning yourself is important for the simple fact that you may find a flaw in your thinking, or something else and find ways to improve upon it. I’ve often thought I knew something or I was correct in my thought process only to find out from deep introspection that I was wrong.

    Though doing this will improve anyone’s ability to view things as unbiasedly as possible. All free thinking individuals who value original thinking should do this often. I’ll also add we all share certain biases, this can’t be helped, the experiences in our own lives create them. This is why getting your information from multiple sources is also important. Often times someones bias will come out in their writing, and many people especially the writers are unaware of this fact. I myself also fall victim to this from time to time. Though I’m at least aware that this problem exists. Knowing is half the battle as G.I Joe said.

    Also if you want to manipulate a society or people, manipulating the media is very important. You can play upon peoples emotions or ideologies to make them move in a specific direction. Ideologues and those in power have done this for ages. Moving people at the macro level is a lot easier than the micro level in my opinion. I’ve never tried it, I’ve simply observed it. People act differently in groups. The whole mob mentality is a major flaw within human nature in my opinion. Though knowing this weakness inherent in human nature a smart devious party could easily exploit it as well, and trust me they do all of the time.

  • KSC

    I think that China has every right to do this. National Security trumps Globalism unlike the TPP which works to undermine Nationalism through Multinational interests. If US considers Hwawei equipment too dangerous to be sold to US Governments, good on them but you can’t have your cake and eat it.

  • Zhuubaajie

    If the BIT is not moving forward, China needs to revisit fair trade.

    American trade with China is hugely profitable IN FAVOR of America. What will kill the profitability is if xenophobic protectionism takes hold.

    What is good must be universal. FAIR TRADE has to mean equal profits.

    American companies were basically given free rein to expand into China. Big Auto sell more cars in China than anywhere else. Walmart has 350 stores. Yum Brands has the largest restaurant chains and declares China the biggest retail opportunity on Earth. Hospital diagnostics is dominated by GE, aircrafts by Boeing, software by Microsoft. The list just goes on and on, and American companies DOMINATE in many Chinese industries.

    By 2010, American companies (more than 60,000 projects) made more than 100 Billion U.S. Dollars in profits in and from China. If you gross that up using just 15 P/E, that accounts for US$1.5 Trillion in stock market wealth. In contrast, WHAT Chinese companies are allowed to have hundreds of outlets in America? As a direct result, the profit imbalance is at least 5 or 6 to 1 IN FAVOR OF AMERICA (exports to America typically gives the Chinese exporters no more than 3-5% margins).

    The latest survey of 240 of the top American companies in China (survey released in October2013):

    * More companies were profitable in 2011 — 89 percent, in fact, the highest rate to date in the seven year history of the survey.
    * Two thirds of those surveyed saw 2011 revenue from China grow by double digits, including 30 percent of respondents with revenue growth of 20 percent or more.
    * Nearly 75 percent believe 2012 revenue will be even better, despite the economic slowdown.
    * Sixty-six percent will increase investment in China in next 12 months.

    If the relationship continues to deteriorate, Beijing would (and should) block or delay, dollar for dollar, investments by American companies until Washington changes its xenophobic ways. China is at least a few hundred billion dollars in the red on that ledger, and that just got much higher this week with President O’s blocking of the wind project in Oregon. That will be matched dollar for dollar one of these days. Not all American projects are high tech. There is really no reason that American companies dominate in so many industries in China – such as groceries and entertainment, given the unfair competition by Washington to unfairly block Chinese investments in America.

    Poignant is that Beijing recently allowed Walmart to buy into Chinese e-commerce big time. Walmart has no technology to contribute in that area. Yet when the shoe is on the other foot, Huawei and ZTE cannot even sell phone systems in the U.S. The asymmetry is extremely unreasonable, and unfortunate, because tit for tat will be next. Nike makes over 50% profit from selling shoes in China. WHY in the world would or should China allow that if America is going to discriminate on the basis of race (Chinese)?

  • Zhuubaajie

    There is absolutely no reason that Apple should be allowed to be No. 1 in the China phone market, given the discrimination against Chinese tech in the American market.

  • Abir Hasan

    you can find it from this.

  • Abir Hasan
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