Tough security tests for banks' foreign suppliers

Draft Chinese government regulations would force overseas technology vendors to meet stringent security tests before they can sell to China's banks, an acceleration of efforts to curb the country's reliance on foreign technology that has drawn a sharp response from US business groups.

But a translation of the proposed rules shows its immediate impact on foreign firms may not be as tough as feared.

The draft shows the regulation would initially focus on types of hardware and software where domestic suppliers already have a strong market position compared with their foreign rivals.

Western companies say the rules have not yet been formally adopted and some said they believed Beijing would retreat on some of the most onerous ideas, including demanding that firms' proprietary source code be reviewable.

Chinese leaders are to review the plan next week, US tech industry sources said.

Eighteen American business groups on Wednesday urged Beijing to postpone rolling out the regulation, which they argued were motivated by protectionism as well as security concerns that intensified in the wake of disclosures of US spying techniques by former National Security Agency contractor Edward Snowden.